Question stringlengths 14 166 | Answer stringlengths 3 17k |
|---|---|
How credible is Stansberry's video “End of America”? | If we postulate that there is at least some element of truth to the phrase 'A leopard does not change his spots' and then consider this tidbit He conveniently forgets to mention his 1.5 million dollar fraud fine from the SEC over investment “advice” he sold through a news letter. The SEC claimed and the judge agreed that the report was “replete with lies”. I think that gives you just about all you might need to know regarding the man behind the video, and the nature of it's content. Oh, and it's purpose? To SELL YOU the same said newsletter. I guess it's natural for Stansberry to feel as he does. After all if the US gov had just busted me for conning and lying to folks, and fined ME 1.5Mill, I'd be having some pretty intense lurid fantasies about it going down in flames, and trying to hide any money I had left offshore also. A huge amount of his argument hinges on the US no longer being the world's reserve currency. Firstly, while I'll admit I'm none too happy with the way the national debt has been managed for oh, around 30 years how, (which includes I will note going from a pretty much balanced budget, to around an 80% increase in the debt from 2001 through 2008, when 'times were good' and there was little need to spend money we didn't have), when compared to a lot of other countries, we still don't look that bad. You have to ask yourself this first, if not the US, then WHO? are the governments of the world going to trust China? could the Yen handle the load? Is the Euro any better off especially considering problems in Greece, Ireland, etc. Do countries like Switzerland have enough liquidity and available ways to invest there? In order for the US to STOP being the world's reserve currency, you must have something to replace it with, and really, can we realistically think of one country/currency with the capability to become a new 'world reserve currency'??? Secondly, even then should such a shift actually happen, it doesn't mean people will ALL just magically stop buying US debt. Yes the demand would go down, but it would not go to zero. There are after all a worldfull of other countries who's money is right now NOT the world reserve currency, and yet they are able to sell bonds and people and even other countries invest there. (China for example does not invest exclusively in the US), so yeah we might have to start paying more interest to get people to buy US debt, but it's not like the demand will go away. Save your money, save your time, don't buy into this dung. |
Is there a good rule of thumb for how much I should have set aside as emergency cash? | I think this varies considerably depending on your situation. I've heard people say 6 month's living expenses, and I know Suze Orman recommended bumping that to 8 months in our current economy. My husband and I have no children, lots of student loan debts, but we pay off our credit cards in full each month and are working to save up for a house. We've talked through a few different what-if scenarios. If one of us were to lose our job, we have savings to cover the difference between our reduced income and paying the bills for 6 or 8 months while the other person regained employment. If both of us were to lose our jobs simultaneously, our savings wouldn't hold us over for more than 3 or 4 months, but if that were to happen, we would likely take advantage of the opportunity to relocate closer to our families, and possibly even move in to my parent's house for a short time. With no children and no mortgage, our commitments are few, so I don't feel the need to have a very large emergency cash fund, especially with student loans to pay off. Think through a few scenarios for your life and see what you would need. Take into consideration expenses to break a rental lease, cell phone contract, or other commitments. Then, start saving toward your goal. Also see answers to a similar question here. |
Account that is debited and account that is credited | Strictly speaking the terms arise from double entry book keeping terminology, and don't exactly relate to their common English usage, which is part of the confusion. All double entry book keeping operations consist of a (debit, credit) tuple performed on two different books (ledgers). The actual arithmetic operation performed by a debit or a credit depends on the book keeping classification of the ledger it is performed on. Liability accounts behave the way you would expect - a debit is subtraction, and a credit is addition. Asset accounts are the other way around, a debit is an addition, and a credit is a subtraction. The confusion when dealing with banks, partly comes from this classification, since while your deposit account is your asset, it is the bank's liability. So when you deposit 100 cash at the bank, it will perform the operation (debit cash account (an asset), credit deposit account). Each ledger account will have 100 added to it. Similarly when you withdraw cash, the operation is (credit cash, debit deposit). However the operation that your accountant will perform on your own books, is the opposite, since the cash was your asset, and now the deposit account is. For those studying math, it may also help to know that double entry book keeping is one of the earliest known examples of a single error detection/correction algorithm. |
Investment options | Option 1 is out. There are no "safe returns" that make much money. Besides, if a correction does come along how will you know when to invest? There is no signal that says when the bottom is reached, and you emotions could keep you from acting. Option 2 (dollar cost averaging) is prudent and comforting. There are always some bargains about. You could start with an energy ETF or a few "big oil" company stocks right now. |
A deferred capital gains tax similar to the real estate 1031 Exchange but for securities reinvestment? | Sale of a stock creates a capital gain. It can be offset with losses, up to $3000 more than the gains. It can be deferred when held within a retirement account. When you gift appreciated stock, the basis follows. So when I gifted my daughter's trust shares, there was still tax due upon sale. The kiddy tax helped reduce but not eliminate it. And there was no quotes around ownership. The money is gone, her account is for college. No 1031 exchange exists for stock. |
Does a company's stock price give any indication to or affect their revenue? | It would be very unusual (and very erroneous) to have a company's stock be included in the Long Term Investments on the balance sheet. It would cause divergent feedback loops which would create unrepresentative financial documents and stock prices. That's how your question would be interpreted if true. This is not the case. Stock prices are never mentioned on the financial documents. The stock price you hear being reported is information provided by parties who are not reporting as part of the company. The financial documents are provided by the company. They will be audited internally and externally to make sure that they can be presented to the market. Stock prices are quoted and arbitrated by brokers at the stock exchange or equivalent service. They are negotiated and the latest sale tells you what it has sold for. What price this has been reported never works its way onto the financial document. So what use are stock prices are for those within the company? The stock price is very useful for guessing how much money they can raise by issuing stock or buying back stock. Raising money is important for expansion of the company or to procure money for when avenues of debt are not optimal; buying back stock is important if major shareholders want more control of the company. |
How is not paying off mortgage better in normal circumstances? | There are several reasons: |
Is the need to issue bonds a telltale sign that the company would have a hard time paying coupons? | Apple is currently the most valuable company in the world by market capitalisation and it has issued bonds for instance. Amazon have also issued bonds in the past as have Google. One of many reasons companies may issue bonds is to reduce their tax bill. If a company is a multinational it may have foreign earnings that would incur a tax bill if they were transferred to the holding company's jurisdiction. The company can however issue bonds backed by the foreign cash pile. It can then use the bond cash to pay dividends to shareholders. Ratings Agencies such as Moody's, Fitch and Standard & Poor's exist to rate companies ability to make repayments on debt they issue. Investors can read their reports to help make a determination as to whether to invest in bond issues. Of course investors also need to determine whether they believe the Ratings Agencies assesments. |
Do I have to pay a capital gains tax if I rebuy different stocks? | Yes (most likely). If you are exchanging investments for cash, you will have to pay tax on that - disregarding capital losses, capital loss carryovers, AGI thresholds, and other special rules (which there is no indication of in your question). You will have to calculate the gain on Schedule D, and report that as income on your 1040. This is the case whether you buy different or same stocks. |
Investing for Dummys | Books are a great place to start, Jason Kelly's The Neatest Little Guide to Stock Market Investing will give you a broad foundation of the stock & bond market. |
Recommended education path for a future individual investor? | My plan is that one day I can become free of the modern day monetary burdens that most adults carry with them and I can enjoy a short life without these troubles on my mind. If your objective is to achieve financial independence, and to be able to retire early from the workforce, that's a path that has been explored before. So there's plenty of sources that you might want to check. The good news is that you don't need to be an expert on security analysis or go through dozens of text books to invest wisely and enjoy the market returns. This is the Bogleheads philosophy. It's widely accepted by people in academia, and thoroughly tested. Look into it further if you want to see the rationale behind, but, to sum it up: It doesn't matter how expert you are. The idea of beating the market, that an index fund tracks, is about 'outsmarting' the rest of investors. That would be difficult, even if it was a matter of skill, but when it comes to predicting random events we're all equally clueless. *Total Expense Ratio: It gives an idea of how expensive is a given fund in terms of fees. Actively managed funds have higher TER than indexed ones. This doesn't mean there aren't index funds with, unexplainable, high TER out there. |
How do currency markets work? What factors are behind why currencies go up or down? | The fiat currency is the basis for currency markets - that is, currency that is not made of precious metals. The factors that influence what the value of a fiat currency are the state of the country's economy, what the gov't says the value should be, their fiscal policies, as well as what the currency is trading at. And what the currency is trading at is a product of these factors as well as the typical factors which would affect any stock trading. eHow has a great outline, here, which describes them. |
Would it be considered appropriate to use a market order for my very first stock trade? | A few of the answers are spot on but here's another thing to consider: the type of trade. For example, I sometimes day trade stocks with momentum where the stock price is spiking relatively fast. A limit order in this situation may never get filled and you will miss out on the trade. A market order will get you filled but you mostly likely pay more than your limit order. However you are now catching the wave up. Overall, using a limit or market is relative to your trading style and the type of trade. I always prefer to use a limit buy order. |
Which practice to keep finances after getting married: joint, or separate? | I feel there are two types of answer: One: the financial. Suck all the emotion out of the situation, and treat the two individuals as individuals. If that works for the two of you, fantastic. Two: the philosophical. You're married, it's a union, so unify the funds. If that works for you, fantastic. Personally, my partner and I do the latter. The idea of separate pots and separate accounts and one mixed fund etc makes no sense to us. But that's us. The first step for you in deciding on an approach is to know yourselves as people - and everything else will follow. |
I have savings and excess income. Is it time for me to find a financial advisor? | Is my financial status OK? You have money for emergencies in the bank, you spend less than you earn. Yes, your status is okay. You will have a good standard of living if nothing changes from your status quo. How can I improve it? You are probably paying more in taxes than you would if you made a few changes. If you max out tax advantaged retirement accounts that would reduce the up-front taxes you are paying on your savings. Is now a right time for me to see a financial advisor? The best time to see a financial advisor is any time that your situation changes. New job? Getting married? Having a child? Got a big promotion or raise? Suddenly thinking about buying a house? Is it worth the money? How would she/he help me? If you pick an advisor who has incentive to help you rather than just pad his/her own pockets with commissions, then the advice is usually worth the money. If there is someone whose time is already paid for, that may be better. For example, if you get an accountant to help you with your taxes and ask him/her how to best reduce your taxes the next year, the advice is already paid-for in the fee you for the tax help. An advisor should help you minimize the high taxes you are almost certainly paying as a single earner, and minimize the stealth taxes you are paying in inflation (on that $100k sitting in the bank). |
What traditionally happens to bonds when the stock market crashes? | It depends. Very generally when yields go up stocks go down and when yields go down stocks go up (as has been happening lately). If we look at the yield of the 10 year bond it reflects future expectations for interest rates. If the rate today is very low but expectations are that the short term rates will go up that would be reflected in a higher yield simply because no one would buy the longer term bond if they could simply wait out and get a better return on shoter term investments. If expectations are that the rate is going down you get what's called an inverted yield curve. The inverted yield curve is usually a sign of economic trouble ahead. Yields are also influenced by inflation expectations as @rhaskett is alluding in his answer. So. If the stock market crashes because the economy is doing poorly and if interest rates are relatively high then people would expect the rates to go down and therefore bonds will go up! However, if there's rampant inflation and the rates are going up we can expect stocks and bonds to move in opposite directions. Another interpretation of that is that one would expect stock prices to track inflation pretty well because company revenue is going to go up with inflation. If we're just talking about a bump in the road correction in a healthy economy I wouldn't expect that to have much of an immediate effect though bonds might go down a little bit in the short term but possibly even more in the long term as interest rates eventually head higher. Another scenario is a very low interest rate environment (as today) with a stock market crash and not a lot of room for yields to go further down. Both stocks and bonds are influenced by current interest rates, interest rate expectations, current inflation, inflation expectations and stock price expectation. Add noise and stir. |
Can I open a Solo 401(k) if I am an independent contractor but also work part-time as an employee? | If you have self-employment income you can open a Solo 401k. Your question is unclear as to what your employment status is. If you are self-employed as an independent contractor, you can open a Solo 401k. You can still do this even if you also earn non-self-employment income (i.e., you are an employee and receive a W-2). However, the limits for contributions to a Solo 401k are based on your self-mployment income, not your total income, so if you have only a small amount of self-employment income, you won't be able to contribute much to the Solo 401k. You may be able to reduce your taxes somewhat, but it's not like you can earn $1000 of self-employment income, open a Solo 401k, and dump $5000 into it; the limits don't work that way. |
Ethics and investment | There are the Dow Jones Sustainability Indices. I believe the reports used to create them are released to the public. This could be a good place to start. |
Can I rollover an “individual retirement annuity” to an IRA? | You are not allowed to take a retirement account and move it into the beneficiary's name, an inherited IRA is titled as "Deceased Name for the benefit of Beneficiary name". Breaking the correct titling makes the entire account non-retirement and tax is due on the funds that were not yet taxed. If I am mistaken and titling remained correct, RMDs are not avoidable, they are taken based on your Wife's life expectancy from a table in Pub 590, and the divisor is reduced by one each year. Page 86 is "table 1" and provides the divisor to use. For example, at age 50, your wife's divisor is 34.2 (or 2.924%). Each year it decrements by 1, you do not go back to the table each year. It sounds like the seller's recommendation bordered on misconduct, and the firm behind him can be made to release you from this and refund the likely high fees he took from you. Without more details, it's tough to say. I wish you well. The only beneficiary that just takes possession into his/her own account is the surviving spouse. Others have to do what I first described. |
Does gold's value decrease over time due to the fact that it is being continuously mined? | The relative value of Gold (or any other commodity) as measured against any given currency (such as the USD), is not a constant function either. If you have inflationary pressure, the "value" of an ounce of gold (or barrel of oil, etc) may "double", but it's really because the underlying comparator has lost "half" its value. |
Why invest for the long-term rather than buy and sell for quick, big gains? | If they return to their earlier prices Assuming I don't make too many poor choices That's your problem right there: you have no guarantee that stocks, will in fact return to their earlier prices rather than go down some more after the time you buy them. Your strategy only looks good and easy in hindsight when you know the exact point in time when stocks stopped going down and started going up. But to implement it, you need to predict that time, and that's impossible. I would adopt a guideline of "sell when you've made X%, even if it looks like it might go higher." Congratulations, you've come up with the concept of technical analysis. Now go and read the hundreds of books that have been written about it, then think about why the people who wrote them waste time doing so rather than getting rich by using that knowledge. |
Looking to buy a property that's 12-14x my income. How can it be done? | It is your choice to have "insignificant income", and that has consequences. One is that you cannot borrow money to purchase a home independent of your credit score. In order to purchase a home you must also have the ability to repay in addition to a good history. IMHO your question suggest that you have a unrealistic outlook on life. If you cannot come up with 10K, how can you afford a home? What happens when the HVAC system goes out? While I certainly hope you meet and exceed your goals, you can change your whole world by simply getting a job at a fast food restaurant. When you are not working you can then do the entrepreneurship thing. Life is often a choice of priorities. If you choose to "back-burner" the entrepreneur dream, for a time, and choose to focus on earning the best possible wage. Then perhaps you could afford to purchase a place of your own. |
What is the theory behind Rick Van Ness's risk calculation in the video about diversification? | He's calculating portfolio variance. The general formula for the variance of a portfolio composed of two securities looks like this: where w_a and w_b are the weights of each stock in the portfolio and the sigmas represent the standard deviation/risk of each asset or portfolio. In the case of perfect positive or negative correlation, applying some algebra to the formula relating covariance to the correlation coefficient (rho, the Greek letter that looks like "p"): tells us that the covariance we need in the original formula is simply the product of the standard deviations and the correlation coefficient (-1 in this case). Combining that result with our original formula yields this calculation: Technically we've calculated the portfolio's variance and not it's standard deviation/risk, but since the square root of 0 is still 0, that doesn't matter. The Wikipedia article on Modern Portfolio Theory has a section that describes the mathematical methods I used above. The entire article is worth a read, however. |
Formula that predicts whether one is better off investing or paying down debt | Old question I know, but I have some thoughts to share. Your title and question say two different things. "Better off" should mean maximizing your ex-ante utility. Most of your question seems to describe maximizing your expected return, as do the simulation exercises here. Those are two different things because risk is implicitly ignored by what you call "the pure mathematical answer." The expected return on your investments needs to exceed the cost of your debt because interest you pay is risk-free while your investments are risky. To solve this problem, consider the portfolio problem where paying down debt is the risk-free asset and consider the set of optimal solutions. You will get a capital allocation line between the solution where you put everything into paying down debt and the optimal/tangent portfolio from the set of risky assets. In order to determine where on that line someone is, you must know their utility function and risk parameters. You also must know the parameters of the investable universe, which we don't. |
Who is the issuer in a derivative contract? | While the issuer of the security such as a stock or bond not the short is responsible for the credit risk, the issuer and the short of a derivative is one. In all cases, it is more than likely that a trader is owed securities by an agent such as a broker or exchange or clearinghouse. Legally, only the Options Clearing Corporation clears openly traded options. With stocks and bonds, brokerages can clear with each other if approved. While a trader is expected to fund margin, the legal responsibility is shared by all in the agent chain. Clearinghouses are liable to exchanges. Exchanges are liable to members. Traders are liable to brokerages. Both ways and so on. Clearinghouses are usually ultimately liable for counterparty risk to the long counterparty, and the short counterparty is ultimately liable to the clearinghouse. Clearinghouses are not responsible for the credit risk of stocks and bonds because the issuers are not short those securities on the exchange, thus no margin is required. Credit risk for stocks and bonds is mitigated away from the clearing process. |
Advantage of credit union or local community bank over larger nationwide banks such as BOA, Chase, etc.? | Don't switch just because you hear people panicking on the talk shows. Banks are competitive business and won't start charging for using debit cards too fast. If and when they decide to do such a thing after all - then start shopping and see who doesn't catch up with the fees and still provides the services you want for the price you're willing to pay. |
Credit and Debit | It took me a while to understand the concept, so I'll break it down as best as I can. There are three parts to the accounting equation: Assets = Liabilities + Owner's Equity We'll look at this in two ways 1. As a business owner you invest (say) 10,000 USD into your bank. The entry would be: Debit: Assets: Cash for 10,000 Credit: Owner's Equity: Contributions for 10,000 In this case, you have assets of 10,000 from your deposit, but it is due to owner contributions and not business transactions. Another example (say a sale): Debit: Assets: Cash for 10,000 Credit: Owner's Equity: Sales for 10,000 Debit: Assets: Cash for 10,000 Credit: Liabilities: Deposits for 10,000 Deposits are a banking term to reflect a bank's obligation to return the amount on demand (though the bank has free reign with it, see fractional banking) You will NEVER debit or credit your bank as it is assumed you will be storing your money there, note bank reconciliation. Hope this helps, comment with any more questions. |
How do you translate a per year salary into a part-time per hour job? | All things being equal, a $55,000/year job with 25% benefit load is about $68,750/year. That's a little more than $34/hr. Your rate really depends on the nature of the work. If it's strictly a part-time job where you are an employee, you're probably looking at a $28-38/hr range. If you're an independent contractor, the rate should be higher, as you're paying the taxes, doing other administrative stuff. How much higher depends on the industry... software/it rates are usually 1.5-2x, construction is driven by the union scale in many places, etc. Note that you need to meet criteria defined by the IRS to successfully maintain independent contractor status from a tax POV. |
Books, Videos, Tutorials to learn about different investment options in the financial domain | Investopedia does have tutorials about investments in different asset classes. Have you read them ? If you had heard of CFA, you can read their material if you can get hold of it or register for CFA. Their material is quite extensive and primarily designed for newbies. This is one helluva book and advice coming from persons who have showed and proved their tricks. And the good part is loads of advice in one single volume. And what they would suggest is probably opposite of what you would be doing in a hedge fund. And you can always trust google to fish out resources at the click of a button. |
Single employee - paying for health insurance premiums with pre-tax money | Pre tax insurance is not possible unless the emplyer provides hsa and do a payroll deduction. Obamacare is all post tax and you can do deduction if your expenses exceeds 10%of your income |
How do I enter Canadian tax info from US form 1042-S and record captial gains from cashing in stock options? | Depending on what software you use. It has to be reported as a foreign income and you can claim foreign tax paid as a foreign tax credit. |
What is market capitalization? [duplicate] | Market capitalization is one way to represent the value of the company. So if a company has 10 million shares, which are each worth $100, then the company's market capitalization is 1 billion. Large cap companies tend to be larger and more stable. Small cap companies are smaller, which indicates higher volatility. So if you want more aggressive investments then you may want to invest in small cap companies while if you lean on the side of caution then big cap companies may be your friend. |
Trade? Buy and hold? Or both? | You mentioned three concepts: (1) trading (2) diversification (3) buy and hold. Trading with any frequency is for people who want to manage their investments as a hobby or profession. You do not seem to be in that category. Diversification is a critical element of any investment strategy. No matter what you do, you should be diversified. All the way would be best (this means owning at least some of every asset out there). The usual way to do this is to own a mutual or index fund. Or several. These funds own hundreds or thousands of stocks, so that buying the fund instantly diversifies you. Buy and hold is the only reasonable approach to a portfolio for someone who is not interested in spending a lot of time managing it. There's no reason to think a buy-and-hold portfolio will underperform a typical traded portfolio, nor that the gains will come later. It's the assets in the portfolio that determine how aggressive/risky it is, not the frequency with which it is traded. This isn't really a site for specific recommendations, but I'll provide a quick idea: Buy a couple of index funds that cover the whole universe of investments. Index funds have low expenses and are the cheapest/easiest way to diversify. Buy a "total stock market" fund and a "total bond fund" in a ratio that you like. If you want, also buy an "international fund." If you want specific tickers and ratios, another forum would be better(or just ask your broker or 401(k) provider). The bogleheads forum is one that I respect where people are very happy to give and debate specific recommendations. At the end of the day, responsibly managing your investment portfolio is not rocket science and shouldn't occupy a lot of time or worry. Just choose a few funds with low expenses that cover all the assets you are really interested in, put your money in them in a reasonable-ish ratio (no one knows that the best ratio is) and then forget about it. |
In which situations is it better to consider a loan instead of paying cash? | A loan with modest interest is better than paying by cash if there are better alternatives for investment. For example, suppose you are buying a house. Consider two extremes: a) you pay the house entirely by cash, b) the entire buy is financed by the bank. Historically, real (subtracting inflation) house prices (at least in the U.S.) have not risen at all in the long run, and investing all of your own capital in this way may not be optimal. Notice that we are looking at a situation where one is buying a house and living in it in any case. Rent savings are equal in cases a) and b). If instead you were buying a house not for yourself, but as a separate investment for renting out, then you would receive rent. In the case a), the real return on your capital will be zero, whereas in case b), you can invest the cash in e.g. the stock market and get, on average, 7% (the stock market has yielded a 7% real return annually including dividends) annually minus the bank's interest rate. If the interest is lower than 7%, it may be profitable to take the loan. Of course, the final decision depends on your risk preferences. |
Is there a candlestick pattern that guarantees any kind of future profit? | John Person has a pattern called the High Close Doji that is probably the most reliable signal in the world of candle patterns. I would check out Candle Stick and Pivot Point Trade Triggers. It all I use in trading stocks + forex. |
Multiple mortgage pre-approvals and effects on credit score | Johnny. I recently bought my first home as well, and I have worked in the credit business (not mortgage), so I think I can answer some of your questions. Disclaimer first that I'm in NY, and home buying does vary from state to state. In my experience, pre-qual is not too different from pre-approval. Neither represents any real committment on the part of the bank (i.e. they can still deny approval at any point), and both are based on pulling your credit bureau and calculating ratios based on your stated (probably not documented) financial information. It's theoretically possible that a seller would choose a pre-approved buyer over a pre-qualified buyer, all other things being equal, but all other things are seldom equal. Remember also that you don't need to ultimately get a mortgage from the same bank that you use for the pre-qual. The pre-qual just shows that you are probably credit-worthy and serves to give you some credibility with sellers. Once you have an accepted offer and need to find a real mortgage, you can shop around for the best rate and best loan structure. Banks don't need to have pulled your credit to quote rates, but they will need to have a general idea of your FICO range. Once you find the bank you like with the best rate and actually apply for the loan, they will pull a hard bureau, and if your scores are different from what you said before, the rate may change, but within the same range, you'll generally be ok. Also, banks do not necessarily pull all 3 bureaus; they may only pull 1, as it costs them for each pull. 2 potential downsides to this approach: Also, make sure you have a mortgage/funding clause in your contract, as banks are unpredictable, and make sure you have a great real estate lawyer, not a legal "factory" - the extra few hundred $ are worth it. Don't overthink this credit stuff too much. Find a good house for a good price, and get a no-nonsense mortgage that you fully understand - no exotic stuff. Good luck! |
Why is the stock market rising after Trump's attack on the TPP? | Everything is worth what its purchaser will pay for it - Publilius Syrus It could be that, despite predictions from experts to the contrary, investors believe that renegotiating trade deals will have a positive affect on the economy, despite the upheaval uncertainty, and risk that it brings. Keep in mind that, as Pete B points out, this is part of a bigger post-election trend many people refer to as the "trump rally," which is a factor of more than one policy. Whether or not these policies will actually result in an a more robust economy, investors seem to be betting that it will. |
Can one use dollar cost averaging to make money with something highly volatile? | if you know when and by how much something will fluctuate, you can always make money. Buy it when it's cheaper and sell it when it's more expensive. If you just know that it fluctuated a lot recently, then you don't know what it will do next. Most securities that go to zero or go much higher bounce all over the place for a while first. But you don't know when they'll move decisively lower or higher. So how could you figure out if you'll make money - you can't know. DCA will on average make you better off, unless the extra commissions are too high relative to your purchase sizes. But it will in retrospect make you worse off in many particular cases. This is true of many investment disciplines, such as rebalancing. They are all based on averages. If the volatility is random then on average you can buy more shares when the price is lower using DCA. But when the lowest price turns out to have been on a certain day, you'd have been better off with a single lump sum put in on that day. No way to know in advance. Degree of volatility shouldn't matter; any fluctuation is enough for DCA or rebalancing to get you ahead, though it's true they get you ahead farther if the fluctuations are larger, since there's then more difference between DCA and a lump purchase. I think the real reason to do DCA and rebalancing is risk control. They reduce the risk of putting a whole lump sum in on exactly the wrong day. And they can help keep a portfolio growing even if the market is stagnant. |
Can I transfer my investment property into a SMSF? | Regarding transferring a residential investment property into your SMSF, no you cannot do it. You cannot transfer residential property into your SMSF from a related party. You can only transfer Business Real Property (that is commercial or industrial property) into a SMSF from a related party. You can buy new residential property inside your SMSF, and you can also borrow within the fund (using a non-recourse loan) to help you buy it, or you could buy it as tenants-in-common with your SMSF (that is you own say 50% in your own name and 50% under the SMSF). Regarding self-managing the investment properties held in your SMSF, yes you can, but you should make sure all your paperwork is in order (all your t's crossed and your i's dotted). You can even charge your SMSF for managing the properties, but this should be at market rates (not more). |
Currency exchange problem | For the purposes of report generation, I would recommend that you present the data in the currency of the user's home country. You could present another indicator, if needed, to indicate that a specific transaction was denominated in a foreign currency, where the amount represents the value of the foreign-denominated transaction in the user's home country Currency. For example: Airfare from USA to London: $1,000.00 Taxi from airport to hotel: $100.00 (in £) In terms of your database design, I would recommend not storing the data in any one denomination or reference currency. This would require you to do many more conversions between currencies that is likely to be necessary, and will create additional complexity where in some cases, you will need to do multiple conversions per transaction in and out of your reference currency. I think it will be easier for you to store multiple currencies as themselves, and not in a separate reference currency. I would recommend storing several pieces of information separately for each transaction: This way, you can create a calculated Amount for each transaction that is not in the user's "home" currency, whereas you would need to calculate this for all transactions if you used a universal reference currency. You could also get data from an external source if the user has forgotten the conversion rate. Remember that there are always fees and variations in the exchange rate that a user will get for their home country's currency, even if they change money at the same place at two different times on the same day. As a result, I would recommend building in a simple form that allows a user to enter how much they exchanged and how much they got back to calculate the exchange rate. So for example, let's say I have $ 200.00 USD and I exchanged $ 100.00 USD for £ 60.00, and there was a £ 3.00 fee for the exchange. The exchange rate would be 0.6, and when the user enters a currency conversion, your site could create three separate transactions such as: USD Converted to £: $100.00 £ Received from Exchange: £ 60.00 Exchange Fee: £ 3.00 So if the user exchanged currency and then ran a balance report by Currency, you could either show them that they now have $ 100.00 USD and £ 57.00, or you could alternatively choose to show the £ 57.00 that they have as $95.00 USD instead. If you were showing them a transaction report, you could also show the fee denominated in dollars as well. I would recommend storing your balances and transactions in their own currencies, as you will run into some very interesting problems otherwise. For example, let's say you used a reference currency tied to the dollar. So one day I exchange $ 100.00 USD for £ 60.00. In this system I would still have 100 of my reference currency. However, if the next day, the exchange rate falls and $ 1.00 USD is only worth £ 0.55, and I change my £ 60.00 back into USD, I will get approxiamately $ 109.09 USD back for my £ 60.00. If I then go and buy something for $ 100.00 USD, the balance of the reference currency would be at 0, but I will still have $ 9.09 USD in my pocket as a result of the fluctuating currency values! That is why I'd recommend storing currencies as themselves, and only showing them in another currency for convenience using calculations done "on the fly" at report runtime. Best of luck with your site! |
How can I legally and efficiently help my girlfriend build equity by helping with a mortgage? | This is fine, just have a plan before you go into it. Look up a co-ownership agreement contract off LegalZoom, they are like $15, or get a lawyer if you want. Decide if you want to be "Joint tenants" or "Tenants in common". You probably want to be joint tenants so that if one of you dies the property goes to the other person. Go through the agreement, make any changes you want, and then both sign it. These documents outline what happens if someone dies, or if you break up, or if you are allowed to sell your ownership, and anything else. Keep a record of who has paid what % of equity towards the house. Also look into tax laws, if the mortgage or house is only truly in 1 person's name they may get a tax break that the other person will not get. The co-ownership agreement is essentially the same agreement that happens when you're married, the only difference is that it happens automatically and implicitly when you're married. It's interesting that some people are saying this is a horrible idea when it's practically the same as the agreement you'd have if you were married. Whether you're single or married, if you own a house with another person and you break up, it's going to be a bit complicated. Get a contract in place beforehand so that things go as smoothly as possible. If you are both rational adults you shouldn't have any problems. |
Should we park our money in our escrow account? | You should talk to a financial fiduciary (make sure they are a fiduciary, not all planners are) about investing your money. Even ultra safe investments such as treasury bonds will beat the 1% interest rate offered by your savings account (the yield on the 5 year treasury is currently around 2%). |
As a young adult, what can I be doing with my excess income? | You apparently assume that pouring money into a landlord's pocket is a bad thing. Not necessarily. Whether it makes sense to purchase your own home or to live in a rental property varies based on the market prices and rents of properties. In the long term, real estate prices closely follow inflation. However, in some areas it may be possible that real estate prices have increased by more than inflation in the past, say, 10 years. This may mean that some (stupid) people assume that real estate prices continue to appreciate at this rate in the future. The price of real estates when compared to rents may become unrealistically high so that the rental yield becomes low, and the only reasonable way of obtaining money from real estate investments is price appreciation continuing. No, it will not continue forever. Furthermore, an individual real estate is a very poorly diversified investment. And a very risky investment, too: a mold problem can destroy the entire value of your investment, if you invest in only one property. Real estates are commonly said to be less risky than stocks, but this applies only to large real estate portfolios when compared with large stock portfolios. It is easier to build a large stock portfolio with a small amount of money to invest when compared to building a large real estate portfolio. Thus, I would consider this: how much return are you going to get (by not needing to pay rent, but needing to pay some minor maintenance costs) when purchasing your own home? How much does the home cost? What is the annual return on the investment? Is it larger than smaller when compared to investing the same amount of money in the stock market? As I said, an individual house is a more risky investment than a well-diversified stock portfolio. Thus, if a well-diversified stock portfolio yields 8% annually, I would demand 10% return from an individual house before considering to move my money from stocks to a house. |
Are cashiers required to check a credit card for a signature in the U.S.? | Who cares? If your card gets stolen, most cards provide you with 100% liability protection. Just sign the thing! |
How much (paper) cash should I keep on hand for an emergency? | It's also worth thinking about minor "emergencies" when the location of your cash may be more important than the amount. I keep a baggie of change and small bills in my glovebox for meters and tolls. I keep a ten dollar bill in my armband when I go out for a jog or bike. Those little stashes have saved me more than once. Zombie apocalypse money? I just have a couple hundred at home. |
Why do investors buy stock that had appreciated? | People buy stocks with the intention of making money. They either expect the price to continue to rise or that they will get dividends and the price will not drop (enough) to wipe out their dividend earnings. |
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. |
Need a formula to determine monthly payments received at time t if I'm reinvesting my returns | With 10% return over three years, depositing $900 each month, in three years $34,039.30. Re. downvote. I guess this is too brief and without explanation, but I was rushing. If you want further explanation of how this is calculated check the link already posted by JoeTaxpayer, and have a look at the formula for continuously compounded return. Also, try out the numbers in the simplified example below yourself. E.g. Addendum mhoran_psprep has pointed out that I didn't read the OP's post closely enough. With rolling investments the total return will be: Where n is the month number i.e. 36, 37, etc. |
What to do when a job offer is made but with a salary less than what was asked for? | It depends on your situation. Take the job only if you really need the job and there's no job close to your experience and salary expectations. IMO $70K is not much in NYC given the cost of living there, even if you stay in Jersey City, NJ and take a train. However, it does depend on your lifestyle. Also, if HR is not willing to keep their commitment now, they generally won't keep any other commitments like negotiated perks as part of the job offer. However, sometimes you may have to compromise because of other factors that make the job desirable: the team, the work, and enthusiasm for the business. |
How to make use of EUR/USD fluctuations in my specific case? | I would make this a comment but I am not allowed apparently. Unless your continent blows up, you'll never lost all your money. Google "EUR USD" if you want news stories or graphs on this topic. If you're rooting for your 10k USD (but not your neighbors), you want that graph to trend downward. |
Want to buy expensive product online. Credit line on credit cards not big enough. How do “Preferred Account” programs work? | The preferred accounts are designed to hope you do one of several things: Pay one day late. Then charge you all the deferred interest. Many people think If they put $X a month aside, then pay just before the 6 months, 12 moths or no-payment before 2014 period ends then I will be able to afford the computer, carpet, or furniture. The interest rate they will charge you if you are late will be buried in the fine print. But expect it to be very high. Pay on time, but now that you have a card with their logo on it. So now you feel that you should buy the accessories from them. They hope that you become a long time customer. They want to make money on your next computer also. Their "Bill Me Later" option on that site as essentially the same as the preferred account. In the end you will have another line of credit. They will do a credit check. The impact, both positive and negative, on your credit picture is discussed in other questions. Because two of the three options you mentioned in your question (cash, debit card) imply that you have enough cash to buy the computer today, there is no reason to get another credit card to finance the purchase. The delayed payment with the preferred account, will save you about 10 dollars (2000 * 1% interest * 0.5 years). The choice of store might save you more money, though with Apple there are fewer places to get legitimate discounts. Here are your options: How to get the limit increased: You can ask for a temporary increase in the credit limit, or you can ask for a permanent one. Some credit cards can do this online, others require you to talk to them. If they are going to agree to this, it can be done in a few minutes. Some individuals on this site have even been able to send the check to the credit card company before completing the purchase, thus "increasing" their credit limit. YMMV. I have no idea if it works. A good reason to use the existing credit card, instead of the debit card is if the credit card is a rewards card. The extra money or points can be very nice. Just make sure you pay it back before the bill is due. In fact you can send the money to the credit card company the same day the computer arrives in the mail. Having the transaction on the credit card can also get you purchase protection, and some cards automatically extend the warranty. |
Can a company have a credit rating better than that of the country where it is located? | In one personal finance book I read that if a company is located in a country with credit rating X it can't have credit rating better (lower - i.e. further from AAA level) than X. This is simply wrong. Real world evidence proves it wrong. Automatic Data Processing (ADP), Exxon Mobile (XOM), Johnson & Johnson (JNJ), and Microsoft (MSFT) all have a triple-A rating today, even though the United States doesn't. Toyota (TM) remained triple-A for many years even after Japanese debt was downgraded. The explanation was the following: country has rating X because risk of doing business with it is X and so risk of doing business with any company located in that country automatically can't be better than X. When reading financial literature, you should always be critical. Let's evaluate this statement. First off, a credit rating is not the "risk of doing business." That is way too generic. Specifically, a credit rating attempts to define an individual or company's ability to repay it's obligations. Buying treasuries constitutes as doing business with the gov't, but you can argue that buying stamps at USPS is also doing business with the gov't, and a credit rating won't affect the latter too much. So a credit rating reflects the ability of an entity to repay it's obligations. What does the ability of a government to repay have to do with the ability of companies in that country to repay? Not much. Certainly, if a company keeps it's surplus cash all in treasuries, then downgrading the government will affect the company, but in general, the credit rating of a company determines the company's ability to pay. |
How to rescue my money from negative interest? | First off, the answer to your question is something EVERYONE would like to know. There are fund managers at Fidelity who will a pay $100 million fee to someone who can tell them a "safe" way to earn interest. The first thing to decide, is do you want to save money, or invest money. If you just want to save your money, you can keep it in cash, certificates of deposit or gold. Each has its advantages and disadvantages. For example, gold tends to hold its value over time and will always have value. Even if Russia invades Switzerland and the Swiss Franc becomes worthless, your gold will still be useful and spendable. As Alan Greenspan famously wrote long ago, "Gold is always accepted." If you want to invest money and make it grow, yet still have the money "fluent" which I assume means liquid, your main option is a major equity, since those can be readily bought and sold. I know in your question you are reluctant to put your money at the "mercy" of one stock, but the criteria you have listed match up with an equity investment, so if you want to meet your goals, you are going to have to come to terms with your fears and buy a stock. Find a good blue chip stock that is in an industry with positive prospects. Stay away from stuff that is sexy or hyped. Focus on just one stock--that way you can research it to death. The better you understand what you are buying, the greater the chance of success. Zurich Financial Services is a very solid company right now in a nice, boring, highly profitable business. Might fit your needs perfectly. They were founded in 1872, one of the safest equities you will find. Nestle is another option. Roche is another. If you want something a little more risky consider Georg Fischer. Anyway, what I can tell you, is that your goals match up with a blue chip equity as the logical type of investment. Note on Diversification Many financial advisors will advise you to "diversify", for example, by investing in many stocks instead of just one, or even by buying funds that are invested in hundreds of stocks, or indexes that are invested in the whole market. I disagree with this philosophy. Would you go into a casino and divide your money, putting a small portion on each game? No, it is a bad idea because most of the games have poor returns. Yet, that is exactly what you do when you diversify. It is a false sense of safety. The proper thing to do is exactly what you would do if forced to bet in casino: find the game with the best return, get as good as you can at that game, and play just that one game. That is the proper and smart thing to do. |
How to calculate the price of a bond based with a yield to Maturity, term and annual interest? | The answer to almost all questions of this type is to draw a diagram. This will show you in graphical fashion the timing of all payments out and payments received. Then, if all these payments are brought to the same date and set equal to each other (using the desired rate of return), the equation to be solved is generated. In this case, taking the start of the bond's life as the point of reference, the various amounts are: Pay out = X Received = a series of 15 annual payments of $70, the first coming in 1 year. This can be brought to the reference date using the formula for the present value of an ordinary annuity. PLUS Received = A single payment of $1000, made 15 years in the future. This can be brought to the reference date using the simple interest formula. Set the pay-out equal to the present value of the payments received and solve for X I am unaware of the difference, if any, between "current rate" and "rate to maturity" Finding the rate for such a series of payments would start out the same as above, but solving the resulting equation for the interest rate would be a daunting task... |
Comparing/reviewing personal health insurance plans for the self-employed | Health insurance is tough, as you know, because the offerings vary dramatically by State, and there is the added complication of the Affordable Care Act, which depending on where and who you are has had either a good or bad impact on the available options. If you are a sole proprietor or other business person, I'd advise talking to someone at a local chamber of commerce. Also, professional organizations like the IEEE or ACM (for IT professionals) often offer catastrophic medical or other health plans. Some employer plans give you the option to continue coverage at a higher cost when COBRA lapses as well. If you can't afford a comprehensive plan, make sure to get something to protect you against pre-existing conditions or hospitalization. |
Can I use my Roth IRA to start a business? | Read the Forbes article titled IRA Adventures. While it's not the detailed regulations you certainly need, the article gives some great detail and caution. You may be able to do what you wish, but it must be structured to adhere to specific rules to avoid self dealing. Those rules would be known by the custodians who would help you set up the right structure, it's well buried within IRS regs, I'm sure. Last, in general, using IRA funds to invest in the non-traditional assets adds that other layer of risk, that the investment will be deemed non-allowed and/or self-dealing. So, even if you have the best business idea going, be sure you get proper council on this. |
Cash flow implications of converting primary mortgaged residence to rental | You are assuming 100% occupancy and 100% rent collection. This is unrealistic. You could get lucky and find that long term tenant with great credit that always pays their bills... but in reality that person usually buys a home they do not rent long term. So you will need to be prepared for periods of no renters and periods of non payment. The expenses here I would expect could wipe out more than you can make in "profit" based on your numbers. Have you checked to find out what the insurance on a rental property is? I am guessing it will go up probably 200-500 a year possibly more depending on coverage. You will need a different type of insurance for rental property. Have you checked with your mortgage provider to make sure that you can convert to a rental property? Some mortgages (mine is one) restrict the use of the home from being a rental property. You may be required to refinance your home which could cost you more, in addition if you are under water it will be hard to find a new financier willing to write that mortgage with anything like reasonable terms. You are correct you would be taking on a new expense in rental. It is non deductible, and the IRS knows this well. As Littleadv's answer stated you can deduct some expenses from your rental property. I am not sure that you will have a net wash or loss when you add those expenses. If you do then you have a problem since you have a business losing money. This does not even address the headaches that come with being a landlord. By my quick calculations if you want to break even your rental property should be about 2175/Month. This accounts for 80% occupancy and 80% rental payment. If you get better than that you should make a bit of a profit... dont worry im sure the house will find a way to reclaim it. |
Owning REIT vs owning real estate - which has a better hypothetical ROI? | Your question may have another clue. You are bullish regarding the real estate market. Is that for your city, your state, your nation or for the whole world? Unless you can identify particular properties or neighborhoods that are expected to be better than the average return for your expected bull market in real estate, you will be taking a huge risk. It would be the same as believing that stocks are about to enter a bull market, but then wanting to put 50% of your wealth on one stock. The YTD for the DOW is ~+7%, yet 13 of the 30 have not reached the average increase including 4 that are down more than 7%. Being bullish about the real estate segment still gives you plenty of opportunities to invest. You can invest directly in the REIT or you can invest in the companies that will grow because of the bullish conditions. If your opinion changes in a few years it is hard to short a single property. |
Can we amend last year's Schedule C to indicate reduced income due to a customer refund this year for a product we sold last year? | I am not an accountant, but I have a light accounting background, despite being primarily an engineer. I also have a tiny schedule C business which has both better and worse years. I am also in the United States and pay US taxes. I assume you are referring to the US Form 1040 tax return, with the attached Schedule C. However little I know about US taxes, I know nothing about foreign taxes. You are a cash-basis taxpayer, so the transactions that happen in each tax year are based on the cash paid and cash received in that year. You were paid last year, you computed your schedule C based on last year's actual transactions, and you paid taxes on that income. You can not recompute last years schedule C based on the warranty claim. You might want to switch to an accrual accounting method, where you can book allowances for warranty claims. It is more complex, and if your business is spotty and low volume, it may be more trouble than it is worth. At this point, you have two months to look for ways to shift expenses into next year or being income into this year, both of which help offset this loss. Perhaps a really aggressive accountant would advise otherwise (and remember, I am not an accountant), but I would take the lumps and move on. This article on LegalZoom (link here) discusses how to apply a significant net operating loss (NOL) in this year to the previous two years, and potentially carry it forward to the next two years. This does involve filing amended returns for the prior two years, showing this year's NOL. For this to be relevant, your schedule C loss this year must exceed your other W2 and self-employment income this year, with other tests also applied. Perhaps a really aggressive accountant would advise otherwise (and remember, I am not an accountant), but I would take the lumps and move on. |
Started new job. Rollover previous employer 401k to new 401k, IRA or Roth IRA? | Rolling a 401(k) to an IRA should be your default best option. Rolling a 401(k) to another 401(k) is rarely the best option, but that does happen. I've done it once when I started a job at a company that had a great 401(k) with a good selection of low-cost mutual funds. I rolled the 401(k) from one previous job in to this 401(k) to take advantage of it. In all other cases, I rolled 401(k)s from previous jobs to my Rollover IRA, which gave me the most freedom of investment options. Finally, with 401(k)-to-Roth IRA rollovers, it's important to decouple two concepts so you can analyze it as a sum of two transactions: |
Is there a good rule of thumb for how much I should have set aside as emergency cash? | The main factor should be what sorts of emergencies you are trying and also need to protect yourself against. Overall I'd say at least 6-9 months of expenses, adjusted for the above factors. More might be better but I'd probably keep that in a different type of investment vehicle, mainly because it doesn't really need to be accessible instantaneously like your normal emergency fund would need to be. |
How to account for startup costs for an LLC from personal money? | Typically you give a loan to the company from yourself as a private person, and when the company makes money the company pays it back to you. Then the company pays for all the expenses with the money from the loan. Even if you don't want a business account yet, you can probably ask your bank for a second account (mine in the UK did that without any problems). |
What does quantitative easing 2 mean for my bank account? | Probably means next to zero chance of having decent rates on savings accounts for the near future - who needs your money if banks can have government money for free? Probably no short-term effects on you besides that. |
What is the best way to short the San Francisco real estate market? | You could short home builders who do a lot of their business in Northern California. (Not just San Francisco, Silicon Valley, or even the Bay Area.) Home prices in Sacramento and the northern San Joaquin Valley are correlated with Bay Area home prices. Many of these builders went broke during the last bust, so you might have trouble finding a publicly traded home builder that is concentrated in just one market. |
Value of a call option spread | On expiry, with the underlying share price at $46, we have : You ask : How come they substract 600-100. Why ? Because you have sold the $45 call to open you position, you must now buy it back to close your position. This will cost you $100, so you are debited for $100 and this debit is being represented as a negative (subtracted); i.e., -$100 Because you have purchased the $40 call to open your position, you must now sell it to close your position. Upon selling this option you will receive $600, so you are credited with $600 and this credit is represented as a positive (added) ; i.e., +$600. Therefore, upon settlement, closing your position will get you $600-$100 = $500. This is the first point you are questioning. (However, you should also note that this is the value of the spread at settlement and it does not include the costs of opening the spread position, which are given as $200, so you net profit is $500-$200 = $300.) You then comment : I know I am selling 45 Call that means : As a writer: I want stock price to go down or stay at strike. As a buyer: I want stock price to go up. Here, note that for every penny that the underlying share price rises above $45, the money you will pay to buy back your short $45 call option will be offset by the money you will receive by selling the long $40 call option. Your $40 call option is covering the losses on your short $45 call option. No matter how high the underlying price settles above $45, you will receive the same $500 net credit on settlement. For example, if the underlying price settles at $50, then you will receive a credit of $1000 for selling your $40 call, but you will incur a debit of $500 against for buying back your short $45 call. The net being $500 = $1000-$500. This point is made in response to your comments posted under Dr. Jones answer. |
Do I qualify for a personal 401-K Plan? | I'm not a tax lawyer, but from what I can tell it looks like you'd be eligible to use your contractor income to fund a Solo 401(k). http://www.irafinancialgroup.com/whatissolo401k.php "To access these benefits an investor must meet two eligibility requirements: The presence of self employment activity. The absence of full-time employees." And from the IRS itself (http://www.irs.gov/pub/irs-tege/forum08_401k.pdf) |
How do financial services aimed at women differ from conventional services? | Less so today, but there was a time that women played a smaller role in the household finances, letting the husband manage the family money. Women often found themselves in a frightening situation when the husband died. Still, despite those who protest to the contrary, men and women tend to think differently, how they problem solve, how they view risk. An advisor who understands these differences and listens to the client of either sex, will better serve them. |
How does delta of an option change with time if underlying price is constant? | So, this isn't always the case, but in the example provided the option is most likely in the money or near the money since the delta is nearly 1 - indicating that a $1 move in the underlying results in a $0.92 move in the option - this will happen when the expiration is very far out or the option is in the money. As expiration gets closer, movements in the underlying become more pronounced in the options because the probability of the stock price moving from its current position is lower. As the probability of the stock price moving goes down, the delta of in the money options approaches 100, eventually reaching 100 at expiration. Another way to word this is that the premium on in the money options shrinks as expiration approaches and the intrinsic value of the option increases as percentage of total value so that movements in the underlying stock price become a greater influence on the option price - hence a greater delta. Again, if the option is out of the money, this is not the case. |
How do stocks like INL (traded in Frankfurt) work? | A "stock price" is nothing but the price at which some shares of that stock were sold on an exchange from someone willing to sell those shares at that price (or more) to someone willing to buy them at that price (or less). Pretty much every question about how stock prices work is answered by the paragraph above, which an astonishingly large number of people don't seem to be aware of. So there is no explicit "tracking" mechanism at all. Just people buying and selling, and if the current going price on two exchanges differ, then that is an opportunity for someone to make money by buying on one exchange and selling on the other - until the prices are close enough that the fees and overhead make that activity unprofitable. This is called "arbitrage" and a common activity of investment banks or (more recently) hedge funds and specialized trading firms spun off by said banks due to regulation. |
What debts are both partners liable for in a 'community property' state? | (Yes, I know this is a seven year old question.) Does this only apply to debts that were taken on during marriage Yes or to all debts of both partners? No. The important thing to remember is that it's both debts and assets acquired during the marriage which are shared. This comes from the reality that men in the olden times were the ones in business, accumulating wealth, etc while the woman "made the home". The working assumption was that the woman who made the home was an equal partner with the man, since he benefited from a good home, and she benefited from his income. The fact that pre-marriage debts and assets were not community property also protected the woman, because she was able to then take back her dowry and use that to support herself. (N.B. - I live in a CP state.) |
Is it a good practice to keep salary account and savings account separate? | There are a lot of good answers, but I will share my experience. First, a savings account needs to be for savings. If your in the US you have "Regulation D" to deal with and that will bite you on the rear if you go over those limits. Specially easy to do if your purchasing from a savings account. Next having an "Income" account and a "Spending" account can be a very good tool to build a nest egg. So for example you get $1500 into your income account and then move $1000 to your spending account then budget based on that $1000. This is an amazing thing to do, so long as you have the discipline to never transfer that extra $500, and pretend your broke when you run out of the $1000. That being said there is no reason that you can't do that in one account. It's all preference. My wife and I use YNAB (an envelope budgeting system) to do just that. We don't need the separate accounts. We are no more likely to "not spend" in one account then we are to "not spend" in two accounts. It's all just self discipline and what you need to do. This does lead to the situation we call YNAB broke. It's when we have to start choosing between "going hungry" or getting that new DVD, even though our bank account has $5,000 in it. It's even harder when you choose "go hungry" and have to follow through with it, even though you have enough to buy a used car in your bank account. But rather it's "YNAB broke" or your spending account is empty and your income account it full, the result is the same. It's up to "you" to have the self discipline not to spend. Rather that's in one account or two makes little difference. |
SBI term deposit versus SBI bonds | I wrote one to check against the N3 to N6 bonds: http://capitalmind.in/2011/03/sbi-bond-yield-calculator/ Things to note: |
Should I Use an Investment Professional? | Ask yourself the same question for furniture making. Would you feel more comfortable sitting in a chair that you made yourself versus one that you bought from a furniture store? How about one that you bought from IKEA and assembled? For an experienced, competent furniture maker, you might be able to make an equivalent chair for less money and be highly confident. For a "DIY" builder, you might be less confident but be willing to take more of a risk with the possibility of making a good chair for less money (and gain experience on what not to do next time). The same applies to investing - if you are highly confident in your own abilities, DIY investing may work better for you. For the "general population", however, relying on experts to do the hard work (and paying a little more for their services) is probably a better option and gives you more confidence. As for the second quote, I'm note sure there's a causality there. If anything, I think it's the other way around - people who have more money saved for retirement are more likely to use investment advisors. |
Does a disciplined stock investor stick with their original sell strategy, or stay in and make more? | Ask yourself a better question: Under my current investment criteria would I buy the stock at this price? If the answer to that question is yes you need to work out at what price you would now sell out of the position. Think of these as totally separate decisions from your original decisions to buy and at what price to sell. If you would buy the stock now if you didn't already hold a position then you should keep that position as if you had sold out at the price that you had originally seen as your take profit level and bought a new position at the current price without incurring the costs. If you would not buy now by those criteria then you should sell out as planned. This is essentially netting off two investing decisions. Something to think about is that the world has changed and if you knew what you know now then you would probably have set your price limit higher. To be disciplined as an investor also means reviewing current positions frequently and without any sympathy for past decisions. |
Am I considered in debt if I pay a mortgage? | The expression "in debt" when talking about a person's financial affairs means that the sum of debit balances on all accounts exceeds the sum of credit balances on all accounts. A mortgage account is not excluded from that. This definition also does not consider whether any of the debt is secured, or ownership of assets (shares, property, chattels, etc). So, someone with a mortgage of one million dollars for a home that is worth two million is in debt by one million dollars, until they they sell the home (for that amount) and pay down the mortgage. That means "in debt" is not necessarily a statement about net worth. |
Are there brokers or companies who trade Forex and make money for us on our investment? And do you think fxtradeinvestment is legit? | There are legitimate multi currency mutual funds/efts. But I don't think their rate of return will produce the extra money you're looking for any faster than any other kind of investment with comparable risks. To make money fast, you have to accept nontrivial risk of losing money fast, which isn't what you seem to have in mind. |
Why might a robo-advisor service like Betterment be preferable to just buying a single well-performing index fund like SPY? | Diversification and convenience: Is .15-0.35% fee worth it? It depends on your net worth, amount you invest and value of your time (if you have high net worth and low cost of your time the fee is highier then in case when you have low net worth but high cost of time - so Betterment seems to be a better option to young professional just after college then to someone already retired), your interest in finance, your willpower etc. Is Betterment allocation better then pure SPY? From what I understand about finance theory - yes. EDIT (as requested) I don't have any affiliation with any financial institution as far as I know. I opened it to get used to just investing as oppose to saving and ups and downs of market (and read up on the portfolio management, especially index funds) and I guess it worked well for me. I plan to move out entirely out of it once the cost of the account would be more then paying for a few coffees and move the account to Vanguard, Schwab or something similar. In other accounts (HSA/...) I use simpler portfolio then the Betterment one (US Total, Small Value, Developed, Emerging and Bonds) but there are people who use simpler (search for 3 fund portfolio). |
How long do you have to live somewhere to be a resident for tax purposes? | If you are going to be trying clever stuff with taxes in different place, you probably need a professional. Different countries definitely have different laws on the subject. For example (several years ago) the UK considered you absent from the UK for tax purposes from the day you left, provided you were gone for a year, whereas Canada didn't charge you tax as long as you were not in the country for six months in the year. A carefully timed move enabled me to not pay tax at all for six months because I wasn't resident anywhere. Also it was irrelevant whether I intended to stay or not. |
How much more than my mortgage should I charge for rent? | I think the mortgage must not be in the equation at all in order to determine how much to charge. Of course you want to cover your mortgage but the renting price is determined only by how much the renter is willing to pay (offer and demand) and not your mortgage (some people don't even have a mortgage). In other words I think you should be charging a price based on similar rented houses. |
How do I get into investing in stocks? | Read "The intelligent Investor" book before you do anything. I started when I really didn't understand anything about stocks. I bought an internet stock for $150 per share which sold at 75cents a year later. I sold it for a profit but would've been a disaster. |
What are the real risks in “bio-technology” companies? | Be wary of pump and dump schemes. This scheme works like this: When you observe that "From time to time the action explodes with 100 or 200% gains and volumes exceeding one million and it then back down to $ 0.02", it appears that this scheme was performed repeatedly on this stock. When you see a company with a very, very low stock price which claims to have a very bright future, you should ask yourself why the stock is so low. There are professional stock brokers who have access to the same information you have, and much more. So why don't they buy that stock? Likely because they realize that the claims about the company are greatly exaggerated or even completely made up. |
Buying puts without owning underlying | Yes, it's completely normal to buy (and sell) puts and other options without holding the underlying. However, every (US) brokerage I know of only permits this within a margin account. I don't know why...probably a legal reason. You don't actually have to use the margin in a margin account. If you want to trade options, though, you will need a margin account. |
HSBC Hong Kong's “Deposit Plus” Product: What is it, and what strategies to employ? | HSBC, Hang Seng, and other HK banks had a series of special savings account offers when I lived in HK a few years ago. Some could be linked to the performance of your favorite stock or country's stock index. Interest rates were higher back then, around 6% one year. What they were effectively doing is taking the interest you would have earned and used it to place a bet on the stock or index in question. Technically, one way this can be done, for instance, is with call options and zero coupon bonds or notes. But there was nothing to strategize with once the account was set up, so the investor did not need to know how it worked behind the scenes... Looking at the deposit plus offering in particular, this one looks a little more dangerous than what I describe. See, now we are in an economy of low almost zero interest rates. So to boost the offered rate the bank is offering you an account where you guarantee the AUD/HKD rate for the bank in exchange for some extra interest. Effectively they sell AUD options (or want to cover their own AUD exposures) and you get some of that as extra interest. Problem is, if the AUD declines, then you lose money because the savings and interest will be converted to AUD at a contractual rate that you are agreeing to now when you take the deposit plus account. This risk of loss is also mentioned in the fine print. I wouldn't recommend this especially if the risks are not clear. If you read the fine print, you may determine you are better off with a multicurrency account, where you can change your HK$ into any currency you like and earn interest in that currency. None of these were "leveraged" forex accounts where you can bet on tiny fluctuations in currencies. Tiny being like 1% or 2% moves. Generally you should beware anything offering 50:1 or more leverage as a way to possibly lose all of your money quickly. Since you mentioned being a US citizen, you should learn about IRS form TD F 90-22.1 (which must be filed yearly if you have over $10,000 in foreign accounts) and google a little about the "foreign account tax compliance act", which shows a shift of the government towards more strict oversight of foreign accounts. |
How can I legally and efficiently help my girlfriend build equity by helping with a mortgage? | Have her chip in for the regular expenses, utilities, food, etc., and a bit for "rent." Then tell her to be sure to deposit to her retirement account, preferably a matched 401(k). It's admirable to want her to build 'equity' but it's pretty convoluted. You can't actually give her ownership, and in the event you break up (I know you won't, but this is to help other readers) you'll have to pay her back a lump sum when she moves out. That might not be so easy. |
What is the smartest thing to do in case of a stock market crash | I would also be getting out of the stock market if I noticed prices starting to fall and a crash possibly on the way. There are some good and quite simple techniques I would use to time the markets over the medium to long term. I have described some of them in the answer to this question of mine: What are some simple techniques used for Timing the Stock Market over the long term? You could use similar techniques in your investing. And in regards to back-testing DCA to Timing The Markets, I have done that too in my answer to the following question: Investing in low cost index fund — does the timing matter? Timing the Markets wins hand down. In regards to back-testing and the concerns Kent Anderson has brought up, when I back-test a trading strategy, if that strategy is successful, I then forward test it over a year or two to confirm the results. As with back-testing you can sometimes curve fit your criteria too much. By forward testing you are confirming that the strategy is robust over different market conditions. One strategy you can take when the market does start to fall is short selling, as mentioned by some already. I am now short selling using CFDs over the short to medium term as one of my more aggressive strategies. I have a longer term strategy where I do not short, but tighten my stop losses when the market starts to tank. Sometimes my positions will keep going up even though the market as a whole is heading down, and I can make an extra 5% to 10% on these positions before I get taken out. The rare position even continues going up during the whole downturn and when the market starts to recover. So I let the market decide when I get out and when I stay in, I leave my emotions out of it. The best thing you can do is have a written trading plan with all your criteria for getting into the market, your criteria for getting out of the market and your position sizing and risk management incorporated in the plan. |
How to decide on split between large/mid/small cap on 401(k) and how often rebalance | One other thing to consider, particularly with Vanguard, is the total dollar amount available. Vanguard has "Admiralty" shares of funds which offer lower expense ratios, around 15-20% lower, but require a fairly large investment in each fund (often 10k) to earn the discounted rate. It is a tradeoff between slightly lower expense ratios and possibly a somewhat less diverse holding if you are relatively early in your savings and only have say 20-30k (which would mean 2 or 3 Admiralty share funds only). |
Are cashiers required to check a credit card for a signature in the U.S.? | Per their merchant agreements, Visa and MasterCard say that the signature on the back of the card is the proper way to identify the card holder. If a card is not signed, the merchant is supposed to check your ID and make you sign the card before accepting it for payment. Merchants are not allowed the require an ID for paying with a signed card. Of course, store employees rarely know all these things. Some will gladly accept an unsigned card. Some will try to make you show your ID. |
Why do stores and manufacturers use mail in rebates? A scam, or is there a way to use them effectively? | Unfortunately too many companies view a Mail in rebate as an unwelcome cost instead of as a customer interaction issue, and it gives the company a bad reputation when someone gets stiffed on the mail in rebate, and it also has basically ruined the concept to a large degree. Many people will simply regard the rebate as worthless and evaluate the product based on the full price - killing what the company wanted to get out of it (Rich Seller hit the nail on the head), which is why you see "instant rebates" etc. |
Higher returns from international markets? | I went to Morningstar's "Performance" page for FUSEX (Fideltiy's S&P 500 index fund) and used the "compare" tool to compare it with FOSFX and FWWFX, as well as FEMKX (Fidelity Emerging Markets fund). According to the data there, FOSFX outperformed FUSEX in 2012, FEMKX outperformed FUSED in 2010, and FWWFX outperformed FUSEX in both 2010 and 2012. When looking at 10- and 15-year trailing returns, both FEMKX and FWWFX outperformed FUSEX. What does this mean? It means it matters what time period you're looking at. US stocks have been on an almost unbroken increase since early 2009. It's not surprising that if you look at recent returns, international markets will not stack up well. If you go back further, though, you can find periods where international funds outperformed the US; and even within recent years, there have been individual years where international funds won. As for correlation, I guess it depends what you mean by "low". According to this calculator, for instance, FOSFX and FUSEX had a correlation of about 0.84 over the last 15 years. That may seem high, but it's still lower than, say, the 0.91 correlation between FUSEX and FSLCX (Fideltiy Small Cap). It's difficult to find truly low correlations among equity funds, since the interconnectedness of the global economy means that bull and bear markets tend to spread from one country to another. To get lower correlations you need to look at different asset classes (e.g., bonds). So the answer is basically that some of the funds you were already looking at may be the ones you were looking for. The trick is that no category will outperform any other over all periods. That's exactly what volatility means --- it means the same category that overperforms in some periods will underperform in others. If international funds always outperformed, no one would ever buy US funds. Ultimately, if you're trying to decide on investments for yourself, you need to take all this information into account and combine it with your own personal preferences, risk tolerance, etc. Anecdotally, I recently did some simulation-based analyses of Vanguard funds using data from the past 15 years. Over this period, Vanguard's emerging markets fund (VEIEX) comes out far ahead of US funds, and is also the least-correlated with the S&P 500. But, again, this analysis is based only on a particular slice of time. |
Does Implied Volatilty factor in all known future events? | From every article I've encountered, the chicken and egg aspect suggests that IV is produced by looking at options pricing, and calculating the IV from that. The implication is that whatever is known at that time is included in the price. And that when you see a particular option trade an unusual number of contracts at a given price, the implication is that someone thinks they know something that's not already priced in, i.e. that the current price is not accurate, they can profit on the future event. |
Why do banks insist on allowing transactions without sufficient funds? | Believe it or not, this is done as a service to you. The reason for this has to do with a fundamental difference between a credit card account and a checking account. With a credit card account, there is no money in the account; every charge is borrowed money. When you get to your credit limit, your credit transactions will start getting declined, but if the bank does for some reason let one get approved, it's not a big deal for anyone; it just means that you owe a little more than your credit limit. Note that (almost) every credit card transaction today is an electronic transaction. A checking account, however, has real money in it. When it is gone, it is gone. When a balance inquiry is done, the bank has no way of knowing how many checks you've written that have not been cashed yet. It is a customer's responsibility to know exactly how much money is available to spend. If you write more checks than you have money for in your account, technically you have committed a crime. Unfortunately, there are too many people now that are not taking the responsibility of calculating their own checking account balance seriously, and bad checks are written all the time. When a bank allows these transactions to be paid even though you don't have enough money in your account, they are preventing a crime from being committed by you. The fee is a finance charge for loaning you the money, but it is also there to encourage you not to spend more than you have. Even if you use a debit card, it is still tied to a checking account, and the bank doesn't know if you have written enough checks to overdraw your account or not. It is still your responsibility to keep track of your own available balance. Every time this happens to you, thank the bank as you pay this fee, and then commit to keeping your own running balance and always knowing how much you have left in your account. |
How can a person with really bad credit history rent decent housing? | I don't think you've mentioned which State you're in. Here in Ontario, a person who is financially incapable can have their financial responsibility and authority removed, and assigned to a trustee. The trustee might be a responsible next of kin (as her ex, you would appear unsuitable: that being a potential conflict of interest); otherwise, it can be the Public Guardian and Trustee. It that happens, then the trustee handles the money; and handles/makes any contracts on behalf of (in the name of) the incapable person. The incapable person might have income (e.g. spousal support payments) and money (e.g. bank accounts), which the trustee can document in order to demonstrate credit-worthiness (or at least solvency). For the time being, the kids see it as an adventure, but I suspect, it will get old very fast. I hope you have a counsellor to talk with about your personal relationships (I've had or tried several and at least one has been extraordinarily helpful). You're not actually expressing a worry about the children being abused or neglected. :/ Is your motive (for asking) that you want her to have a place, so that the children will like it (being there) better? As long as your kids see it as an adventure, perhaps you can be happy for them. Perhaps (I don't know: depending on the people) too it's a good (or at least a better) thing that they are visiting with friends and relatives; and, a better conversational topic with those people might be how they show your children a good time (instead of your ex's money). One possible way I thought of co-signing is if a portion of child/spousal support goes directly to the landlord. I asked the Child Support Services (who deduct money from my paycheck monthly to pay support to my ex) and they told me that they are not authorized to do this. Perhaps (I don't know) there is some way to do that, if you have your ex's cooperation and a lawyer (and perhaps a judge). You haven't said what portions of your payments are for Child support, versus Spousal support (nor, who has custody, etc). If a large part of the support is for the children, then perhaps the children can rent the place. (/wild idea) Note that, in Ontario, there are two trusteeship decisions to make: 1) financial; and 2) personal care, which includes housing and medical. Someone can retain their own 'self-care' authority even if they're judged financially incapable (or vice versa if there's a personal-care or medical decision which they cannot understand). The technical language is, "Mentally Incapable of Managing Property" This term applies to a person who is unable to understand information that is relevant to making a decision or is unable to appreciate the reasonably foreseeable consequences of a decision or lack of decision about his or her property. Processes for certifying an individual as being mentally incapable of managing property are prescribed in the SDA (Substitute Decisions Act), and in the Mental Health Act." The Mental Heath Act is for medical emergencies (only); but Ontario has a Substitute Decisions Act as well. An intent of the law is to protect vulnerable people. People may also acquire and/or name their own trustee and/or guardian voluntarily: via a power of attorney, a living will, etc. I don't know: how about offering the landlord a year's rent in advance, or in trust? I guess that 1) a court order can determine/override/guarantee the way in which the child support payments are directed 2) it's easier to get that order/agreement if you and your ex cooperate 3) there are housing specialists in your neighborhood: They can buy housing instead of renting it. Or be given (gifted) housing to live in. |
Should I stockpile nickels? | It seems like a lot of hassle to make a few bucks. $1,000 in nickels would weight 100kg. I'd rather put my money in ING or into a bond mutual fund like VBMFX. |
What's the best application, software or tool that can be used to track time? | A free solution that I've been using is Task Coach. It has tasks, subtasks, categories, and all the stuff you would expect from a time tracking program. It also counts each distinct period spent on a task as a separate "effort" that you can add comments, for example to remind you what that chunk of time was spent on. |
What type of insurance would protect you against the Amazon 1p bug? | I believe the appropriate recourse in this scenario is to bring a court case for breach of contract. The 1p repricing issue has been admitted as an error out of scope of the purpose of the software. |
When you're really young and have about 2K to start investing $ for retirement, why do some people advise you to go risky? | Those who say a person should invest in riskier assets when young are those who equate higher returns with higher risk. I would argue that any investment you do not understand is risky and allows you to lose money at a more rapid rate than someone who understands the investment. The way to reduce risk is to learn about what you want to invest in before you invest in it. Learning afterward can be a very expensive proposition, possibly costing you your retirement. Warren Buffet told the story on Bloomberg Radio in late 2013 of how he read everything in his local library on investing as a teenager and when his family moved to Washington he realized he had the entire Library of Congress at his disposal. One of Mr. Buffett's famous quotes when asked why he doesn't invest in the tech sector was: "I don't invest in what I do not understand.". There are several major asset classes: Paper (stocks, bonds, mutual funds, currency), Commodities (silver, gold, oil), Businesses (creation, purchase or partnership as opposed to common stock ownership) and Real Estate (rental properties, flips, land development). Pick one that interests you and learn everything about it that you can before investing. This will allow you to minimize and mitigate risks while increasing the rewards. |
strategy for the out of favour mining sector | I'll take a stab at this question and offer a disclosure: I recently got in RING (5.1), NEM (16.4), ASX:RIO (46.3), and FCX (8.2). While I won't add to my positions at current prices, I may add other positions, or more to them if they fall further. This is called catching a falling dagger and it's a high risk move. Cons (let's scare everyone away) Pros The ECB didn't engage in as much QE as the market hoped and look at how it reacted, especially commodities. Consider that the ECB's actions were "tighter" than expected and the Fed plans to raise rates, or claims so. Commodities should be falling off a cliff on that news. While most American/Western attention is on the latest news or entertainment, China has been seizing commodities around the globe like crazy, and the media have failed to mention that even with its market failing, China is still seizing commodities. If China was truly panicked about its market, it would stop investing in other countries and commodities and just bail out its own country. Yet, it's not doing that. The whole "China crisis" is completely oversold in the West; China is saying one thing ("oh no"), but doing another (using its money to snap up cheap commodities). Capitalism works because hard times strengthen good companies. You know how many bailouts ExxonMobil has received compared to Goldman Sachs? You know who owns more real wealth? Oil doesn't get bailed out, banks do, and banks can't innovate to save their lives, while oil innovates. Hard times strengthen good companies. This means that this harsh bust in commodities will separate the winners from the losers and history shows the winners do very well in the long run. Related to the above point: how many bailouts from tax payers do you think mining companies will get? Zero. At least you're investing in companies that don't steal your money through government confiscation. If you're like me, you can probably find at least 9 people out of 10 who think "investing in miners is a VERY BAD idea." What do they think is a good idea? "Duh, Snapchat and Twitter, bruh!" Then there's the old saying, "Be greedy when everyone's fearful and fearful when everyone's greedy." Finally, miners own hard assets. Benjamin Graham used to point this out with the "dead company" strategy like finding a used cigarette with one more smoke. You're getting assets cheap, while other investors are overpaying for stocks, hoping that the Fed unleashes moar QE! Think strategy here: seize cheap assets, begin limiting the supply of these assets (if you're the saver and not borrowing), then watch as the price begins to rise for them because of low supply. Remember, investors are part owners in companies - take more control to limit the supply. Using Graham's analogy, stock pile those one-puff cigarettes for a day when there's a low supply of cigarettes. Many miners are in trouble now because they've borrowed too much and must sell at a low profit, or in some cases, must lose. When you own assets debt free, you can cut the supply. This will also help the Federal Reserve, who's been desperately trying to figure out how to raise inflation. The new patriotic thing to do is stimulate the economy by sending inflation up, and limiting the supply here is key. |
Do bond interest rate risk premiums only compensate for the amount investors might lose? | [...] are all bonds priced in such a way so that they all return the same amount (on average), after accounting for risk? In other words, do risk premiums ONLY compensate for the amount investors might lose? No. GE might be able to issue a bond with lower yield than, say, a company from China with no previous records of its presence in the U.S. markets. A bond price not only contains the risk of default, but also encompasses the servicability of the bond by the issuer with a specific stream of income, location of main business, any specific terms and conditions in the prospectus, e.g.callable or not, insurances against default, etc. Else for the same payoff, why would you take a higher risk? The payoff of a higher risk (not only default, but term structure, e.g. 5 years or 10 years, coupon payments) bond is more, to compensate for the extra risk it entails for the bondholder. The yield of a high risk bond will always be higher than a bond with lower risk. If you travel back in time, to 2011-2012, you would see the yields on Greek bonds were in the range of 25-30%, to reflect the high risk of a Greek default. Some hedge funds made a killing by buying Greek bonds during the eurozone crisis. If you go through the Efficient frontier theory, your argument is a counter statement to it. Same with individual bonds, or a portfolio of bonds. You always want to be compensated for the risk you take. The higher the risk, the higher the compensation, and vice versa. When investors buy the bond at this price, they are essentially buying a "risk free" bond [...] Logically yes, but no it isn't, and you shouldn't make that assumption. |
Are there alternatives to double currency account to manage payments in different currencies? | Cheaper and faster are usually mutually exclusive. If you want faster, nothing is faster than cash. I would recommend using an ATM to withdraw cash from your USD account as Florints and then use as appropriate. If you want cheaper, then the cheapest currency conversion commonly available is foreign exchange / transfer services like OFX / XE Trade / Transferwise. Turn around time on these can be as little as a business day or two but more commonly takes a few business days, but they typically offer the best currency exchange rates at the lowest cost. If you must make regular payments to 3rd parties, you can set these services up to send the converted currency to a 3rd party rather than back to your own account. |
Lease vs buy car with cash? | A lease is a rental plain and simple. You borrow money to finance the expected depreciation over the course of the lease term. This arrangement will almost always cost more over time of your "ownership." That does not mean that a lease is always a worse "deal." Cars are almost always a losing proposition; save for the oddball Porsche or Ferrari that is too scarce relative to demand. You accept ownership of a car and it starts to lose value. New cars lose value faster than used cars. Typically, if you were to purchase the car, then sell it after 3 years, the total cost over those three years will work out to less total money than the equivalent 36 month lease. But, you will have to come up with a lot more money down, or a higher monthly payment, and/or sell the car after 36 months (assuming the pretty standard 36 month lease). With this in mind, some cars lease better than others because the projected depreciation is more favorable than other brands or models. Personally, I bought a slightly used car certified pre-owned with a agreeable factory warranty extension. My next car I may lease. Late model cars are getting so unbelievably expensive to maintain that more and more I feel like a long term rental has merit. Just understand that for the convenience, for the freeing up of your cash flow, for the unlikelihood of maintenance, to not bother with resale or trading the car in, a lease will cost a premium over a purchase over the same time frame. |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.