Question stringlengths 14 166 | Answer stringlengths 3 17k |
|---|---|
Is there anything comparable to/resembling CNN's Fear and Greed Index? | There are a number of ways to measure such things and they are generally called "sentiment indicators". The ones that I have seen "work", in the sense that they show relatively high readings near market tops and relatively low readings near market bottoms. The problem is that there are no thresholds that work consistently. For example, at one market top a sentiment indicator may read 62. At the next market top that same indicator might read 55. So what threshold do you use next time? Maybe the top will come at 53, or maybe it will not come until 65. There was a time when I could have listed examples for you with the names of the indicators and what they signaled and when. But I gave up on such things years ago after seeing such wide variation. I have been at this a long time (30+ years), and I have not found anything that works as well as we would like at identifying a top in real time. The best I have found (although it does give false signals) is a drop in price coupled with a bearish divergence in breadth. The latter is described in "Stan Weinstein's Secrets For Profiting in Bull and Bear Markets". Market bottoms are a little less difficult to identify in real time. One thing I would suggest if you think that there is some way to get a significant edge in investing, is to look at the results of Mark Hulbert's monitoring of newsletters. Virtually all of them rise and fall with the market and almost none are able to beat buy and hold of the Wilshire 5000 over the long term. |
Should I Have Received a 1099-G? | When you itemize your deductions, you get to deduct all the state income tax that was taken out of your paycheck last year (not how much was owed, but how much was withheld). If you deducted this last year, then you need to add in any amount that you received in state income tax refunds last year to your taxes this year, to make up for the fact that you ended up deducting more state income tax than was really due to the state. If you took the standard deduction last year instead of itemizing, then you didn't deduct your state income tax withholding last year and you don't need to claim your refund as income this year. Also, if you itemized, but chose to take the state sales tax deduction instead of the state income tax deduction, you also don't need to add in the refund as income. For whatever reason, Illinois decided that you don't get a 1099-G. It might be that the amount of the refund was too small to warrant the paperwork. It might be that they screwed up. But if you deducted your state income tax withholding on last year's tax return, then you need to add the state tax refund you got last year on line 10 of this year's 1040, whether or not the state issued you a form or not. Take a look at the Line 10 instructions starting on page 22 of the 1040 instructions to see if you have any unusual situations covered there that you didn't mention here. (For example, if you received a refund check for multiple years last year.) Then check your tax return from last year to verify that you deducted your state income tax withholding on Schedule A. If you did, then this year add the refund you got from the state to line 10 of this year's 1040. |
Buy home and leverage roommates, or split rent? | what I should think about. If you decide to do this - get everything in writing. Get lease agreements to enforce the business side of the relationship. If they are not comfortable with that much formality, it's probably best not to do it, I'm not saying that you should not do this - but that you need to think about these type of scenarios before committing to a house purchase. |
How do I go about finding an honest & ethical financial advisor? | I think the other answers raise good points. But to your question, "How do I find an honest financial adviser" ask your friends and family. See who they talk to and confide in. Go meet that person, understand what they do and how they view things and if you gel, great. Honesty and strong ethics exist in individuals regardless of laws. What is it you're trying to accomplish? You just have some money you want to put aside? You want to save for something? You want to start a budget or savings plan? Your first step may be talking to a tax person, not an investment adviser. Sometimes the most significant returns are generated when you simply retain more of your earnings and tax people know how to accomplish that. You're just graduating university, you're just going to get your first job. You don't need to hunt for the right heavy hitter 30% gains generating financial adviser. You need to establish your financial foundation. Crawl, walk, then run. There are some basics (that transcend international borders). If you don't know much about investing, most (if not all) retirement and individual brokerage type accounts will give you access to some kind of market index fund. You don't need to multinationally diversify in to high fee funds because "emerging markets are screaming right now." Typically, over a few years the fees you pay in the more exotic asset classes will eat up the gains you've made compared to a very low fee market index fund. You can open free accounts at a number of financial institutions. These free accounts at these banks all have a list of zero commission zero load funds, all have something resembling an index fund. You can open your account for free, deposit your money for free, and buy shares in an index fund for free. |
Is it bad etiquette to use a credit or debit card to pay for single figure amounts at the POS | It's fine. Some people (including myself) charge any amount, no matter how small. I think charging small amounts is encouraged by no longer having to sign for small amounts (Not sure if this is state-by-state, though). Somewhere, the transfering of digital money is being paid for - either in the merchant fees, an ATM fee, or my time in going to a bank or ATM where I will not be charged a fee. |
Figuring out an ideal balance to carry on credit cards [duplicate] | One key point that other answers haven't covered is that many credit cards have a provision where if you pay it off every month, you get a grace period on the interest. Interest doesn't accrue at all unless you rollover a non-zero balance. But if you do, you pay interest on the average balance, not the rolled-over balance, for the entire month. You have to ask yourself what you are trying to accomplish with your credit history? Are you trying to maximize your "buying power" (really, leverage)? Or are you trying to make sure that you get the best terms on a moderately sized loan (house mortgage, car note)? As JohnFx and losthorse already noted, it's in the banker's best interest to maximize the profit they make off of you. Of course, that is not in your best interest. Keeping a credit card balance from month to month definitely feeds the greedy nature of the financing beast. And makes them willing to take more risks, because the returns are also higher. But those returns cost you. If you are planning to get sensible loans in the future, that you can comfortably afford, you won't need a maxed credit score. You won't get the largest loan amounts, but because you are doing the sensible thing and making a large down payment, the risk is also very low and you'll find lenders willing to give you a low interest rate. Because even though the reward is lower than the compulsive purchaser who pays an order of magnitude more in financing fees, the return/risk ratio is still very favorable to the bank. Don't play the game that maximizes their return. That happens when you have a loan of maximum size, high interest rate, and struggle to make payments, end up missing a couple and paying late fees, or request forbearance which compounds the interest. Play to minimize risk. |
Why does a stock's price fluctuate so often, even when fresh news isn't available? | Investors are "forever" comparing the prices of stocks to other stocks. As others have pointed out, this is done faster and more frequently nowadays with high-speed computer programs. There may be no "fresh" news on stock A, but if there is fresh news on stock B (as there usually is), the news on B affects the COMPARISON with stock A. That could be what causes trading in stock A that has "no news." |
Physical Checks - Mailing | Lets say you owed me $123.00 an wanted to mail me a check. I would then take the check from my mailbox an either take it to my bank, or scan it and deposit it via their electronic interface. Prior to you mailing it you would have no idea which bank I would use, or what my account number is. In fact I could have multiple bank accounts, so I could decide which one to deposit it into depending on what I wanted to do with the money, or which bank paid the most interest, or by coin flip. Now once the check is deposited my bank would then "stamp" the check with their name, their routing number, the date, an my account number. Eventually an image of the canceled check would then end up back at your bank. Which they would either send to you, or make available to you via their banking website. You don't mail it to my bank. You mail it to my home, or my business, or wherever I tell you to mail it. Some business give you the address of another location, where either a 3rd party processes all their checks, or a central location where all the money for multiple branches are processed. If you do owe a company they will generally ask that in the memo section in the lower left corner that you include your customer number. This is to make sure that if they have multiple Juans the money is accounted correctly. In all my dealings will paying bills and mailing checks I have never been asked to send a check directly to the bank. If they want you to do exactly as you describe, they should provide you with a form or other instructions. |
Uni-Select (UNS.TO) Market Cap Incorrect? | Note that your link shows the shares as of March 31, 2016 while http://uniselect.com/content/files/Press-release/Press-Release-Q1-2016-Final.pdf notes a 2-for-1 stock split so thus you have to double the shares to get the proper number is what you are missing. The stock split occurred in May and thus is after the deadline that you quoted. |
Is real (physical) money traded during online trading? | This is somewhat of a non-answer but I'm not sure you'll ever find a satisfying answer to this question, because the premises on which the question is based on are flawed. Money itself does not "exist physically," at least not in the same sense that a product you buy does. It simply does not make sense to say that you "physically own money." You can build a product out of atoms, but you cannot build a money out of atoms. If you could, then you could print your own money. Actually, you can try to print your own money, but nobody would knowingly accept it and thus is it functionally nonequivalent to real money. The paper has no intrinsic value. Its value is derived from the fact that other people perceive it as valuable and nowhere else. Ergo paper money is no different than electronic money. It is for this reason that, if I were you, I would be okay with online Forex trading. |
Need small buisness ideas with 100k $ budjet in a 3rd world country | Firstly, I highly doubt anyone on this site will be able to provide you with accurate input on this matter regarding what TO DO. It's the what not to do that may be possible. That said, if you want to offer equipment for rent, which in a developing country is probably a decent idea, I'd start by asking around and doing some research on what people really need and are wanting to rent. I would suggest studying other developing/developed countries histories to see what companies were successful around a similar stage as well. I'd start small: pressure washers, generators, concrete mixers, fork lifts, hydraulic ladders, etc. Getting things that are just a bit too expensive for someone to own and something they don't need all the time. These can be great revenue generators because they're cheap to purchase, but can be rented at a premium. |
What should I do with my money? | If you are in an economy which has a decent liquid debt market (corporate bonds, etc.), then you may look into investing in AA or AA+ rated bonds. They can provide higher returns than bank deposits and are virtually risk-free. (Though in severe economic downturns, you can see defaults in even very high-rated bonds, leading to partial or complete loss of value however, this is statistically quite rare). You can make this investment through a debt mutual fund but please make sure that you read through the offer document carefully to understand the investment style of the mutual fund and their expense ratio (which directly affect your returns). In any case, it is always recommended to reach out to an investment adviser who is good with local tax laws to minimize taxes and maximize returns. |
Will credit card payment from abroad be suspicious as taxable income? | US bank deposits over $10K only need to be reported to FinCEN (Financial Crimes Enforcement Network- a bureau of the US Department of Treasury) if the deposits are made in cash or other money instruments where the source cannot be traced (money orders, traveler checks, etc). Regular checks and wires don't need to be reported because there is a clear bank trail of where the money came from. If your family member is giving you money personally (not from a business) from a bank account which is outside of the US, then you only need to report it if the amount is over $100K. Note, you would need to report that regardless of whether the money was deposited into your US bank account, or paid directly to your credit cards on your behalf, and there are stiff penalties if you play games to try to avoid reporting requirements. Neither deposit method would trigger any taxable income for the scenario you described. |
How are stock buybacks not considered insider trading? | The reason that stock buybacks are not considered insider trading is because the offers are open to all on equal terms to everyone outside the company. Even if the company knows "inside" information, it's not supposed to tell it (and company executives are not allowed to tender shares, unless they had previously set up a "blind" selling program on a"schedule.") If that's actually the case, no one investor is better informed than another, and hence there is no insider trading. The issue of inside trading is that "insiders" ARE better informed. |
What is the difference between hedging and diversification? How does each reduce risk? | Hedging - You have an investment and are worried that the price might drop in the near future. You don't want to sell as this will realise a capital gain for which you may have to pay capital gains tax. So instead you make an investment in another instrument (sometimes called insurance) to offset falls in your investment. An example may be that you own shares in XYZ. You feel the price has risen sharply over the last month and is due for a steep fall. So you buy some put option over XYZ. You pay a small premium and if the price of XYZ falls you will lose money on the shares but will make money on the put option, thus limiting your losses. If the price continues to go up you will only lose the premium you paid for the option (very similar to an insurance policy). Diversification - This is when you may have say $100,000 to invest and spread your investments over a portfolio of shares, some units in a property fund and some bonds. So you are spreading your risks and returns over a range of products. The idea is if one stock or one sector goes down, you will not lose a large portion of your investment, as it is unlikely that all the different sectors will all go down at the same time. |
Car finance (loan) insurance requirements (store car) | Okay, definitive answer for this particular company (Toyota Finance) is (somewhat surprisingly, and glad I asked) it must be fully insured at all times, including liability, even if being stored. I asked at a dealership and they answered "just fire and theft (of course)" but I ended up calling their finance department and the answer was the opposite. So there you go. Thanks for the answers (and for trying to talk me out of wasting money). |
Received mysterious K-1 form, seeking answers | You should contact the company and the broker about the ownership. Do you remember ever selling your position? When you look back at your tax returns/1099-B forms - can you identify the sale? It should have been reported to you, and you should have reported it to the IRS. If not - then you're probably still the owner. As to K-1 - the income reported doesn't have to be distributed to you. Partnership is a pass-through entity, and cannot "accumulate" earnings for tax purposes, everything is deemed distributed. If, however, it is not actually distributed - you're still taxed on the income, but it is added to your basis in the partnership and you get the tax "back" when you sell your position. However, you pay income tax on the income based on the kind of the income, and on the sale - at capital gains rates. So the amounts added to your position will reduce your capital gains tax, but may be taxed at ordinary rates. Get a professional advice on the issue and what to do next, talk to a EA/CPA licensed in New York. |
When does giving a gift “count” for tax year? | Generally it goes by when they receive the check, not when they cash the check. Though if the check was received prior to midnight on December 31st, but after the bank closes, they would probably let the tax payer decide to count it for the next year. Of course if the check is from person A to person B then the only issue is gift tax, or annual limit calculations. If it is company to person then income tax could be involved. The IRS calls this Constructive receipt Income Under the cash method, include in your gross income all items of income you actually or constructively receive during your tax year. If you receive property or services, you must include their fair market value in income. Example. On December 30, 2011, Mrs. Sycamore sent you a check for interior decorating services you provided to her. You received the check on January 2, 2012. You must include the amount of the check in income for 2012. Constructive receipt. You have constructive receipt of income when an amount is credited to your account or made available to you without restriction. You do not need to have possession of it. If you authorize someone to be your agent and receive income for you, you are treated as having received it when your agent received it. Example. Interest is credited to your bank account in December 2012. You do not withdraw it or enter it into your passbook until 2013. You must include it in your gross income for 2012. Delaying receipt of income. You cannot hold checks or postpone taking possession of similar property from one tax year to another to avoid paying tax on the income. You must report the income in the year the property is received or made available to you without restriction. Example. Frances Jones, a service contractor, was entitled to receive a $10,000 payment on a contract in December 2012. She was told in December that her payment was available. At her request, she was not paid until January 2013. She must include this payment in her 2012 income because it was constructively received in 2012. Checks. Receipt of a valid check by the end of the tax year is constructive receipt of income in that year, even if you cannot cash or deposit the check until the following year. Example. Dr. Redd received a check for $500 on December 31, 2012, from a patient. She could not deposit the check in her business account until January 2, 2013. She must include this fee in her income for 2012. In general it is best not to cut it close. If the check is to be counted as an January event it is best to send it in January. If it is to be December event it is best to send it early enough to be able to say with confidence that the check arrived at the destination before the end of the year. |
How to check the paypal's current exchange rate? | Whenever you pay or withdraw some fund from your account, paypal takes approx 3% of the current currency value along with the fees. i.e. If you are paying/withdraw 100 unit of US Dollars to British pounds and if the current convertion rate is 1$=0.82GBP, then consider reducing 3% of the actual currency rate. So, the approximate magnitude will be 0.82*97% (100-3=97) = 0.7954. So, 1$=0.7954GBP. This formula will not give you 100% accurate value but will help of course. Captain |
Taxation from variations in currency | Here is the technical guidance from the accounting standard FRS 23 (IAS 21) 'The Effects of Changes in Foreign Exchange Rates' which states: Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognised in profit or loss in the period in which they arise. An example: You agree to sell a product for $100 to a customer at a certain date. You would record the sale of this product on that date at $100, converted at the current FX rate (lets say £1:$1 for ease) in your profit loss account as £100. The customer then pays you several $100 days later, at which point the FX rate has fallen to £0.5:$1 and you only receive £50. You would then have a realised loss of £50 due to exchange differences, and this is charged to your profit and loss account as a cost. Due to double entry bookkeeping the profit/loss on the FX difference is needed to balance the journals of the transaction. I think there is a little confusion as to what constitutes a (realised) profit/loss on exchange difference. In the example in your question, you are not making any loss when you convert the bitcoins to dollars, as there is no difference in the exchange rate between the point you convert them. Therefore you have not made either a profit or a loss. In terms of how this effects your tax position; you only pay tax on your profit and loss account. The example I give above is an instance where an exchange difference is recorded to the P&L. In your example, the value of your cash held is reflected in your balance sheet, as an asset, whatever its value is at the balance sheet date. Unfortunately, the value of the asset can rise/fall, but the only time where you will record a profit/loss on this (and therefore have an impact on tax) is if you sell the asset. |
I'm currently unemployed and have been offered a contract position. Do I need to incorporate myself? How do I do it? | I know this is a little late but here is my answer. No. You do not "need" to incorporate. In fact, incorporating in your situation will cost you in legal fees, administrative headaches, and a fair bit in taxes. The CRA would probably look at your corporation as a personal services corporation and it would not be allowed to claim a number of tax reductions. The tax rate would end up being over the top range (unless you are in Quebec where it would be just under the top marginal range). |
Paid credit card bill, but money didn't leave my checking account [duplicate] | This is normal for credit cards. As long as you make the credit card company's cutoff time, they will make the funds available on your credit card rather than make you wait for them to actually get the funds from your bank. The amount of time this takes actually can vary significantly from bank to bank. You do want to make sure funds are available in your bank account for them to withdraw when they do take them though. If not, the payment would get returned and can set red flags on your credit card account that take a while to drop off. |
Do I need a business credit card? | It can certainly help build a credit score, but remember that businesses gain credit differently from individuals. Depending on the country, there isn't usually a national register of business credit ratings the way there is for individuals. The credit record you'd be gaining is with your own bank only. Banks will usually base your business credit record on revenue and transactional loads rather than merely on having and holding a credit card. That said, it isn't always that easy to get a business credit card and so it is a useful thing to have for credibility with clients (depending on the type of work you do). A credit card can also sometimes work out cheaper (and faster) for financing small overdrafts than a regular business overdraft facility. That said, I've found that larger loans over a five-year term can work out much cheaper for an established business than they would for an individual, even where the business itself has no history of using credit. |
Should I pay half a large balance this month before I get my CC statement? | From what I have heard on Clark Howard if you pay your balance off before the statement's closing date it will help your utilization score. He has had callers confirm this but I don't have first hand knowledge for this to be true. Also this will take two months to make the difference. So it will be boarder line if you will get the benefit in time. Sign up for credit karma if you like. You can get suggestions on how to help your score. |
Is Mint allowed to share user data with other Intuit entities? | I wound up asking Mint over email so I'll share the answer I received: Thank you for contacting Mint.com. From my understand you want to know if Mint can transfer data to other Intuit products and vice versa. Let me address your concern based from what I can see on my tools. Upon confirming, while Mint and other Intuit products are under the same company, Mint.com is not yet integrated to other Intuit products. We’d like to thank you though for giving the idea to us. With this, we would know which future enhancements will our customers appreciate. We have forwarded your request/suggestion to our Product and Development team for their review. At this time though, we can't make any guarantee that your request/suggestion will get implemented as we must balance customer demand with resources and business objectives. Oops... |
What taxes are assessed on distributions of an inherited IRA? | Distributions from an inherited IRA will be taxed as ordinary income and there are required minimum distributions for the inherited account. Assuming you were 55 at the time of your mother's death, your life expectancy according to the IRS is 29.6 years. Your required yearly distributions on $200,000 would be roughly $6800. For each year that you didn't withdraw that, you would owe a 50% penalty of the distribution amount (~$3400). That's probably better than the tax hit you would take if you pulled it all in as income in a 5 year window (ie. all right now since you're at the end of the window). |
How to prevent myself from buying things I don't want | I use cash exclusively. I go to the cash machine once a week and withdraw the money I want to spend in one week (so I have to plan if I want to buy something expensive). Otherwise I leave the card at home. As bonus you get anonymity, i.e. big brother cannot track you. |
Changing Bank Account Number regularly to reduce fraud | We change it every so often to reduce fraud. This is idiocy. They receive regular payments. They are asking the people who pay them to regularly change where their money is being sent. This increases their exposure to fraud dramatically as each time the account is changed, there is a risk it will be changed to an account they do not control. This is a huge red flag. Confirm that this is authentic and, if so, insist that they sign an agreement accepting all liability for the risks this crazy policy causes, otherwise, you should refuse to go through the effort of confirming new accounts and risking typing or communication errors on a regular basis. This is definitely a "what were they thinking?!" kind of thing. If it's not fake entirely. (This answer assumes that you were given a correct explanation, that they change it regularly believing that will reduce fraud.) |
Source of income: from dividends vs sale of principal or security | All that it is saying is that if you withdraw money from your account it doesn't matter whether it has come from dividends or capital gains, it is still a withdrawal. Of course you can only withdraw a capital gain if you sell part of the assets. You would only do this if it was the right time for you to sell the asset. |
Should I put more money down on one property and pay it off sooner or hold on to the cash? | I would go with option B. That is safer, as it would leave you with more options, in case of an unexpected job loss or an emergency. |
Saving up for an expensive car | Any way you look at it, this is a terrible idea. Cars lose value. They are a disposable item that gets used up. The more expensive the car, the more value they lose. If you spend $100,000 on a new car, in four years it will be worth less than $50,000.* That is a lot of money to lose in four years. In addition to the loss of value, you will need to buy insurance, which, for a $100,000 car, is incredible. If your heart is set on this kind of car, you should definitely save up the cash and wait to buy the car. Do not get a loan. Here is why: Your plan has you saving $1,300 a month ($16,000 a year) for 6.5 years before you will be able to buy this car. That is a lot of money for a long range goal. If you faithfully save this money that long, and at the end of the 6.5 years you still want this car, it is your money to spend as you want. You will have had a long time to reconsider your course of action, but you will have sacrificed for a long time, and you will have the money to lose. However, you may find out a year into this process that you are spending too much money saving for this car, and reconsider. If, instead, you take out a loan for this car, then by the time you decide the car was too much of a stretch financially, it will be too late. You will be upside down on the loan, and it will cost you thousands to sell the car. So go ahead and start saving. If you haven't given up before you reach your goal, you may find that in 6.5 years when it is time to write that check, you will look back at the sacrifices you have made and decide that you don't want to simply blow that money on a car. Consider a different goal. If you invest this $1300 a month and achieve 8% growth, you will be a millionaire in 23 years. * You don't need to take my word for it. Look at the car you are interested in, go to kbb.com, select the 2012 version of the car, and look up the private sale value. You'll most likely see a price that is about half of what a new one costs. |
Why do 10 year-old luxury cars lose so much value? | +1 They are over priced to begin with - More specifically they are expensive to create exclusivity, which raises their value to people who value that kind of thing. Perhaps folks who buy those cars aren't buying them for value or quality or performance, but are buying them for the badge and the intangible factors. I frequently hear about rich people who earned their millions driving around in cars Consumer Reports rank highly, so it isn't because they are so much better than a mid priced car. A car for $140,000 is either equipped for the A-Team or is a status symbol. The status symbol notion is very expensive, but fades very quickly, hence the mighty depreciation. |
What's the most conservative split of financial assets for my portfolio in today's market? | Before investing, absolutely follow the advice in mbhunter's answer. There is no safe investment (unless you count your mattress, and even there you could find moths, theives, or simple inflation taking a chunk out of your change). There is only maximizing your reward for a given level of risk - and there is always risk. This question should be enshrined somewhere on the Q&A site for its comprehensive list of sources for information on asset allocation. The tag is also going to have tons of good information for you. To answer your question on what slice of the pie is devoted to what, you can check out some common portfolios given by U. S. experts for U. S. investors - these should be convertible into Australian funds. Another portfolio that is, like all those above, loosely based on Modern Portfolio Theory for maximizing reward for a given level of risk is the Gone Fishin' Portfolio. A common denominator amongst these portfolios is that they emphasize index funds over mutual funds for their long-term performance and preference lazy management (yearly rebalancing is a common suggestion as the maximum level of involvement) over active management. You can see more Lazy Portfolios. |
Website for managing personal cash inflow and outflow, applicable to India? | You might like https://planwise.com/index.htm |
Price difference among shares in Hong Kong and Shang Hai | Wikipedia talks about the Chinese currency: Scholarly studies suggest that the yuan is undervalued on the basis of purchasing power parity analysis. so despite it appearing cheaper due to the official exchange rate, the price in China might actually be fair. There are also restrictions on foreign exchange (purportedly "to prevent inflows of hot money"), which, in concert with any other legal obstacles to owning or trading on the Chinese exchange, may also explain why the high-frequency traders aren't tripping over each other to arbitrage away the difference. |
Shorting stocks: Indicators that a stock will drop? | The Art of Short Selling by Kathryn Stanley providers for many case studies about what kind of opportunities to look for from a fundamental analysis perspective. Typically things you can look for are financing terms that are not very favorable (expensive interest payments) as well as other constrictions on cash flow, arbitrary decisions by management (poor management), and dilution that doesn't make sense (usually another product of poor management). From a quantitative analysis perspective, you can gain insight by looking at the credit default swap rate history, if the company is listed in that market. The things that affect a CDS spread are different than what immediately affects share prices. Some market participants trade DOOMs over Credit Default Swaps, when they are betting on a company's insolvency. But looking at large trades in the options market isn't indicative of anything on its own, but you can use that information to help confirm your opinion. You can certainly jump on a trend using bad headlines, but typically by the time it is headline news, the majority of the downward move in the share price has already happened, or the stock opened lower because the news came outside of market hours. You have to factor in the short interest of the company, if the short interest is high then it will be very easy to squeeze the shorts resulting in a rally of share prices, the opposite of what you want. A short squeeze doesn't change the fundamental or quantitative reasons you wanted to short. The technical analysis should only be used to help you decide your entry and exit price ranges amongst an otherwise random walk. The technical rules you created sound like something a very basic program or stock screener might be able to follow, but it doesn't tell you anything, you will have to do research in the company's public filings yourself. |
online personal finance software that I can host myself | You can use www.mint.com for most of your requirements. It works great for me, it's free and I'd say is secure. Hosting that kind of service just for your will be time-consuming and not necessarily more secure than most of the stuff that is readily available out there. Good luck. |
What are the reasons to get more than one credit card? | I got a Capital One credit card because they don't charge a fee for transactions in foreign currencies. So I only use it when I travel abroad. At home, I use 3 different credit cards, each offering different types of rewards (cash back on gas, movies, restaurants, online shopping etc). |
Online transaction - Money taken out late | Debit Cards have a certain processing delay, "lag time", before the transaction from the vendor completes with your bank. In the US it's typically 3 business days but I have seen even a 15 day lag from Panera Bread. I guess in the UK, payment processors have similar processing delays. A business is not obliged to run its payment processing in realtime, as that's very expensive. Whatever be the lag time, your bank is supposed to cover the payment you promised through your card. Now if you don't have agreements in place (for example, overdraft) with your bank, they will likely have to turn down payments that exceed your available balance. Here is the raw deal: In the end, the responsibility to ensure that your available balance is enough is upon you (and whether you have agreements in place to handle such situations) So what happened is very much legal, a business is not obliged to run its payment processing in realtime and no ethics are at stake. To ensure such things do not happen to me, I used to use a sub-account from which my debit card used to get paid. I have since moved to credit cards as the hassle of not overdrawing was too much (and overdraft fees from banks in the US are disastrous, especially for people who actually need such a facility) |
What are the implications of a corporate stock repurchase or share buyback program? | Ignoring taxes, a share repurchase has exactly the same effect on the company and the shareholders' wealth as a cash dividend. In either case, the company is disbursing cash to its shareholders; in the former, in exchange for shares which shareholders happen to be selling on the market at the time; in the latter, equally to all shareholders. For those shareholders who do not happen to be selling their shares, a share repurchase by a company is equivalent to a shareholder's reinvestment of a cash dividend in additional shares of the same company. The only difference is the total number of shares left outstanding. Your shares after a share buyback represent ownership of a greater fraction of the company, since in effect the company is buying out other shareholders on your behalf. Theoretically, a share buyback leaves the price of the stock unchanged, whereas a cash dividend tends to reduce the price of the stock by exactly the amount of the dividend, (notwithstanding underlying earnings.) This is because a share buyback concentrates your ownership in the company, but at the same time, the company as a whole is devalued by the exact amount of cash disbursed to buy back shares. Taxwise, a share buyback generally allows you to treat your share of the company's profits as capital gains---and quite possibly defer taxes on it as long as you own the stock. You usually have to pay taxes on dividends at the time they are paid. However, dividends are sometimes seen as instilling discipline in management, because it's a very public and obvious sign of distress for a company to cut its dividend, whereas a share repurchase plan can often be quietly withdrawn without drawing that much attention. A third alternative to a dividend or a share repurchase is for the company to find profitable projects to reinvest its earnings in, and attempt to grow the company as a whole (in the hopes of even greater earnings in the future) rather than distribute current earnings back to shareholders. (A company may alse use its earnings to pay down or repurchase debt, as well.) As to your second question, the SEC has certain rules that regulate the timing and price of share repurchases on the open market. |
Are lottery tickets ever a wise investment provided the jackpot is large enough? | If you just buy a few lotto tickets normally, then no, it's not going to be a good investment, as @Jasper has shown. However, there are certain scenarios where you can get a positive expected value from a lottery. In 2012, it was revealed that some MIT students found a scheme to game the Massachusetts state lottery. The game, called Cash WinFall, had a quirk in the rules: the jackpot prize was capped at $2 million. Any money in the jackpot beyond $2 million would increase the payout of the consolation prizes. Thus, the game would sometimes have a positive expected value. The return on investment was 15% to 20% — enough for the participants to quit their jobs. This specific loophole is no longer available: a cap was placed on the number of tickets sold per store, then the game was discontinued altogether. Another possible strategy is to buy enough tickets to nearly assure a win, as one investment group did in 1992. Given a large enough jackpot, this strategy can yield a positive expected value, but not a guaranteed profit. Caveats include: Or, you might be a genius and exploit a flaw in the lottery's pseudorandom number generator, as one statistician did in an Ontario scratch-off lottery in 2011. |
Escrow Removal Fee? | Assume they do not overwithhold. You pay in $500/mo, and every time it hits $3000, they pay the tax. Engineers call this a sawtooth function, it looks like this. The average balance is not $3000, but close to $1500. The very simple math is $1500 * rate * years. It looks like your equation except it's not 58, it's just the years. And the question is whether you can make more than $850 on $1500 average before you sell. I wouldn't be so quick to plug in 29 years, as the average home ownership is 7 years, and depending, who knows if a refinance is in your future? The bottom line - How long would it take you to get a 57% return (2350/1500)? Ironically, the most responsible (and risk averse) person would say "decades. Banks offer less than 1%." even an 8% market return, while not guaranteed, is close to 7 years. But, if you carry 18% credit card debt, you can pay it down a bit each month and let it float back up every 6 months. Less than 4 years to break even. |
Any difficulties in doing deceased relative's taxes? | There are two different tax returns you'll be doing: one is for her, until the day of her death. The other is for the estate. The personal one you could probably do on your own, it's nothing different from the one for a living person, except for the cut-off date in the middle of the year. The estate tax return may be a bit more nuanced, since it is a trust return and not an individual return, and is done under a different set of rules. I'd suggest talking to a tax professional who'd help you. Your estate executioner should be doing the estate tax return (or hiring someone to do it). Sorry for your loss. |
Why do employers require you to spread your 401(k) contributions throughout the year to get the maximum match? | There's no such requirement in general. If your particular employer requires that - you should address the question to the HR/payroll department. From my experience, matches are generally not conditioned on when you contribute, only how much. |
How can I find a high-risk, high-reward investment that is not strongly correlated with the U.S. economy? | High risk, high reward doesn't really mean anything. The reason that investments are risky is that the investor is clueless. As you gain more information and experience, you reduce the risk. To answer your question, you can consider BRIC ETF's (Brazil, Russia, India and China). They are correlated to the U.S. economy. However, over the long term (say, 40 years), they may make sense. It depends on your outlook. Do you think India and China will have bigger economies in than the U.S. in 40 years? Many people do. Do you think that countries that are rich in commodity resources like oil will do well in the next 5 years? If so, then those countries may do better than the U.S. It's not a clear answer to your question, but maybe it can help lead to a good solution for you. |
Unemployment Insurance Through Options | This is a snapshot of the Jan '17 puts for XBI, the biotech index. The current price is $65.73. You can see that even the puts far out of the money are costly. The $40 put, if you get a fill at $3, means a 10X return if the index drops to $10. A 70X return for a mild, cyclic, drop isn't likely to happen. Sharing youtube links is an awful way to ask a question. The first was far too long to waste my time. The second was a reasonable 5 minutes, but with no example, only vague references to using puts to protect you in bad years. Proper asset allocation is more appropriate for the typical investor than any intricate option-based hedging strategy. I've successfully used option strategies on the up side, multiplying the returns on rising stocks, but have never been comfortable creating a series of puts to hit the jackpot in an awful year. |
Why buy insurance? | The odds could very well be in your favor, even when the insurance company expects profit. What matters to you is not the expected amount of money you'll have, but the expected amount of utility you'll get from it: getting enough money to buy food to eat is much more important than getting enough money to be able to buy that fiction book too. The more money you have, the less a dollar is worth to you: consequently, if you have enough money, it's worth spending some to prevent yourself from getting into a situation where you don't have enough money. |
Who can truly afford luxury cars? | Partly I suspect this is selection bias. You say you see so many luxury cars go by. But if you're looking for them, you're going to notice them. Have you calculated the actual percentage? Do they make up 50% of the cars that pass a specific point in a specific period of time? Or just 10% if you really counted? You say you live in Baltimore county, Maryland. That's a relatively wealthy area, so I'd expect the percentage of luxury cars to be higher than the national average. You'd likely see considerably fewer in the backwoods of Mississippi. That said, some people who own luxury cars can't really afford them. I'm reminded of a wonderful TV commercial I saw recently where a man is showing off all his material goods, he talks about his big house, and his swimming pool, and his fancy car, with a big smile on his face, standing tall, and generally looking proud and happy. And then he says, "How do I do it?" And suddenly his expression changes to complete despair, he slumps down, and says, "I'm in debt up to my eyeballs." It turns out to be a commercial for a debt-counseling service. Some people put very high value on owning a fancy car and are willing to sacrifice on other things. If having a big fancy car is more important to you then, say, having a nice house or the latest computer or a big screen TV or dining out more often or going on more expensive vacations or whatever you have to give up to get the car, well, that's your decision. Personally I don't care much about a fancy car, I just want something that gets me where I want to go. And I've always figured that with an expensive car, you have to constantly worry about getting in an accident and damaging or destroying it. If you put your money into a big fancy house, at least houses rarely collide with each other. Personally, I make a nice income too. And I have a $500/month mortgage and zero car payment because I drive a 2003 pickup that I bought with cash. But I have two kids in college and I'm trying to get them through with no debt, that's where all my money is going. |
Why do investors buy stock that had appreciated? | You seem to prefer to trade like I do: "Buy low, sell high." But there are some people that prefer a different way: "Buy high, sell higher." A stock that has "just appreciated" is "in motion." That is a "promise" (not always kept) that it will continue to go higher. Some people want stocks that not only go higher, but also SOON. The disadvantage of "buy low, sell high" is that the stock can stay low for some time. So that's a strategy for patient investors like you and me. |
Recommendation for learning fundamental analysis? | The Bible of fundamental analysis was written by Graham and Dodd, and is titled Security Analysis. If you don't know the name Benjamin Graham, Warren Buffet was his student and attribute his own success to Graham. If Security Analysis is a bit too intense for you, Graham also wrote The Intelligent Investor which is probably a better starting point. |
Does an employee have the right to pay the federal and state taxes themselves instead of having employer doing it? | No. An employer is legally obliged to deduct taxes from your pay cheque and send them to the IRS. The only way round that is to either provide evidence of deductions that would reduce your tax bill to nothing, or to become self-employed. |
Treatment of donations of appreciated stock to a IRC §501(c)(7) Social Club? | If cash donations are not deductable, stock contributions aren't either and I believe the same rules apply as for a private party. |
Using Euros to buy and sell NASDAQ stocks | You can check whether the company whose stock you want to buy is present on an european market. For instance this is the case for Apple at Frankfurt. |
Saving for retirement without employer sponsored plan | You might consider working on getting your new employer to sponsor a 401k, there may be options where you can invest and they aren't required to add anything as a match (which gives you higher limits). If they don't match, they may just be liable for some administration fees. If you have any side business that you do, you might also be eligible for other "self-employed" options that have higher limits (SEP, Simple - I think they may go up to $15k) although, I'm not sure the nitty gritties of them. |
Why is the price of my investment only updated once per day? | I strongly suggest you go to www.investor.gov as it has excellent information regarding these types of questions. A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates. When you buy shares of a mutual fund you're buying it at NAV, or net asset value. The NAV is the value of the fund’s assets minus its liabilities. SEC rules require funds to calculate the NAV at least once daily. Different funds may own thousands of different stocks. In order to calculate the NAV, the fund company must value every security it owns. Since each security's valuation is changing throughout the day it's difficult to determine the valuation of the mutual fund except for when the market is closed. Once the market has closed (4pm eastern) and securities are no longer trading, the company must get accurate valuations for every security and perform the valuation calculations and distribute the results to the pricing vendors. This has to be done by 6pm eastern. This is a difficult and, more importantly, a time consuming process to get it done right once per day. Having worked for several fund companies I can tell you there are many days where companies are getting this done at the very last minute. When you place a buy or sell order for a mutual fund it doesn't matter what time you placed it as long as you entered it before 4pm ET. Cutoff times may be earlier depending on who you're placing the order with. If companies had to price their funds more frequently, they would undoubtedly raise their fees. |
Why does capital gains tax apply to long term stock holdings? | In Australia we have a 50% capital gain discount if you hold the asset for more than 12 months, whether it is in shares, property or other assets. The main reason is to encourage people to invest long-term instead of speculating or trading. The government sees speculation or short term trading as more risky than long term investing for the everyday mum and dad investor, so rewards people it sees taking the lower risk long term view. In my opinion, long term investing, short term trading and speculation can all be risky for someone who is unedutated in the financial markets, and the first rule of investing should be to consider the asset itself and not the tax implications. |
I received a share of Apple stock. Now what? | Congratulations! You own a (very small) slice of Apple. As a stockholder, you have a vote on important decisions that the company makes. Each year Apple has a stockholder meeting in Cupertino that you are invited to. If you are unable to attend and vote, you can vote by proxy, which simply means that you register your vote before the meeting. You just missed this year's meeting, which was held on February 26, 2016. They elected people to the board of directors, chose an accounting firm, and voted on some other proposals. Votes are based on the number of shares you own; since you only own one share, your vote is very small compared to some of the other stockholders. Besides voting, you are entitled to receive profit from the company, if the company chooses to pay this out in the form of dividends. Apple's dividend for the last several quarters has been $0.52 per share, which means that you will likely receive 4 small checks from Apple each year. The value of the share of stock that you have changes daily. Today, it is worth about $100. You can sell this stock whenever you like; however, since you have a paper certificate, in order to sell this stock on the stock market, you would need to give your certificate to a stock broker before they can sell it for you. The broker will charge a fee to sell it for you. Apple has a website for stockholders at investor.apple.com with some more information about owning Apple stock. One of the things you'll find here is information on how to update your contact information, which you will want to do if you move, so that Apple can continue to send you your proxy materials and dividend checks. |
Can I actually get a share of stock issued with a piece of paper anymore? | Yes you can. One additional "advantage" of getting the physical certificate is you can use it to transfer your account from one brokerage to another. You get the certificates in the mail and then just send them to the new broker. Why anyone would want to go through this extra work (and usually added expense) rather than a direct transfer is beyond me but it is one additional "advantage" of physical certificates. |
How does delta of an option change with time if underlying price is constant? | As the option approaches expiry, the delta will approach zero or one, depending on whether you're in or out of the money. This might be easiest to conceptualise if you look at the option value as a function of the stock price, and then realise that the delta is the slope of that curve. Now, as we get closer to expiry, time value fades away, and we get closer and closer to the intrinsic value, which looks like this hockey stick: __/ As you see, close to expiry, if you're out of the money, you have nothing (with delta zero), while if you're in the money, you have a forward (with delta one). |
Automatic investments for cheap | If you are not worried about timing the market and want to buy primarily "blue chip" stocks to hold for a while, consider using Loyal3. They don't charge any commission. The downside is that trades are executed at the end of the day and there's only about 60 companies currently available (but there are some really good ones currently available). |
Small investing for spending money? | Congrats on saving the money but unfortunately, you're looking for a 24% annual rate of return and that's not "reasonable" to expect. $200 per month, is $2,400 per year. $2,400/$10,000 is 24%. In a 1% savings account with spending of $200 per month spending you'll have about $7,882 at the end of the year. You'll earn about $90 of interest over the course of the year. I'm sure other people will have more specific opinions about the best way to deploy that money. I'd open a brokerage account (not an IRA, just a regular plain vanilla brokerage account), break off $5,000 and put it in to a low fee no commission S&P index fund; which CAN lose value. Put the rest in a savings account/checking account and just spend wisely. |
Market index analysis and techniques | Volume and prices are affected together by how folks feel about the stock; there is no direct relationship between them. There are no simple analysis techniques that work. Some would argue strongly that there are few complex analysis techniques that work either, and that for anyone but full-time professionals. And there isn't clear evidence that the full-time professionals do sufficiently better than index funds to justify their fees. For most folks, the best bet is to diversify, using low-overhead index funds, and simply ride with the market rather than trying to beat it. |
What exactly is BATS Chi-X Europe? | Yes, it would be incorrect to refer to BATS Chi-X Europe as a market maker. Market makers make markets on BATS Chi-X Europe, which is a stock exchange. |
Schedule C: where to deduct service fees on income? | Putting them on line 10 is best suited for your situation. According to Quickbooks: Commissions and Fees (Line 10) Commissions/fees paid to nonemployees to generate revenue (e.g. agent fees). It seems like this website you are using falls under the term "nonemployees". |
Why is tax being paid on my salary multiple times? | Businesses do not pay income tax on money that they pay out as salary to their employees. Businesses generally only pay income tax on profit. Profit is the money that comes in (revenue) minus the business expenses. Payroll to the employees is a deductible business expense. |
Is Real Estate ever a BAD investment? If so, when? | Real estate is always an interesting dynamic. In most cases prices have always gone up. Price is mainly a function of demand. Sometimes demand is artificially inflated over a short term period and can come down quickly due to corrections. During recessions the housing market will usually slow down. There are some rare instances where certain areas never recover (see Subprime Mortgage Crisis Savings & Loans Crisis where scores of unwanted properties exist). Things to consider: |
Would it make sense to buy a rental property as an LLC and not in my own name? | I'd have a good look at how much anonymity an LLC offers in your state - as far as I'm aware this varies from state to state. Out here in NV an LLC owner's privacy is supposedly fairly well protected, but in other states, not quite as much. Also keep in mind that while the LLC offers some protection (and I'm a big advocate of this sort of structure if you're taking larger risks that might have a big impact on your overall personal finances), this might not apply to financing. A lot of banks tend to require an LLC's owner to guarantee loans to an LLC once they go over a certain amount or even in general. Do some research in this area because the LLC would be worth less as a protective shield to you if you're on the hook for the full amount of the loans anyway. |
How do you calculate the rate of return (ROR) when buying and selling put options? | Rate of return is (Current value - initial value) divided by initial value. Buy $10,000 worth of put options and sell them for $15,000, and your rate of return is 0.5, or 50%. |
FATCA compliance for small Foreign Company. What do I need to do? | Unless you started a bank or other kind of a financial institution (brokerage, merchant processor, etc etc), the page you linked to is irrelevant. That said, there's enough in the US tax code for you to reconsider your decision of not living in the US, or at least of being a shareholder of a foreign company. Your compliance costs are going to go through the roof. If you haven't broken any US tax laws yet (which is very unlikely), you may renounce your citizenship and save yourself a lot of money and trouble. But in the more likely case of you already being a criminal with regards the US tax law, you should probably get a proper tax advice from a US-licensed CPA/EA who's also proficient in the Japanese-American tax treaty and expats' compliance issues resolution. |
What is the process through which a cash stock transaction clears? | This is the sad state of US stock markets and Regulation T. Yes, while options have cleared & settled for t+1 (trade +1 day) for years and now actually clear "instantly" on some exchanges, stocks still clear & settle in t+3. There really is no excuse for it. If you are in a margin account, regulations permit the trading of unsettled funds without affecting margin requirements, so your funds in effect are available immediately after trading but aren't considered margin loans. Some strict brokers will even restrict the amount of uncleared margin funds you can trade with (Scottrade used to be hyper safe and was the only online discount broker that did this years ago); others will allow you to withdraw a large percentage of your funds immediately (I think E*Trade lets you withdraw up to 90% of unsettled funds immediately). If you are in a cash account, you are authorized to buy with unsettled funds, but you can't sell purchases made on unsettled funds until such funds clear, or you'll be barred for 90 days from trading as your letter threatened; besides, most brokers don't allow this. You certainly aren't allowed to withdraw unsettled funds (by your broker) in such an account as it would technically constitute a loan for which you aren't even liable since you've agreed to no loan contract, a margin agreement. I can't be sure if that actually violates Reg T, but when I am, I'll edit. While it is true that all marketable options are cleared through one central entity, the Options Clearing Corporation, with stocks, clearing & settling still occurs between brokers, netting their transactions between each other electronically. All financial products could clear & settle immediately imo, and I'd rather not start a firestorm by giving my opinion why not. Don't even get me started on the bond market... As to the actual process, it's called "clearing & settling". The general process (which can generally be applied to all financial instruments from cash deposits to derivatives trading) is: The reason why all of the old financial companies were grouped on Wall St. is because they'd have runners physically carting all of the certificates from building to building. Then, they discovered netting so slowed down the process to balance the accounts and only cart the net amounts of certificates they owed each other. This is how we get the term "bankers hours" where financial firms would close to the public early to account for the days trading. While this is all really done instantly behind your back at your broker, they've conveniently kept the short hours. |
How much power does a CEO have over a public company? | The shareholders elect the board of directors who in turn appoint a CEO. The CEO is responsible for the overall running of the company. To answer your specific questions: Yes, Steve Jobs could make decisions that are harmful to the well-being of the company. However, it's the responsibility of the board of directors to keep his decisions and behavior in check. They will remove him from his position if they feel he could be a danger to the company. |
Trading large volumes with penny profits per share | Currently my online savings account pays an interest rate of 1.25%. With 100K, I can earn about $104 per month in that account. No risk, no timing, no fuss. So in theory you can make money by small changes in the valuations of stock. However there are often better, risk free options for your money; or, there are much better options for returns with much less risk, but more than that of a bank account. |
Why could rental costs for apartments/houses rise while buying prices can go up and down? | Average rent rates will typically rise and fall, and are market-dependent just like real estate. In the short term, a collapse in housing like the one we saw in 2008 can induce a spike in rental costs as people walk away or get foreclosed on, and move back into apartments. That then tends to self-adjust, as the people who had been in the apartments find a deal on a foreclosed house and move out. However, one thing I've seen to be near-constant in the apartment business is that a landlord will offer you a deal to get in, then increase the rent on you from year to year until you get fed up and move. This is a big reason I didn't have the same address for two years in a row until I bought my house. The landlord is basically betting that you won't want to deal with the hassle of moving, and so will pay the higher rent rate, even if, when you do the math, it makes more sense to move even to maintain the same rent rate. Eventually though, you do get fed up, look around, find the next good deal, and move, "resetting" your rent rate. I have never, not once in my life, seen or heard of any landlord offering a drop in rent as a "loyalty" move to keep you from going somewhere else. It's considered part of the game; retailers will price match, but most service providers (landlords, but also utility providers) expect a large amount of "churn" in their customer base as people shop around. It averages out. |
Do I pay a zero % loan before another to clear both loans faster? | See many past answers: you will usually save the most money by paying off the highest-intetest-rate loan first. (Remember to allow for tax effects, if any, when comparing real interest rates.) Some folks are more motivated to simplify their finances than to save money; in that case you might pay off the smallest loan first. |
First 401K portfolio with high expense ratios - which funds to pick? (24yo) | Yours two funds are redundant. Both are designed to have a mix of bonds and stocks and allow you to put all your money in them. Pick the one that has the lowest fees and stick with that (I didn't look at the funds you didn't select...they didn't look great either). Although all your funds have high fees, some are higher than others, so don't ignore fees. When you have decided on your portfolio weights, prioritize your money thus: Contribute enough to your 401(k) to get the full match from your employer Put everything else toward paying off that credit card until you have 0 balance. It's ok to use the card, but let it be little enough that you pay your statement balance off each month so you pay no interest. Then set aside some savings and invest any retirement money into a Roth IRA. At your income level your taxes are low so Roth is better than traditional IRA or 401(k). If you max out your Roth, put any other retirement savings in your 401(k). |
What to bear in mind when considering a rental home as an investment? | What are the most important facts to keep in mind as I consider this? IMHO, the most important consideration to keep in mind is - do you really want to be in the landlord business, and if so, how much experience do you have in this business? |
Should you always max out contributions to your 401k? | Rule of thumb: Invest in a tax deferred account only if your marginal tax rate is higher now than it will be in retirement. If you plan on making more taxable income in retirement than you do right now, then you should invest outside a tax deferred account. |
Long(100%)-Short(-100%) investment explanation | If you mean the percentages of long/short positions within a mutual fund or ETF, then it's a percentage of the total value of the fund portfolio. In that case, positions of 50% in X, -50% in Y are not the same as 100% in X, -100% in Y. If the long and short positions are both for the same asset, then, as D Stanley mentions, all that matters is the net position. If you're equally long and short X, then the net position is always 0%. |
Why do volatility stocks/ETFs (TVIX, VXX, UVXY) trend down in the long-term? | There is more than a single reason why TVIX loses value over time. Futures curve. VIX is always expected to trend up when under 20(although this could change in the future). This means 1 month away futures contracts are bought at a premium closer to 20. If the .VIX stayed flat at 15, by the end of the month, that contract is only worth about 15. meaning you lost 25%. This affects all VIX ETFs and makes inverse VIX ETFs attractive to hold(if you don't mind your account blowing up periodically). Leverage decay. if VIX goes down 25% two consecutive days, your x2 ETF(TVIX, UVXY) goes down 75%. Even if it doubled back to yesterday's value next day, you'd still be 25% down. ETF funding costs. The fund managers take some money from the pot every day. |
What is the minimum lot size (number of shares) for the London Stock Exchange? | 1 lot is 100 shares on London stock exchange |
What are reasons a company would want to be listed on one exchange vs. another? | Listing on NYSE has more associated overhead costs than listing on NASDAQ. In the case of young technology companies, this makes NASDAQ a more attractive option. Perhaps the most important factor is that NYSE requires that a company has an independent compensation committee and an independent nominating committee while NASDAQ requires only that executive compensation and nominating decisions are made by a majority of independent directors. No self-respecting, would-be-instant-billionare tech entreprenuer is going to want some independent committee lording it over their pay packet. Additionally, listing on NYSE requires a company have stated guidance for corporate governance while NASDAQ imposes no such requirement. Similarly, NYSE requires a company have an internal audit team while NASDAQ imposes no such requirement. Fees on NYSE are also a bit higher than NASDAQ, but the difference is not significant. A good rundown of the pros/cons: http://www.investopedia.com/ask/answers/062215/what-are-advantages-and-disadvantages-listing-nasdaq-versus-other-stock-exchanges.asp |
Is it true that Income Tax was created to finance troops for World War I? | The Income Tax was put into effect during the Civil War, but was later revoked because it was deemed "Unconstitutional". It was re-instated in 1913, just one year before World War 1. This is largely the reason why people think it was created "for the war", when it actually pre-dated World War 1. Edit: I don't have any sources, per-se. This is just what little information I remember from Grade 10 History class. I remember this because I had a real ethical problem with how the government instituted the Income Tax, since it is effectively a tax on Productivity. I find this absurd, since it motivates people to do less, in an effort to be taxed less. This in turn promotes workers doing "cash jobs" and other such things to get around it. I personally have refused a raise because it would put me into a higher tax bracket, and I wouldn't actaully see the new money. In exchange, I asked for other non-monetary perks instead. I personally think this situation should not exist. ...however, I don't have a better solution. So I suppose I can't really pass judgment. :) |
Margin when entered into a derivative contract | The most obvious use of a collateral is as a risk buffer. Just as when you borrow money to buy a house and the bank uses the house as a collateral, so when people borrow money to loan financial instruments (or as is more accurate, gain leverage) the lender keeps a percentage of that (or an equivalent instrument) as a collateral. In the event that the borrower falls short of margin requirements, brokers (in most cases) have the right to sell that collateral and mitigate the risk. Derivatives contracts, like any other financial instrument, come with their risks. And depending on their nature they may sometimes be much more riskier than their underlying instruments. For example, while a common stock's main risk comes from the movements in its price (which may itself result from many other macro/micro-economic factors), an option in that common stock faces risks from those factors plus the volatility of the stock's price. To cover this risk, lenders apply much higher haircuts when lending against these derivatives. In many cases, depending upon the notional exposure of the derivative, that actual dollar amount of the collateral may be more than the face value or the market value of the derivatives contract. Usually, this collateral is deposited not as the derivatives contract itself but rather as the underlying financial instrument (an equity in case of an option, a bond in case of a CDS, and so on). This allows the lender to offset the risk by executing a trade on that collateral itself. |
How to convert coins into paper money or deposit coins into bank account, without your bank in local? | We have machines in several grocery store chains that will take your coins, sort them, and give you two ways to get your money back: I've seen these many places, but, of course, I cannot say for sure if there are any near you. |
Using Loan to Invest - Paying Monthly Installments by Selling Originally Bought Shares | I will add one point missing from the answers by CQM and THEAO. When you take a loan and invest the proceeds, the interest that you pay on the loan is deductible on Schedule A, Line 14 of your Federal income tax return under the category of Investment Interest Expense. If the interest expense is larger than all your investment earnings (not just those from the loan proceeds), then you can deduct at most the amount of the earnings, and carry over the excess investment interest paid this year for deduction against investment earnings in future years. Also, if some of the earnings are long-term capital gains and you choose to deduct the corresponding investment interest expense, then those capital gains are taxed as ordinary income instead of at the favored LTCG rate. You also have the option of choosing to deduct only that amount of interest that offsets dividend (and short-term capital gain) income that is taxed at ordinary rates, pay tax at the LTCG rate on the capital gains, and carry over rest of the interest for deduction in future years. In previous years when the tax laws called for reduction in the Schedule A deductions for high-income earners, this investment interest expense was exempt from the reduction. Whether future tax laws will allow this exemption depends on Congress. So, this should be taken into account when dealing with the taxes issue in deciding whether to take a loan to invest in the stock market. |
Clothing Store Credit Card Account closed but not deleted | If it is closed, you should be able to trust that it is closed permanently. What you still have is the online account. Imagine this would be removed and then the account would be re-activated? That should not happen, but the way you see it, you must be afraid of that as well. What I mean to say: See these two things as completely separate. |
Does the low CAD positively or negatively impact Canadian Investors? | If you buy US stocks when the CAD is high and sell them when the CAD is lower you will make a currency gain on top of any profit or loss from the stock investments. If you buy US stocks when the CAD is low and sell when the CAD is higher any profits from gains from the stock investment will be reduced and any losses will be increased. If you are just starting out you may be better off investing in your own country to avoid any currency risk adding to your stock market risk. |
What are some tips for getting the upper hand in car price negotiations? | One point I don't see above: Consumer's Union (the nonprofit which publishes Consumer Reports) has a service where, for a small fee, they'll send you information about how much the car and each option cost the dealer, how much the dealer is getting back in incentive money from the manufacturer, and some advice about which features are worthwhile, which aren't, and which you should purchase somewhere other than the dealer. Armed with that info, you can discuss the price on an equal footing, negotiating the dealer's necessary profit rather than hiding it behind bogus pricing schemes. Last time I bought a new car, I got this data, walked into the dealer with it visible on my clipboard, offered them $500 over their cost, and basically had the purchase nailed down immediately. It helped that I as willing to accept last year's model and a non-preferred color; that helped him clear inventory and encouraged him to accept the offer. ($500 for 10 minutes' work selling to me, or more after an hour of playing games with someone else plus waiting for that person to walk in the door -- a good salesman will recognize that I'm offering them a good deal. These days I might need to adjust that fair-profit number up a bit; this was about 20 years ago on an $8000 car... but I'm sure CU's paperwork suggests a current starting number.) It isn't quite shelf pricing. But at least it means any haggling is based on near-equal knowledge, so it's much closer to being a fair game. |
Automatic transaction on credit card to stay active | Put one of your monthly bills on it. (Utility bill, Netflix, monthly donation to charity, etc.) I have several automatic, recurring monthly charges on my credit card. If you don't have any current monthly bills that you want to switch, contact the Red Cross, or a charity of your choice. They would be very happy to charge your credit card once a month. Alternatively, it might be okay to let it close. |
Why buy insurance? | Insurance is bought for peace of mind and to divert disaster. Diverting disaster is a good/great thing. If your house burned down, if someone hit your car, or some other devastating event (think medical) happened that required a more allocation than you could afford the series of issues may snowball and cause you to lose a far greater amount of money than the initial incident. This could be in the form of losing work time, losing a job, having to buy transportation quickly paying a premium, having to incur high rate debt and so on. For the middle income and lower classes medical, house, and medical insurance certainly falls into these categories. Also why a lot of states have buyout options on auto insurance (some will let you drive without insurance by proving bonding up to 250K. Now the other insurance as I have alluded to is for peace of mind mainly. This is your laptop insurance, vacation insurance and so on. The premise of these insurances is that no matter what happens you can get back to "even" by paying just a little extra. However what other answers have failed to clarify is the idea of insurance. It is an agreement that you will pay a company money right now. And then if a certain set of events happen, you follow their guidelines, they are still in business, they still have the same protocols, and so on that you will get some benefit when something "disadvantageous" happens to you. We buy insurance because we think we can snap our fingers and life will be back to normal. For bigger things like medical, home, and auto there are more regulations but I could get 1000 comments on people getting screwed over by their insurance companies. For smaller things, almost all insurance is outsourced to a 3rd party not affiliated legally with a business. Therefore if the costs are too high they can simply go under, and if the costs are low they continue helping the consumer (that doesn't need help). So we buy insurance divert catastrophe or because we have fallen for the insurance sales pitch. And an easy way to get around the sales pitch - as the person selling you the insurance if you can have their name and info and they will be personally liable if the insurance company fails their end of the bargain. |
If I put a large down payment (over 50%) towards a car loan, can I reduce my interest rate and is it smart to even put that much down? | I had a strange experience buying a new car. They were offering a deal of 0.9% interest on the loan but only if the loan was above a certain amount. Below that amount, the interest rate was something like 3%. Given the amount I was willing to put down, it was cheaper to put less down and get the lower interest rate. So, once you agree to the purchase price, you need to discuss what finance options they offer. You might also check in advance with other loan providers (e.g. your bank) to see what offers they have. |
Why index funds have different prices? | Funds which track the same index may have different nominal prices. From an investors point of view, this is not important. What is important is that when the underlying index moves by a given percentage, the price of the tracking funds also move by an equal percentage. In other words, if the S&P500 rises by 5%, then the price of those funds tracking the S&P500 will also rise by 5%. Therefore, investing a given amount in any of the tracking funds will produce the same profit or loss, regardless of the nominal prices at which the individual funds are trading. To see this, use the "compare" function available on the popular online charting services. For example, in Google finance call up a chart of the S&P500 index, then use the compare textbox to enter the codes for the various ETFs tracking the S&P500. You will see that they all track the S&P500 equally so that your relative returns will be equal from each of the tracking funds. Any small difference in total returns will be attributable to management fees and expenses, which is why low fees are so important in passive investing. |
ISA trading account options for US citizens living in the UK | NL7 is most likely right. With the rise of regulatory burden some financial institutions are refusing to do business for which they are at risk of not being compliant (because of complexity) or where being compliant is to onerous. Would suggest you have a look at Good luck |
Pay off credit card debt or earn employer 401(k) match? | Mathwise, I absolutely agree with the other answers. No contest, you should keep getting the match. But, just for completeness, I'll give a contrarian opinion that is generally not very popular, but does have some merit. If you can focus on just one main financial goal at a time, and throw every extra dollar you have at that one focus (i.e., getting out of debt, in your case), you will make better progress than if you're trying to do too many things at once. Also, there something incredibly freeing about being out of debt that has other beneficial impacts on your life. So, if you can bring a lot of focus to the credit card debt and get it paid off quickly, it may be worth deferring the 401(k) investing long enough to do that, even though it doesn't make as much mathematical sense. (This is essentially what Dave Ramsey teaches, BTW.) |
what's the best option to save money on everyday expenses? | There is a saying in business: what gets measured gets done. Track every expense you make. Later, look over what you have learned. If 5% of your total budget is going to something frivolous, maybe you could halve it? If 1% or 0.1% is going to that frivolous expense, there's not much to be gained even by eliminating it. If you spend $200/mo on coffees, dropping those will help. If you spend $10/mo on coffees, you need to look elsewhere for your big savings. Have a target: I want to put $X into savings each month. Therefore I can only spend $Y. What do you have to change about last month's spending patterns to get down to $Y? Where are the easy targets for you? They will be different than the easy targets for me. What absolutely cannot change for you? Once you know the costs of what you're doing, you will know where it's possible to save, and where it's "worth it" to economize. |
What college degree should I pursue to learn about stock and forex markets? | Financial Economics, although, as I understand it, not all colleges offer this major. |
What pension options are there for a 22 year old graduate in the UK? | Major things to consider: If you're expecting to look at the property market: it might prove to be sensible to start doing it now, since the market is just recovering, and (IMHO warning -I'm not a professional investor, just a random guy on the internet) prices still hasn't caught up with value fundamentals. check out cash ISA's for a 24-36 month timeframe; most do a reasonable 3-4% AER, with the current inflation rate being around 4%, this will, at the very least, make sure your money doesn't loose it's purchasing power. Finally, a word of caution: SIPPs have a rather rubbish AER rates. This, by itself, wouldn't be much of a problem on a 30-40 years timeframe, but keep the (current, and historically strictly monotonically increasing) 4% inflation rate in mind: this implies the purchasing power of any money tied in these vehicles will loose it's purchasing power, in a compounding manner. Hope this helps, let me know if you have any questions. |
How is the price of VXX determined? | Generally, ETFs work on the basis that there exists a pair of values that can be taken at any moment in time: A Net Asset Value of each share in the fund and a trading market price of each share in the fund. It may help to picture these in baskets of about 50,000 shares for the creation/redemption process. If the NAV is greater than the market price, then arbitrageurs will buy up shares at the market price and do an "in-kind" transaction that will be worth the NAV value that the arbitrageurs could turn around and sell for an immediate profit. If the market price is greater than the NAV, then the arbitrageurs will buy up the underlying securities that can be exchanged "in-kind" for shares in the fund that can then be sold on the market for an immediate profit. What is the ETF Creation/Redemption Mechanism? would be a source on this though I imagine there are others. Now, in the case of VXX, there is something to be said for how much trading is being done and what impact this can have. From a July 8, 2013 Yahoo Finance article: At big option trade in the iPath S&P 500 VIX Short-Term Futures Note is looking for another jump in volatility. More than 250,000 VXX options have already traded, twice its daily average over the last month. optionMONSTER systems show that a trader bought 13,298 August 26 calls for the ask price of $0.24 in volume that was 6 times the strike's previous open interest, clearly indicating new activity. Now the total returns of the ETF are a combination of changes in share price plus what happens with the distributions which could be held as cash or reinvested to purchase more shares. |
Having trouble with APR calculation | Check your calculation of A**. I was able to duplicate their calculations using excel. Make you sure have accounted for all the terms, it can be easy to be one off. They are making a guess at the interest rate which will be wrong, then they are adjusting it to see how wrong it is, then making another adjustment. They will repeat until they see no movement in the guesses. |
What is a good 5-year plan for a college student with $15k in the bank? | You can put them in a 5 years CD and getting a maximum of %2.5 APY if you're lucky. If you put 15k now, in 5 years you'll have $1.971. If it sounds good then take a look at the current inflation rate (i'm in usa)... If you want to think about retirement then you should open a Roth IRA. But you won't be able to touch the money without penalties (10% of earnings) before you get 59 1/2 years old. Another option would be to open a regular investment account with an online discounted broker. Which one? Well, this should be a totally separate question... If you decide to invest (Roth IRA or regular account) and you're young and inexperienced then go for a balanced mutual fund. Still do a lot of research to determine your portfolio allocation or which fund is best suited for you. Betterment (i never used it) is a no brainer investment broker. Please don't leave them in a generic checking or low interest savings account because you'll save nothing (see inflation again)... |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.