Question stringlengths 14 166 | Answer stringlengths 3 17k |
|---|---|
Company revenue increased however stock price did not | If you believe in the efficient market hypothesis then the stock price reflects the information known to market participants. Consequently, if the 'market' expected earnings to rise, and they did, then the price won't change. Clearly there are circumstances, especially in the short term and for illiquid stocks, where this isn't true, but a lot of work points to this being the case on average. |
How does a big lottery winner cash his huge check risk-free? | If the funds are deposited into a noninterest-bearing account, they will be covered by FDIC insurance regardless of the amount (However, this extended coverage may not be valid after Dec. 31, 2012): On November 9, 2010, the FDIC issued a Final Rule implementing section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act that provides for unlimited insurance coverage of noninterest-bearing transaction accounts. Beginning December 31, 2010, through December 31, 2012, all noninterest-bearing transaction accounts are fully insured, regardless of the balance of the account, at all FDIC-insured institutions. (Source: http://www.fdic.gov/deposit/deposits/changes.html) |
Is CLM a stock or an ETF? | CLM is a Closed End Fund. It is a collection of other securities that trades as if it were stock issued by a single company. NASDAQ cares about how it trades, so that would be why they list it as you say they do. Here is a list of their top 25 holdings: http://portfolios.morningstar.com/fund/holdings?t=CLM®ion=usa&culture=en-US |
Where Can The Fully Diluted Outstanding Shares Of A Company Be Found? | You can calculate the fully diluted shares by comparing EPS vs diluted (adjusted) EPS as reported in 10K. I don't believe they report the number directly, but it is a trivial math exercise to reach it. The do report outstanding common stock (basis for EPS). |
Financing with two mortgages: a thing of the past? | I doubt it. I researched it a bit when I was shopping for a HELOC, and found no bank giving HELOC for more than 80% LTV. In fact, most required less than 80%. Banks are more cautious now. If the bank is not willing to compromise on the LTV for the first mortgage - either look for another bank, or another place to buy. I personally would not consider buying something I cannot put at least 20% downpayment on. It means that such a purchase is beyond means. |
Pending euro payment to a usd account | Currency exchange is rather the norm than the exception in international wire transfers, so the fact that the amount needs to be exchanged should have no impact at all. The processing time depends on the number of participating banks and their speeds. Typically, between Europe and the US, one or two business days are the norm. Sending from Other countries might involve more steps (banks) which each takes a bit of time. However, anything beyond 5 business days is not normal. Consider if there are external delays - how did you initiate the sending? Was it in person with an agent of the bank, who might have put it on a stack, and they type it in only a day later (or worse)? Or was it online, so it is in the system right away? On the receiver side, how did you/your friend check? Could there be a delay by waiting for an account statement? Finally, and that is the most common reason, were all the numbers, names, and codes absolutely correct? Even a small mismatch in name spelling might trigger the receiving bank to not allocate the money into the account. Either way, if you contact the sender bank, you will be able to make them follow up on it. They must be able to trace where they money went, and where it currently is. If it is stuck, they will be able to get it ‘unstuck’. |
What one bit of financial advice do you wish you could've given yourself five years ago? | Planned my grocery shopping better. You can't just wake up on Saturday hungry go to the grocer and buy what looks good. Take the time to clip some coupons and more importantly make a shopping list. |
Do retailers ever stock goods just to make other goods sell better? | They may stock items that frame the various price points. Of course they risk having the items go stale before they are sold. You also have situations where the store will advertise an item, but end up taking a loss on that sale because it will bring people in, and they will make other purchases. Determining what to stock, how to display it, and how to advertise it involves both math and psychology. |
What is the buy-hold-sell indication based on? | It is simply an average of what each analyst covering that stock are recommending, and since they usually only recommend Hold or Buy (rarely Sell), the value will float between Hold and Buy. Not very useful IMHO. |
Looking to buy a property that's 12-14x my income. How can it be done? | What options do I have? Realistically? Get a regular full time job. Work at it for a year or so and then see about buying a house. That said, I recently purchased a decent home. I am self-employed and my income is highly erratic. Due to how my clients pay me, my business might go a couple months with absolutely no deposits. However, I've been at this for quite a few years. So, even though my business income is erratic, I pay myself regularly once a month. In order to close the deal with the mortgage company I had to provide 5 years worth of statements on my business AND my personal bank accounts. Also I had about a 30% down payment. This gave the bank enough info to realize that I could absolutely make the payments and we closed the deal. I'd say that if you have little to no actual financial history, don't have a solid personal income and don't have much of a down payment then you probably have no business buying a house at this point. The first time something goes wrong (water heater, ac, etc) you'll be in a world of trouble. |
Should I sell my individual stocks and buy a mutual fund | This depends on a lot actually - with the overall being your goals and how much you like risk. Question: What are your fees/commissions for selling? $8.95/trade will wipe out some gains on those trades. (.69% if all are sold with $8.95 commission - not including the commission payed when purchased that should be factored into the cost basis) Also, I would recommend doing commission free ETFs. You can get the same affect as a mutual fund without the fees associated with paying someone to invest in ETFs and stocks. On another note: Your portfolio looks rather risky. Although everyone has their own risk preference so this might be yours but if you are thinking about a mutual fund instead of individual stocks you probably are risk averse. I would suggest consulting with an adviser on how to set up for the future. Financial advice is free flowing from your local barber, dentist, and of course StackExchange but I would look towards a professional. Disclaimer: These are my thoughts and opinions only ;) Feel free to add comments below. |
How Long Can It Take For a Check I Write to Clear on My Account? | There's nothing you can do. If he has indeed deposited the check, it would appear on your account fairly quickly - I've never seen it taking more than 2-3 business days. However, a check is a debt instrument, and you cannot close the account until it clears, or until the "unclaimed property" laws of your state kick in. If he claims that he deposited the check, ask it in writing and have your bank (or the bank where it was deposited) investigate why it takes so long to clear. If he's not willing to give it to you in writing - he's likely not deposited it. Whatever the reason may be, even just to cause you nuisance. Lesson learned. Next time - cashier's check with a signed receipt. Re closing the LLC: if you're the only two partners - you can just withdraw yourself from the LLC, take out your share, and drop it on him leaving him the only partner. Check with your local attorney for details. |
Refinancing a vehicle, longer term with extra in the kitty, or shorter term and just make scheduled payment? | Refinancing a car for anything other than lowering the rate is not a good idea. Keep the same term, or take a shorter one. Remember that unlike real property, a car only loses value. So when you make your payments on your 84 month (!) loan, those payments are amortized so that the interest is front loaded. The problem is, when your car gets totalled around month 24, insurance will generally only pay what the car is worth, and you'll owe more. |
What are the tax implications of exercising options early? | Despite a fair number of views, no one besides @mbhunter answered, so I'll gather the findings of my own research here. Hopefully, this will help others in similar situations. If you spot any errors, please let me know! |
Insurance company sent me huge check instead of pharmacy. Now what? | Option 4: Go talk with someone in person at an office of the Insurance company. They have helped me several times with things like this. They can get everyone involved on a conference call and make something happen. But you have to go in. Calling is a good way to waste time and get nowhere, they will throw the issue back and forth. Find an office and go. This is the most effective solution. |
Any sane way to invest in both funds and stocks with UK ISA? | A lot of ISA's allow both shares and funds as well as gilts, Hargreaves Lansdown comes to mind as does the Alliance Trust. Some penalise (charging wise) securities vs UT (unit trusts) funds but in that case just go for a low cost IT (Investment Trust) ISA and hold individual shares as well as pooled investments in the Big IT's. I think you might have to be an "approved investor" to buy gilts. |
Can the risk of investing in an asset be different for different investors? | In a perfect market, share prices are by definition a perfect reflection of the true value of a share. Hence, you always get $10 for a share that's worth that much. In reality, the market is imperfect. Prices are somewhat of an average of all different estimates, and there's a cost-of-trading margin between sales and buy prices. Hence, in a perfect market it doesn't matter whether you have a stop loss order at $9.00. That just trades your stock worth $9 for cash worth the same $9. In an imperfect market, that trade nets you less. Furthermore, is risk a linear function of money? Perhaps not, if you bought on margin, need to lend extra and your interest rate increases with the extra credit demand. |
Investment strategy for a 20 year old with about 30k in bank account | Thanks for your service. I would avoid personal investment opportunities at this point. Reason being that you can't personally oversee them if you are deployed overseas. This would rule out rentals and small businesses. Revisit those possibilities if you get married or leave the service. If you have a definite time when you would like to purchase a car, you could buy a six or twelve month CD with the funds that you need for that. That will slightly bump up your returns without taking much risk. If you don't really need to buy the car, you could invest that money in stocks. Then if the stock market tanks, you wait until it recovers (note that that can be five to ten years) or until you build up your savings again. That increases your reward at a significant increase in your risk. The risk being that you might not be able to buy a car for several more years. Build an emergency fund. I would recommend six months of income. Reason being that your current circumstances are likely to change in an emergency. If you leave the service, your expenses increase a lot. If nothing else, the army stops providing room for you. That takes your expenses from trivial to a third of your income. So basing your emergency fund on expenses is likely to leave you short of what you need if your emergency leaves you out of the service. Army pay seems like a lot because room (and board when deployed) are provided. Without that, it's actually not that much. It's your low expenses that make you feel flush, not your income. If you made the same pay in civilian life, you'd likely feel rather poor. $30,000 sounds like a lot of money, but it really isn't. The median household income is a little over $50,000, so the median emergency fund should be something like $25,000 on the income standard. On the expenses standard, the emergency fund should be at least $15,000. The $15,000 remainder would buy a cheap new car or a good used car. The $5000 remainder from the income standard would give you a decent used car. I wouldn't recommend taking out a loan because you don't want to get stuck paying a loan on a car you can't drive because you deployed. Note that if you are out of contact, in the hospital, or captured, you may not be able to respond if there is a problem with the car or the loan. If you pay cash, you can leave the car with family and let them take care of things in case of a deployment. If you invested in a Roth IRA in January of 2016, you could have invested in either 2015 or 2016. If 2015, you can invest again for 2016. If not, you can invest for 2017 in three months. You may already know all that, but it seemed worth making explicit. The Thrift Savings Plan (TSP) allows you to invest up to $18,000 a year. If you're investing less than that, you could simply boost it to the limit. You apparently have an extra $10,000 that you could contribute. A 60% or 70% contribution is quite possible while in the army. If you max out your retirement savings now, it will give you more options when you leave the service. Or even if you just move out of base housing. If your TSP is maxed out, I would suggest automatically investing a portion of your income in a regular taxable mutual fund account. Most other investment opportunities require help to make work automatically. You essentially have to turn the money over to some individual you trust. Securities can be automated so that your investment grows automatically even when you are out of touch. |
What is this discrepency between Fidelity's and Google's stock price chart; large price spike? | This is from Google Finance right now. |
For a major expensive home renovation (e.g. addition, finished basement, or new kitchen) should one pay cash or finance with a loan? Would such a loan be “good” debt? | The crucial question not addressed by other answers is your ability to repay the debt. Borrowing is always about leverage, and leverage is always about risk. In the home improvement loan case, default comes with dire consequences-- to extinguish the debt you might have to sell your home. With a stable job, reliable income, and sufficient cash flow (and, of course, comfort that the project will yield benefits you're happy to pay for), then the clear answer is, go ahead and borrow. But if you work in a highly cyclical industry, have very little cash saved, or for whatever other reason are uncertain about your future ability to pay, then don't borrow. Save until you are more comfortable you can handle the loan. That doesn't necessarily mean save ALL the money; just save enough that you are highly confident in your ability to pay whatever you borrow. |
How is not paying off mortgage better in normal circumstances? | There are several reasons: |
How to continuously plot futures data | Note that the series you are showing is the historical spot index (what you would pay to be long the index today), not the history of the futures quotes. It's like looking at the current price of a stock or commodity (like oil) versus the futures price. The prompt futures quote will be different that the spot quote. If you graphed the history of the prompt future you might notice the discontinuity more. How do you determine when to roll from one contract to the other? Many data providers will give you a time series for the "prompt" contract history, which will automatically roll to the next expiring contract for you. Some even provide 2nd prompt, etc. time series. If that is not available, you'd have to query multiple futures contracts and interleave them based on the expiry rules, which should be publicly available. Also is there not a price difference from the contract which is expiring and the one that is being rolled forward to? Yes, since the time to delivery is extended by ~30 days when you roll to the next contract. but yet there are no sudden price discontinuities in the charts. Well, there are, but it could be indistinguishable from the normal volatility of the time series. |
Why deep in the money options have very low liquidity | There is less liquidity because they are less volatile. Option traders aren't exactly risk averse (read: are degenerate gamblers) and the other market participants that use options don't have much use for deep in the money options. Also, just trade more liquid assets and equities if you want liquid options. At-the-money options, and at-the-money options strategies have hundreds and thousand percent payoffs on relatively mundane price changes in the underlying asset. |
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home? | No It's not a loan. It's an equity investment. Think of it as a business. The parents bought 75% of the equity with $115K, and are entitled to 75% of the sale proceeds, should you someday liquidate the business (i.e. selling the house). The $500 per month is just business revenue and is paid to your parents as a dividend. Imagine you rent it out to your self and charge a $666.66 rent - you take 25% of that back and give your parents the rest. Like any equity investment, the risk for them is that if the value of the house goes down, they will have to shoulder the loss. And you are right, there is no way to build equity. You already sold that to your parents. |
1.4 million cash. What do I do? | For now, park it in a mix of cash and short term bond funds like the Vanguard Short Term Investment Grade fund. The short term fund will help with the inflation issue. Make sure the cash positions are FDIC insured. Then either educate yourself about investing or start interviewing potential advisors. Look for referrals, and stay away from people peddling annuities or people who will not fully disclose how they get paid. Your goal should be to have a long-term plan within 6-12 months. |
Is it ever a good idea to close credit cards? | Yes, it can be a good idea to close unused credit cards. I am going to give some reasons why it can be a good idea to close unused accounts, and then I will talk about why it is NOT necessarily a bad idea. Why it can be a good idea to close unused accounts "I'd like to close the cards." That is reason enough. Simplifying your financial life is a good thing. Fewer accounts let you focus your energy on the accounts that you actually use. Unused accounts still need to be monitored for fraud. You mentioned that you have high credit card balances that you are carrying. This may indicate that you have trouble using credit responsibly, and having more credit available to you might be a temptation for you. If these unused cards have annual fees, keeping them open will cost money. Unused cards sometimes get closed by the bank due to inactivity. As a result, the advice often given is that, in addition to not closing them, you are supposed to charge something to it every month. This, of course, takes more of your time and energy to worry about, as well as giving you another monthly bill to pay. Why it is NOT necessarily a bad idea to close unused accounts Other answers will tell you that it may hurt your credit score for two reasons: it would increase your utilization and lower your average account age. Before we talk about the validity of these two points, we need to discuss the importance of the credit score. Depending on what your credit score currently is, these actions may have minimal impact on your life. If you are in the mid 700's or higher, your score is excellent, and closing these cards will likely not impact anything for you in a significant way. If you aren't that high in your score yet, do you have an immediate need for a high score? Are you planning on getting more credit cards, or take out any more loans? I would suggest that, since you have credit card debt, you shouldn't be taking out any new loans until you get that cleaned up. So your score in the mean time is not very important. Are you currently working on eliminating this credit card debt? If so, your utilization number will improve, even after you close these accounts, when you get those paid off. Utilization has only a temporary effect on your score; when your utilization improves, your score improves immediately. Your average account age may or may not improve when you close these accounts, depending on how old they are compared to the accounts you are leaving open. However, the impact of this might not be as much as you think. I realize that this advice is different from other answers, or other things that you may read online. But in my own life, I do a lot of things that are supposedly bad for the credit score: I only have two credit cards, ages 2.5 and 1.5 years. (I closed my other cards when I got these.) My typical monthly utilization is around 25% on these cards, although I pay off the balance in full each month, never paying interest. I have no car loan anymore, and my mortgage is only 4 months old. No other debt. Despite those "terrible" credit practices, my credit score is very high. Conclusion Make your payments on time, get out of debt, and your score will be fine. Don't keep unwanted accounts open just because someone told you that you should. |
P/E (or similar) for index funds? | ycharts.com has "Weighted Average PE Ratio" and a bunch of other metrics that are meant to correspond to well known stock metrics. Other websites will have similar ratios. |
Should I try to negotiate a signing bonus? | You asked about a signing bonus and were told the conditions that would be required to get one. It does not appear that you will qualify, but you do have another option. Ask if you can start earlier. Some times they can't change the start date. They might have a contractual issue with the customer and the customer is setting the start date. Other times they are waiting for somebody else to retire or transfer. But ask. Tell them starting earlier speeds up the training process. For you it can make the transfer of insurance benefits sooner. Keep in mind it could be a few weeks before you get your first pay check. How were you planning on bridging the gap? |
If a company I bought stock in was de-listed but is now listed again under a new symbol, what happened to my shares? | If the company went bankrupt, the issued public shares that were outstanding at the time most likely were voided, in which case your shares are most definitely gone. The company might have done a new stock issuance coming out of bankruptcy with a different symbol, and while it could be substantially the same company, it doesn't mean much for you. It's unfortunate this may be the case, but it is one of the risks of investing. |
Why buy stock of a company instead of the holding company who has more than 99% of the stocks | Also VW has more brands, i.e. is more diversified This isn't necessarily a good thing for investing. It makes the company less likely to go down, but it limits your portfolio. For example, say you think that Hyundai is a good alternative to Volkswagen (VW) but really like Audi. If you buy VW, you get some Audi but a lot more of the rest of VW. Then if you bought Hyundai, you'd be overrepresented in that segment of the market. Audi may not be structured uniquely, but it is still the only company selling Audi brand cars. Perhaps someone thinks that those models will do well. That person may think that Audi will do exceptionally well in its niche. Having many brands isn't necessarily great. General Motors had something like sixteen brands before declaring bankruptcy. It only has twelve now. Now, it sounds like you feel the opposite about it. You don't particularly like Audi as a stock and like VW better. Your reasons sound perfectly reasonable (I know little about either company). It may even be that VW is the only one buying Audi stock, because everyone else has the same view as you. |
Is there a good rule of thumb for how much I should have set aside as emergency cash? | Since it's not tagged united-states, I'd like to offer a more general advice. Your emergency fund should match the financial risks that are relevant to you. The two main classes of financial risk are of course a sudden increase in costs or a decrease in income. You'd have to address both independently. First, loss of income. For most, this would simply equate to the loss of a job. How much benefits would you expect to get, and for how long? This is often the most important question; the 6 months advise in the US is based on a lack of benefits. With two incomes, you're less likely to lose both jobs at the same time. That's a general advise, though. If you both work for the same employer, the risk of losing two jobs at the same time is certainly real. Also, in countries with little protection against dismissal (such as the US), the chance of being layed off at the same time is also higher. On the debit side, there are also two main risks. The first is the loss or failure of an essential possession, i.e. one which requires immediate replacement. This could include a car, or a washing machine. You already paid for one before, so you should have a good idea how much it costs. The second expenditure risk is health-related costs. Those can suddenly crop up, but often you have some kind of insurance. If not, you'd need to account for some costs, but it's hard to come up with an objective number here. The two categories are dependent, of course. Health-related costs may very well coincide with a loss of income, especially if you're self-employed. Now, once you've figured out what the risks are, it's time to figure out how to insure against them. Insurance might be a better choice than an emergency fund, especially for the health costs. You might even discover that you don't need an emergency fund at all. In large parts of Europe, you could establish a credit margin that's not easily revoked (i.e. overdraft agreements), and unemployment benefits are sufficient to cover your regular cost of living. The main risk would then be a sudden lack of liquidity if your employer goes bankrupt and fails to pay the monthly wages, which means your credit should be guaranteed sufficient to borrow one month of expenses. (This of course assumes quite good credit; "pay off my car" doesn't suggest that.) |
If I short-sell a dividend-paying stock, do I have to pay the dividend? | Well, if the short seller has to pay the dividend out of their pocket, what happens to the dividend the company paid out ?? Sounds like there are 2 divdends floating around, the short's, and the company's, but only 1 share of stock. |
Can you explain why these items are considered negatives on my credit report? | Consider that however high your credit score gets, there is a 'worst piece of it'. The automated software will always report your 'weakest' two points, even if they are already at the top 0.0001% of everyone; that's just how it is coded. |
Is inflation a good or bad thing? Why do governments want some inflation? | Inflation is a bad thing. It makes it much more difficult for people to compare prices and prosperity over a long period of time. This causes people to ignore the wisdom of their elders (who remember prices from a long time ago). Back in my day, you could get a burger and fries for 15 cents -- a dime for the burger, and a nickel for the fries. But the minimum wage was only a quarter an hour! That doesn't help me decide if things have gotten better or worse. How long is "a long period of time"? That depends on the inflation rate. At 1 percent per year, 50 or 100 years is "a long time". At 10 percent per year, 5 or 10 years. At 100 percent per year, a few months. Because of the Spanish conquests of gold and silver mines in Mexico and Peru, prices in the sixteenth century rose by a factor of 5.5 during the century. This inflation was recognized as causing lots of social and governmental problems. Note that this means an average inflation rate of 2 percent per year for a century is known to be a very bad thing. There are several reasons that most governments want some inflation: |
Short selling - lender's motivation | Oftentimes, the lender (the owner of the security) is not explicitly involved in the lending transaction. Let's say the broker is holding a long-term position of 1MM shares from Client A. It is common for Client A's agreement with Broker A to include a clause that allows the broker to lend out the 1MM shares for its own profit ("rehypothecation"). Client A may be compensated for this in some form (e.g. baked into their financing rates), but they do not receive any compensation that is directly tied to lending activities. You also have securities lending agents that lend securities for an explicit fee. For example, the borrower's broker may not have sufficient inventory, in which case they would need to find a third-party lending agent. This happens both on-demand as well as for a fixed-terms (typically a large basket of securities). SLB (securities lending and borrowing) is a business in its own right. I'm not sure I follow your follow-up question but oftentimes there is no restriction that prevents the broker from lending out shares "for a very short time". Unless there is a transaction-based fee though, the number of times you lend shares does not affect "pocketing the interest" since interest accrues as a function of time. |
How can Schwab afford to refund all my ATM fees? | I am using my debit card regularly: in ATM's with a pin, in stores with my signature, and online. But later you say But from what I recall from starting my own business (a LONG time ago), for debit cards there's only a per-transaction fee of like $0.25, not a percentage cut. Only pin transactions have just a per-transaction fee paid by you to the merchant (and you are reimbursed by Schwab). If you use your card with just a signature or online without a pin, then it is a credit transaction from the merchant's perspective. The merchant pays a fee and Schwab gets its cut of that. So for two of the transaction types that you describe, the merchant pays Schwab (indirectly) out of your payment. Only when you enter your pin does it process as a debit transaction where Schwab pays the merchant. Because check cards withdraw the money from your account immediately, you don't even get the twenty to fifty day grace period. So those merchant fees are pure profit for Schwab, offsetting the loss from the ATM fees. You claim $4-5k in fees at $.25 each. That's sixteen to twenty thousand transactions. Assuming that several is four to five years, that's more than ten transactions a day. That seems like a lot. I can see three for meals, one for miscellaneous, and maybe some shopping. But if I go shopping one day, I don't normally go again for a while. I have trouble seeing a consistent average of five or more transactions a day. Even if we use just the higher ATM fees (e.g. $2), that's still more than a transaction a day. That's an extreme level of usage, particularly for someone who also makes frequent purchases via card. I haven't done any other business with them. I find this confusing. How does money get into your account? At some point, you must have deposited money into the account. You can't debit from an account without a positive balance. So you must have done or be doing some kind of business with them. If nothing else, they can invest the balance that you deposit. Note that they make a profit off such investments. They share some of that profit with you in the form of interest, but not that much really. Of course, Schwab may still be losing money on your transactions. We can't really tell without more information on how much of each transaction type you do and how much of a balance you maintain. Perhaps they are hoping that you will do other, more profitable, activities in the future. I doubt there are that many Schwab customers like you describe yourself. As best I've been able to see, they advertise their banking services just to investment customers. So it's unlikely that many customers who don't use their investment services use their banking services just for ATM reimbursements. |
I earn $75K, have $30K in savings, no debt, rent from my parents who are losing their home. Should I buy a home now or save? | You earn $75,000 yearly and saved $30,000 while living at home, for two years, rent-free. I am assuming you have been making good money for at least 2 years. How is it possible you only put away $30,000 on $150,000 of income? Were you giving something to your parents each week as rent, so they don't lose their home? Second, if you're not sure if you will be relocated in a year or two it makes no sense to buy. House prices won't spike like they have in the past any time soon. In one year, you can save another $30,000 without suffering since you live rent free. Many couples don't even make $75,000 and they got a mortgage, 2 kids and car payments. |
Why do non-electronic stock exchanges (with floor traders) still exist? | Non-electronic stock exchanges still exist because they used to exist. There are a lot of people in trading firms who grew up with floor trading and don't want to give it up, either because they feel more comfortable with it or because they might lose their job if they went away from it. |
Is it ok to use a check without a pre-printed check number? | They are valid checks, but you're going to get hassled when you try to use them. There's a perception that people using starter checks are more likely to bounce or otherwise be troublesome. When more payments were made with checks, some vendors would not accept checks with low numbers either! Checks are very cheap to get printed these days, save yourself some trouble and get some printed. |
File bankruptcy, consolidate, or other options? | If your parents can afford to shell out $1,250 a month for 5 years, they would pretty much have the debt paid off, provided the credit card companies don't start playing games with rates. If that payment is too high, maybe you could kick in $5k every few months to knock the principal down. If they think the business can keep puttering along without losing more money, that may be the way to go. Five years is long enough that the business or property may have recovered some value. Another option, depending on the value of the home, could be a reverse mortgage. I don't know how the economy has affected those programs, but that might be a good option to get the debt cleared away. My grandfather was in a similar position back in the 70's. He owned taverns in NYC that catered to an industrial clientele... the place was booming in the 60s and my grandfather and his brother owned 4 locations at one point. But the death of his brother, post-Vietnam malaise, suburban exodus and shutting of industry really hurt the business, and he ended up selling out his last tavern in 1979 -- which was a dark hour in NYC history and real estate values. A few years later, that building sold for a tremendous amount of money... I believe 10x more. I don't know whether there was a way for his business to survive for another 5-7 years, as I was too young to remember. But I do remember my grandfather (and my father to this day) being melancholy about the whole affair. It's hard to have to work part-time in your 60's and be constantly reminded that your family business -- and to some degree a part of your life -- ended in failure. The stress of keeping things afloat when you're broke is tough. But there's also a mental reward from getting through a tough situation on your own. Good luck! |
What is the best and most optimal way to use margin | This essentially depends on how you prefer to measure your performance. I will just give a few simple examples to start. Let me know if you're looking for something more. If you just want to achieve maximum $ return, then you should always use maximum margin, so long as your expected return (%) is higher than your cost to borrow. For example, suppose you can use margin to double your investment, and the cost to borrow is 7%. If you're investing in some security that expects to return 10%, then your annual return on an account opened with $100 is: (2 * $100 * 10% - $100 * 7%) / $100 = 13% So, you see the expected return, amount of leverage, and cost to borrow will all factor in to your return. Suppose you want to also account for the additional risk you're incurring. Then you could use the Sharpe Ratio. For example, suppose the same security has volatility of 20%, and the risk free rate is 5%. Then the Sharpe Ratio without leverage is: (10% - 5%) / 20% = 0.25 The Sharpe Ratio using maximum margin is then: (13% - 5%) / (2 * 20%) = 0.2, where the 13% comes from the above formula. So on a risk-adjusted basis, it's better not to utilize margin in this particular example. |
Video recommendation for stock market education | Before you go filling your head with useless information as there is way too much stuff out there on the stock market. First ask yourself a few questions: There is going to be a balance between the three... don't kid yourself. After you answer these questions find a trading strategy to get the returns you are looking for. Remember the higher returns you expect... the more time you have to put in. Find a trading strategy you like and that works for you. Ounce you have your strategy then find the stocks or ETF that work for that strategy.... Ignore everything else, it is designed to separate you from your money. Making money in the stock market is easy, don't let the media hype and negative people tell you any different. Find something that works for you and perfect it... stick to it. |
How can I calculate total return of stock with partial sale? | There are many ways to calculate the return, and every way will give you a different results in terms of a percentage-value. One way to always get something meaningful - count the cash. You had 977 (+ 31) and in the end you have 1.370, which means you have earned 363 dollars. But what is your return in terms of percentage? One way to look at it, is by pretending that it is a fund in which you invest 1 dollar. What is the fund worth in the beginning and in the end? The tricky part in your example is, you injected new capital into the equation. Initially you invested 977 dollars which later, in the second period became worth 1.473. You then sold off 200 shares for 950 dollars. Remember your portfolio is still worth 1.473, split between 950 in cash and 523 in Shares. So far so good - still easy to calculate return (1.473 / 977 -1 = 50.8% return). Now you buy share for 981 dollars, but you only had 950 in cash? We now need to consider 2 scenarios. Either you (or someone else) injected 31 dollars into the fund - or you actually had the 31 dollars in the fund to begin with. If you already had the cash in the fund to begin with, your initial investment is 1.008 and not 977 (977 in shares and 31 in cash). In the end the value of the fund is 1.370, which means your return is 1.370 / 1.007 = 36%. Consider if the 31 dollars was paid in to the fund by someone other than you. You will then need to recalculate how much you each own of the fund. Just before the injection, the fund was worth 950 in cash and 387 in stock (310 - 200 = 110 x 3.54) = 1.339 dollars - then 31 dollars are injected, bringing the value of the fund up to 1.370. The ownership of the fund is split with 1.339 / 1.370 = 97.8% of the value for the old capital and 2.2% for the new capital. If the value of the fund was to change from here, you could calculate the return for each investor individually by applying their share of the funds value respective to their investment. Because the value of the fund has not changed since the last period (bullet 3), the return on the original investment is (977 / 1.339 - 1 = 37.2%) and the return on the new capital is (31 / 31 = 0%). If you (and not someone else) injected the 31 dollar into the fund, you will need to calculate the weight of each share of capital in each period and get the average return for each period to get to a total return. In this specific case you will still get 37.2% return - but it gets even more comlex for each time you inject new capital. |
What can cause rent prices to fall? | The buy-to-rent investment bubble created (in some markets) a large number of new housing starts often exceeding the available demand. Since people were investing in the capital gain, they didn't mind whether a place was rented or not. Many places stood empty at the prices investors wished to charge. In the UK where building restrictions are so dire that few new houses can be built, new house production is less than market demand which keeps up rental prices. There just isn't any stock. In the US, where construction is more liberal, rental prices can fall as new stock enters the market. A driver will be where the sales market dries up and owners must rent to cover at least some of their mortgage losses. Or, as Joel points out, if a major employer which dominates a small town, leaves. Many old industrial towns feature both low rentals and plenty of empty, low-priced property. Liverpool, in the UK, features entire empty neighbourhoods all boarded up. If you're looking to track metrics on this simply look at migration patterns. Where large numbers of people are moving "towards" prices (and rentals) will rise. Where people are moving "away" all prices fall. |
If a country can just print money, is global debt between countries real? | Debt can be denominated either in a currency the country controls or a currency the country doesn't control. If the debt is denominated in a currency the country controls then they have the option of "printing their way out of it". That option doesn't come for free, it will devalue their currency on the global market and hurt savers in their country but it is an option. If the debt is denominated in a currency the country does not control then they don't have that option. As I understand it the US debt is in the first category. It's denominated in US dollars so the US government could if they so wished print their way out of it. On the other hand greece's debt is denominated in euros putting them at the mercy of european bankers. |
If there's no volume discount, does buying in bulk still make sense? | There is a trade-off. It can be worthwhile because you save those extra trips. (On the other hand, don't you need to go shopping all the time for perishable items anyway?) On the other hand, having those items on stock implies inventory costs (the space they take up might be limited, the money they represent is sleeping and cannot be put to other usage, some of them might break...). This trade-off gives you the economic order quantity. Your stock levels over time based on that would look like a saw-blade. In addition, you might want to keep a safety stock for emergencies (if you use them faster than expected, if there is a supply shortage...). |
Why are residential investment properties owned by non-professional investors and not large corporations? | As other answers have pointed out, professional real estate investors do own residential investment properties. However, small residential units typically are not owned by professional real estate investors as your experience confirms. This has a fairly natural cause. The size of the investment opportunity is insufficient to warrant the proper research/due diligence to which a large investment firm would have to commit if it wanted to properly assess the potential of a property. For a small real estate fund managing, say, $50 MM, it would take 100 properties at a $500K valuation in order to fully invest the funds. This number grows quickly as we decrease the average valuation to reflect even smaller individual units. Analogously, it is unlikely that you will find large institutional investors buying stocks with market caps of $20 MM. They simply cannot invest a large enough portion of total AUM to make the diligence make economic sense. As such, institutional real estate money tends to find its way into large multi-family units that provide a more convenient purchase size for a fund. |
How does a tax exemption for an action = penalty for inaction? | What it means is that you can always come up with alternative framings where the difference between two options is stated as a gain or a loss, but the effect is the same in either case. For instance, if I offer to sell a T-shirt for $10 and offer a cash discount of $1, you pay $10 if buying with a credit card or $9 if buying with cash. If I instead offer the shirt for $9 with a $1 surcharge for credit card use, you still pay $10 if buying with a credit card or $9 if buying with cash. The financial result is the same in either case, but psychologically people may perceive them differently and make different buying decisions. In a tax situation it may be more complicated since exemptions wouldn't directly reduce your tax, but only your taxable income. However, you can still see that, in general, having to pay $X more in tax for not doing some action (e.g., not purchasing health insurance) is the same as being able to pay $X less in tax as a reward for doing the action. Either way, doing the action results in you paying $X less than you would if you didn't do it; the only difference is in which behavior (doing it or not doing it) is framed as the "default" option. Again, these framings may differentially influence people's behavior even when the net result is the same. |
Making $100,000 USD per month, no idea what to do with it | You want CFP or CFA who is also a fiduciary, meaning that by law they have to put your interests ahead of their own. Financial planners who are not fiduciaries can, and often do, recommend investment vehicles that earn them the most commission with little regard of your financial goals. If you already have $500,000 to invest and racking up $100,000 a month you probably qualify for most institutions private client programs. That means that the firm/advisor will look at your financial situation and come up with a custom-tailored investment plan for you which should also include tax planning. I would start with whatever financial institutions you already work with - Schwab, your bank etc. Set up a meeting and see what they have to offer. Make sure you interrogate them about their fees, their licenses/certifications and above all if they are a fiduciary. |
Is there a term for the risk of investing in an asset with a positive but inferior return? | I'm sorry for adding another answer @MatthewFlaschen but it is too long for a comment. It depends on the situation. Say you buy shares of the Apple Inc. and want to know what is the lost opportunity cost. You need to find out what other opportunities are. In other words what are the other possible types of investments you consider. For example in theory you could try to invest in any company from S&P 500, but is it really possible (I don’t mean investing directly in index) . Are you really capable of researching each company. So in your case you would consider only a few companies as alternative solutions. Also after different time period each choice may be your lost opportunity cost. To measure the risk you have to: In conclusion I want to say that my goal was to picture in general how the process looks. Also this is just an exemplary answer. All is about in what finance field you are interested. For example in one field you use Internal Rate of Return and in other Value at Risk. Opportunity cost is to vague to exactly tell how measure its risk of wrong anticipation. It connects in every finance field and in every field you have different ways do deal with it. If you specify your question more, maybe someone will provide a better answer. |
Do individual stocks have futures trading | Things very similar to the idea of a "future" that routinely apply to single stocks are "warrants" and "options". |
Looking to buy a property that's 12-14x my income. How can it be done? | You need a cosigner. Someone prepared to repay the mortgager if you should fail to. Needless to say this is going to have to be someone who knows you and trusts you very much. One way is to find someone prepared to share a house with you. Buy a bigger house than you would otherwise need. You would own half each, and the sharing agreement would specify that if one of you defaulted on their payments the other would get a larger share according to how much extra they end up paying. The other way is to find a silent partner, who doesn't live there. They put up no money unless you actually default. They would almost certainly have to be part owners, but you can structure the agreement so that you end up with the whole house if you succeed in paying off the mortgage, or miss no payments until you sell. Parents sometimes do this for their kids. |
Living in my own rental property | If it is a separate unit from the rest of the property, you can use that portion as an investment property. the part, or unit, you are living in is your primary residence. The remainder is your investment. You are eligible to not pay capital gains on the portion you live in After two years. As always consult a tax accountant For advice... Also, if this is less then 4 unit, you may he able to finance the sale of the home with an FHA loan. |
Why do stock prices of retailers not surge during the holidays? | While there are lots of really plausible explanations for why the market moves a certain way on a certain day, no one really knows for sure. In order to do that, you would need to understand the 'minds' of all the market players. These days many of these players are secret proprietary algorithms. I'm not quibbling with the specifics of these explanations (I have no better) just pointing out that these are just really hypotheses and if the market starts following different patterns, they will be tossed into the dust bin of 'old thinking'. I think the best thing you can explain to your son is that the stock market is basically a gigantic highly complex poker game. The daily gyrations of the market are about individuals trying to predict where the herd is going to go next and then after that and then after that etc. If you want to help him understand the market, I suggest two things. The first is to find or create a simple market game and play it with him. The other would be to teach him about how bonds are priced and why prices move the way they do. I know this might sound weird and most people think bonds are esoteric but there are bonds have a much simpler pricing model based on fundamental financial logic. It's much easier then to get your head around the moves of the bond markets because the part of the price based on beliefs is much more limited (i.e. will the company be able pay & where are rates going.) Once you have that understanding, you can start thinking about the different ways stocks can be valued (there are many) and what the market movements mean about how people are valuing different companies. With regard to this specific situation, here's a different take on it from the 'priced in' explanation which isn't really different but might make more sense to your son: Pretend for a second that at some point these stocks did move seasonally. In the late fall and winter when sales went up, the stock price increased in kind. So some smart people see this happening every year and realize that if they bought these stocks in the summer, they would get them cheap and then sell them off when they go up. More and more people are doing this and making easy money. So many people are doing it that the stock starts to rise in the Summer now. People now see that if they want to get in before everyone else, they need to buy earlier in the Spring. Now the prices start rising in the Spring. People start buying in the beginning of the year... You can see where this is going, right? Essentially, a strategy to take advantage of well known seasonal patterns is unstable. You can't profit off of the seasonal changes unless everyone else in the market is too stupid to see that you are simply anticipating their moves and react accordingly. |
What to do with old company's 401k? [duplicate] | I suggest rolling it over to the 401(k) with your new employer. Particularly if they match any percentage of your contribution, it would be in your interest to take as much of that money as possible. When it comes to borrowing money from your 401(k), it looks like the issues AbraCadaver mentioned only apply if you don't pay back the money (http://www.kiplinger.com/article/real-estate/T010-C000-S002-borrowing-from-your-retirement-plan-to-buy-a-home.html). The reasonable argument against taking money out of your 401(k) to buy a home is that it leaves a dent in your retirement nest egg (and its earning power) during key earning years. On the plus side for borrowing from your 401(k), it's very low interest--and it's interest you're paying back to yourself over a 5-year period. At its current value, the most you could borrow from your 401(k) is $35K. If you're fortunate in where you live, that could be most or all of the downpayment. In my own experience, my wife borrowed against her 401(k) balance for the earnest money when we purchased a new home. Fortunately for us, an investor snapped up my previous home within 4 days of us listing it, so she was able to pay back her loan in full right away. |
How to spend more? (AKA, how to avoid being a miser) | Do you plan a monthly budget at the beginning of each month? This might seem counter-intuitive, but hear me out. Doing a budget is, of course, critically important for those who struggle with having enough money to last the month. Having this written spending plan allows people struggling with finances to control their spending and funnel money into debt reduction or saving goals. However, budgeting can also help those with the opposite problem. There are some, like you perhaps, that have enough income and live frugally enough that they don't have to budget. Their money comes in, and they spend so little that the bank account grows automatically. It sounds like a good problem to have, but your finances are still out of control, just in a different way. Perhaps you are underspending simply because you don't know if you will have enough money to last or not. By making a spending plan, you set aside money each month for various categories in three broad areas: Since you have plenty of money coming in, generously fund these spending categories. As long as you have money in the categories when you go to the store, you can feel comfortable splurging a little, because you know that your other categories are funded and the money is there to pay those other bills. Create other categories, such as technology or home improvement, and when you need an app or have a home improvement project, you can confidently spend this money, as it has already been allocated for those purposes. If you are new to budgeting, software such as YNAB can make it much easier. |
What types of ETFs are taxed differently by the IRS? | Investopedia laid out the general information of tax treatment on the ETF fund structures as well as their underlying asset classes: http://www.investopedia.com/financial-edge/0213/how-tax-treatments-of-etfs-work.aspx |
Why some things are traded in an exchange while others are traded OTC | All securities must be registered with the SEC. Securities are defined as (1) The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. thus currencies are not defined as securities. While OTC transactions of securities is not outright forbidden, there are numerous regulations issued by the SEC as a result of the 1943 Exchange Act and others that make this difficult and/or costly. Many other securities are exempted from registration thus trade in a way that could be called OTC. Different countries have variances upon US law but are very similar. Any security could be traded OTC, but law prohibits it expressly or in such a way to make it relatively expensive; further, stock options are so tightly regulated that expiration dates, expiration intervals, strike intervals, and minimum ticks are all set by the authorities. |
Should I consolidate loans and cards, or just cards, leaving multiple loans? | First of all, congratulations on admitting your problem and on your determination to be debt-free. Recognizing your mistakes is a huge first step, and getting rid of your debt is a very worthwhile goal. When considering debt consolidation, there are really only two reasons to do so: Reason #1: To lower your monthly payment. If you are having trouble coming up with enough money to meet your monthly obligations, debt consolidation can lower your monthly payment by extending the time frame of the debt. The problem with this one is that it doesn't help you get out of debt faster. It actually makes it longer before you are out of debt and will increase the total amount of interest that you will pay to the banks before you are done. So I would not recommend debt consolidation for this reason unless you are truly struggling with your cashflow because your minimum monthly payments are too high. In your situation, it does not sound like you need to consolidate for this reason. Reason #2: To lower your interest rate. If your debt is at a very high rate, debt consolidation can lower your interest rate, which can reduce the time it will take to eliminate your debt. The consolidation loan you are considering is at a high interest rate on its own: 13.89%. Now, it is true that some of your debt is higher than that, but it looks like the majority of your debt is less than that rate. It doesn't sound to me that you will save a significant amount of money by consolidating in this loan. If you can obtain a better consolidation loan in the future, it might be worth considering. From your question, it looks like your reasoning for the consolidation loan is to close the credit card accounts as quickly as possible. I agree that you need to quit using the cards, but this can also be accomplished by destroying the cards. The consolidation loan is not needed for this. You also mentioned that you are considering adding $3,000 to your debt. I have to say that it doesn't make sense at all to me to add to your debt (especially at 13.89%) when your goal is to eliminate your debt. To answer your question explicitly, yes, the "cash buffer" from the loan is a very bad idea. Here is what I recommend: (This is based on this answer, but customized for you.) Cut up/destroy your credit cards. Today. You've already recognized that they are a problem for you. Cash, checks, and debit cards are what you need to use from now on. Start working from a monthly budget, assigning a job for every dollar that you have. This will allow you to decide what to spend your money on, rather than arriving at the end of the month with no idea where your money was lost. Budgeting software can make this task easier. (See this question for more information. Your first goal should be to put a small amount of money in a savings account, perhaps $1000 - $1500 total. This is the start of your emergency fund. This money will ensure that if something unexpected and urgent comes up, you won't be so cash poor that you need to borrow money again. Note: this money should only be touched in an actual emergency, and if spent, should be replenished as soon as possible. At the rate you are talking about, it should take you less than a month to do this. After you've got your small emergency fund in place, attack the debt as quickly and aggressively as possible. The order that you pay off your debts is not significant. (The optimal method is up for debate.) At the rate you suggested ($2,000 - 2,500 per month), you can be completely debt free in maybe 18 months. As you pay off those credit cards, completely close the accounts. Ignore the conventional wisdom that tells you to leave the unused credit card accounts open to try to preserve a few points on your credit score. Just close them. After you are completely debt free, take the money that you were throwing at your debt, and use it to build up your emergency fund until it is 3-6 months' worth of your expenses. That way, you'll be able to handle a small crisis without borrowing anything. If you need more help/motivation on becoming debt free and budgeting, I recommend the book The Total Money Makeover by Dave Ramsey. |
Is candlestick charting an effective trading tool in timing the markets? | I interned for about six months at a firm that employed a few technical analysts, so I'll try to provide what little information I can. Since the bulk of the intra-day trading was decided algorithmically, technical analysts had two main functions: This basically boils down to my answer to your question. There are still enough people, trading firms, etc. who believe in candlestick charting and other visually subjective patterns that if you notice a trend, pattern, etc. before the majority of traders observing, you may be able to time the market successfully and profit. This is becoming increasingly dangerous, however, because of the steps I outlined above. Over time, the charting patterns that have been proven effective (often in many firms individually since the algorithms are all proprietary) are incorporated into computer algorithms, so the "traders" you're competing with to see the pattern are increasingly low-latency computer clusters less than a few blocks from the exchange. Summary: Candlestick charting, along with other forms of subjective technical analysis, has its believers, and assuming enough of these believers trade the standard strategies based on the standard patterns, one could conceivably time the market with enough skill to anticipate these traders acting on the pattern and therefore profit. However, the marginal benefits of doing so are decreasing rapidly as computers take over more trading responsibility. Caveats: I know you're in Australia, where the market penetration of HF/algo traders isn't as high as in the US, so it might be a few more years before the marginal benefits cease to be profitable; that being said, if various forms of technical analysis proved wildly profitable in Australia, above and beyond profits available in other markets, rest assured that large American or British trading firms would already have moved in. My experience is limited to one trading firm, so I certainly can't speak for the industry as a whole. I know I didn't address candlestick charts specifically, but since they're only one piece of visual technical analysis, I tried to address the issue as a whole. This somewhat ties into the debate between fundamental or technical analysis, which I won't get into. Investopedia has a short article on the subject. As I said, I won't get into this because while it's a nice debate for small traders, at large trading firms, they don't care; they want to make profit, and any strategy that can be vetted, whether it's fundamental, technical, or astrological, will be vetted. I want to add more information to my answer to clear up some of the misconceptions in the comments, including those talking about biased studies and a lack of evidence for or against technical analysis (and candlestick charts; I'll explore this relationship further down). It's important to keep in mind that charting methods, including candlestick charts, are visually subjective ways of representing data, and that any interpretations drawn from such charts should, ideally, represent objective technical indicators. A charting method is only as good as the indicators it's used to represent. Therefore, an analysis of the underlying indicators provides a suitable analysis for the visual medium in which they're presented. One important study that evaluates several of these indicators is Foundations of Technical Analysis: Computational Algorithms, Statistical Inference, and Empirical Implementation by Lo, Mamaysky, and Wang. Lest anyone accuse its authors of bias, I should point out that not only is it published by the National Bureau of Economic Research (a highly reputable organization within economics and finance), but also that the majority of its authors come from MIT's Sloan school, which holds a reputation second to none. This study finds that several technical indicators, e.g. head-and-shoulder, double-bottom, and various rectangle techniques, do provide marginal value. They also find that although human judgment is still superior to most computational algorithms in the area of visual pattern recognition, ... technical analysis can be improved by using automated algorithms Since this paper was published in 2000, computing power and statistical analysis have gained significant ground against human ability to identify and exploit for visual pattern detection like candlestick charts. Second, I suggest you look into David Aaronson's book, Evidence-Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals. He finds similar results to the Lo, et. al. paper, in that some technical indicators do add value to the investment process, but those that do are those that can be represented mathematically and thus programmed directly into trading algorithms (thus bypassing visual tools like candlestick charts). He describes how studies, including Lo, et al., have found that head and shoulders patterns are worse than random, i.e. you would earn higher returns if you simply traded at random. That point is worth than repeating. If a day-trader is using a candlestick chart and using head-and-shoulders patterns as part of their toolkit, he's rolling the dice when he uses that pattern and returns that come from its application come from chance. This reminds me of that old story about a company that sends out pamphlets predicting the results of sports games, complete with "strategies" and "data" to back up the predictions. The company sends out several versions of the pamphlet every game, each predicting a different winner. Given a large enough sample size, by the end of the season, there are a few people who have received a pamphlet that accurately predicted the winner for every game and they're convinced the system is perfect. The others weren't so lucky, however. Relying on candlestick charts and TA patterns that are relics from the pre-computerized era is reassuring to some traders and gives them a sense of control and "beating the market," but how long will chance remain on your side? This is why I maintain that visual tools like candlestick charts are a slowly dying medium. They certainly still add value to some trading firms, which is why Bloomberg terminals still ship with this functionality built in, but as more and more research shows, automated algorithms and statistical indicators can provide more value. It's also important to think about whether the majority of the value added by visual tools like candlestick charts comes in the form of profit or a sense of security to traders who learned the field using them over the past few decades. Finally, it's extremely important to realize that the actions of retail investors in the equities market cannot begin to represent the behaviors of the market as a whole. In the equities markets alone, trading firms and institutional investors dwarf retail investors, and the difference in scale is even more vastly pronounced in derivatives and currency markets. The fact that some retail investors use candlestick charts and the technical indicators they (hope) underlie them provides nothing but minor anecdotal evidence as to their effectiveness. |
Hiring a teenager as a household employee | First you need to ensure that you are not violating any Federal child labor laws. I would look at this: U.S. Dept of Labor, Wage & Hour Div., Standards for 14- and 15-Year Olds in Nonagricultural Employment. These were the items that pertained to Federal Law, for 14 year olds: 14 is the minimum age for employment in specified occupations outside of school hours for limited periods of time each day and each week. Fourteen- and 15-Year-Olds May Not Be Employed: There is a section on minimum allowed wage payment to young workers, and also a list of allowed types of work for 14 and 15 year old's. The type of household helper tasks described definitely fell within what was allowed for child labor. The same page details what sort of forms need to be filled out. I think this is something that is done quite commonly. Here are specifics in New York State for minimum wage for minors and for employing 14 year olds. |
What should I invest in to hedge against a serious crash or calamity? | Are you willing to risk the possibility of investing to prepare for these things and losing money or simply getting meager returns if those crises don't happen? Just invest in a well diversified portfolio both geographically and across multiple sectors and you should be fine. |
Can a Covered Call be called away before the expiration date? | They can sell a lower price call if they expect the stock to plummet in the near term but they are bullish on the longer term. What they are looking to do is collect the call premium and hope it expires worthless. And then again 'hope' that the stock will ultimately turn around. So yes, a lot of hoping. But can you explain what you mean by 'my brokerage gives premiums for prices lower than the current price'? Do you mean you pay less in commissions for ITM calls? |
Foolish to place orders before the market opens? | If you are in it for the long run and are not worried about intra day fluctuations and buying within + or - 1% you would be better off going for a market order as this will make sure you buy it on the day. If you use limit orders you risk missing out on the order if prices gap and start rising in the morning. Another option is to employ stop buy trigger orders (if offered by your broker). So you would have to sum up and decide which type of order would suit your strategy the best. Are you looking to buy the security because you are looking for long term growth and gains, or are you after getting the best price possible to help your short term gains? |
Where to find LEAPS option quotes (full chain)? CBOE & Yahoo! Finance not working | I'm familiar with and have traded U.S.-listed LEAPS and I've always used the CBOE quotes page you linked to. So, I too was surprised I couldn't find 3M (MMM) LEAPS quotes at that page, even after checking the "List all options, LEAPS, Credit Options & Weeklys if avail." radio button. Used to work! Fortunately, I was able to get access to the full chain of option quotes from the CBOE's other quotes page: Go to the "Quotes & Data" menu, then select Delayed Quotes - NEW! Here's how: I think the new interface is terrible: it's too many steps to get to the information desired. I preferred the all-in-one table of the Delayed Quotes Classic page, the one you linked to. As to why that classic page isn't yielding the full chain, I can only suggest it is a recently introduced bug (software defect). I certainly was able to get LEAPS quotes from that page before. On Yahoo! Finance option quotes: I don't know why their chain is incomplete – I can't see the logic, for instance, as to why MMM Jan 2012 60 calls are missing. I thought at first it may be lack of volume or open interest, but nope. Anyway, I don't trust Yahoo! to provide accurate, reliable quotes anyway, having seen too many errors and missing data in particular in the feed of Canadian stocks, which I also trade. I rely on the exchange's quotes, and my broker's real-time quotes. I check Yahoo! only for convenience sake, and when it actually matters I go to the other more reliable sources. For what it's worth, though, you can also get full chain option quotes at NASDAQ. See here for the 3M (MMM) example then click on the "Jan 12" link near the top. However, I would consider CBOE's quotes more definitive, since they are the options exchange. |
Will ADR owner enjoy same benefit as common shares holders | As far as I know, with ADRs you're essentially trading by proxy -- a depository bank is holding the actual stock certificate, and must provide you with the actual stock on demand. The one thing that is different is that in the event that the ADR is terminated (which sometimes happens with mergers), you have a limited period of time to sell the shares -- otherwise, you get the actual foreign stock that you may or may not be able to trade without transferring to a different broker. |
What is a Discount Called in the Context of a Negative Interest Rate? | Even though the article doesn't actually use the word "discount", I think the corresponding word you are looking for is "premium". The words are used quite frequently even outside of the context of negative rates. In general, bonds are issued with coupons close to the prevailing level of interest rates, i.e. their price is close to par (100 dollar price). Suppose yields go up the next day, then the price moves inversely to yields, and that bond will now trade at a "discount to par" (less than 100 dollar price). And vice versa, if yields went down, prices go up, and the bond is now at a "premium to par" (greater than 100 dollar price) |
How to take advantage of home appreciation | There are basically two ways to get value out of an appreciating asset such as a home: (a) Sell it and take the profit. In the case of a home, you presumably still have to live somewhere, so unless you buy a cheaper home to replace it, this doesn't get you anywhere. If you can get another house that is just as nice and in just as nice a location -- whatever you consider "nice" to be -- than this sounds like a winning option. If it means moving to a less desirable home, then you are getting the cash but losing the nice home. You'll have to decide if it's worth it. (b) Use it as collateral for a loan. In this case, that means a second mortgage, home equity loan, or a home equity line of credit. But this can be dangerous. House prices are very volatile these days. If the value of the house falls, you could be stuck with debts greater than your assets. In my humble opinion, you should be very careful about doing this. Borrowing against your house to send the kids to college or pay for your spouse's life-saving operation may be reasonable. Borrowing against your house to go on a fancy vacation is almost surely a bad idea. The vacation will be over within a couple of weeks, but you could be paying off the debt for decades. |
Are Certificates of Deposit worth it compared to investing in the stock market? | If you want to spend all of your money in the next few years, then a CD protects you from the risk of a bear market. however, if your time horizon is longer than 10 years, then the stock market is a better bet, since it is less effected by inflation risk. also, as you point out average stock returns are much higher, ignoring volatility. On the whole, CD's appeal to people who would otherwise save their money in cash. generally, it seems these people are simply afraid of stocks and bonds because those securities can lose nominal value as well as real value. I suspect this is largely because these people don't understand inflation, nor the historical long-term index fund performance. |
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. |
Why not just invest in the market? | The market is efficient, but it is not perfectly efficient. There are entities out there that consistently, legitimately, and significantly outperform the market because of asymmetric information (not necessarily insider trading) and their competitive advantage (access to data and proprietary, highly sophisticated models)*. I say this despite most hedge funds performing worse than their respective benchmarks. For most people (even very smart people) it makes a lot of sense to invest in index funds with a reasonable asset allocation (based on desired volatility, tax situation, rebalancing methods etc.). * The usual example that is cited is RT's Medallion Fund because it has enjoyed quite dramatic returns. Other groups that have been successful include Citadel and Soros Fund Management. |
The equivalent of the standing order in the internet age for the UK specifically | A standing order is still the right way to do this. Most bank accounts have online access and will let your customer setup the standing order online, without having to fill in a paper form. |
Cannot get a mortgage because I work through a recruiter | Some options: See if the seller will sell to you on Contract. With a significant down payment the seller may be willing to sell you the condo on contract. This fill in the year or so you will probably need to go from contractor to full time employee with enough time on the job to get a mortgage. Keep Shopping. Be up front with the lenders with the problems you are running into and see if any of them can find you a solution. You may need to take a higher rate in the short term but hopefully you can refinance in a few years to a more reasonable rate. Check with a local bank or credit union. Many times local banks or CU's will finance high demand properties that may be out of favor with the super banks that have no ties to your community. These banks sometimes realize that just because the standard spreadsheet says this is a bad risk the reality is the specific property you are interested in is not the risk that it appears on paper. You will have to find a bank that actually retains its mortgages as many local banks have become agents that just sell mortgages to the mortgage market. Talk to a Realtor. If you are not using one now it may be time to engage one. They can help you navigate these bumps and steer you towards lenders that are more amenable to the loan you need. |
what is difference between stock and dividend? | stocks represent ownership in a company. their price can go up or down depending on how much profit the company makes (or is expected to make). stocks owners are sometimes paid money by the company if the company has extra cash. these payments are called dividends. bonds represent a debt that a company owes. when you buy a bond, then the company owes that debt to you. typically, the company will pay a small amount of money on a regular basis to the bond owner, then a large lump some at some point in the future. assuming the company does not file bankrupcy, and you keep the bond until it becomes worthless, then you know exactly how much money you will get from buying a bond. because bonds have a fixed payout (assuming no bankrupcy), they tend to have lower average returns. on the other hand, while stocks have a higher average return, some stocks never return any money. in the usa, stocks and bonds can be purchased through a brokerage account. examples are etrade, tradeking, or robinhood.com. before purchasing stocks or bonds, you should probably learn a great deal more about other investment concepts such as: diversification, volatility, interest rates, inflation risk, capital gains taxes, (in the usa: ira's, 401k's, the mortgage interest deduction). at the very least, you will need to decide if you want to buy stocks inside an ira or in a regular brokerage account. you will also probably want to buy a low-expense ration etf (e.g. an index fund etf) unless you feel confident in some other choice. |
Online Foreign Exchange Brokerages: Which ones are good & reputable for smaller trades? | The following have been recommended to me for the UK: When I was doing my investigations, all had good reputations but Interactive Investor looked to have the nicer service and their fees seemed a bit more reasonable. TD Waterhouse has the advantage of a number of sites serving local markets (TD Ameritrade for the US, for instance). |
can the government or debt collectors garnish money from any bank account to which the debtor has access? | I would call the bank and ask how the person is on the account. If they are an owner, or are an authorized user, or what type of owner they are, etc. If the bank makes the distinction between "user" and "owner" then most likely, your funds are not able to be seized. If they are a joint owner, then, typically, 100% of the money is yours and 100% of the money is theirs and either of you could withdraw all the money, close the account, or have the money seized as part of a legal action. |
When a stock price goes down, does the money just disappears into thin air? | You buy a $100k sport car, but don't buy any insurance. You take a curve too fast and jump out just in time to see your car go off a cliff, like a chase movie. The value went from $100k to zero in seconds. Where did the $100k go? |
How do I figure out if I will owe taxes | If you want to predict the, the easiest solution is to get hold of a copy of last year's tax forms and fill them in with estimated numbers. Odds are that none of the more complicated deductions will apply to you this first time around, so I'd suggest just using the federal 1040EZ, and your state's equivalent, for this purpose. If it turns out that you can claim anything more than the standard deduction, that would reduce your taxes, so this is leaning toward the safe side. |
Giving kids annual tax free gift of $28,000 | If the child is a dependent the question is moot. It is accepted that the parent will pay for some, most, or all of the tuition. There is no tax issue for a current student. The payment of tuition helps them qualify as a dependent. There is no need to transfer the money to the child's account; it can be sent directly to the school. If the money is to be used in the future there are accounts such as 529s pre-paid accounts, and Coverdell savings accounts that can be used. All have pluses and minuses, all can impact taxes, and all can impact financial aid calculations. |
Are Forex traders forced to use leverage? | I recommended Currency Trading For Dummies, in my answer to Layman's guide to getting started with Forex (foreign exchange trading)? The nature of the contract size points toward only putting up a fraction of the value. The Euro FX contract size is 125,000 Euro. If you wish to send the broker US$125K+ to trade this contract, go ahead. Most people trade it with a few thousand dollars. |
Do retailers ever stock goods just to make other goods sell better? | Use of this is demonstrated in this video: https://youtu.be/Ip5jG3djdyk Stocking products that you have no intention of selling can be used to make other products look more appealing by comparison. It's more psychological than anything but it isn't an uncommon practice. |
Can a single-member LLC have a fiscal year not as the calendar year? | I'm no tax expert by any means. I do know that a disreagarded entity is considered a sole proprietor for federal tax purposes. My understanding is that this means your personal tax year and your business tax year must be one and the same. Nevertheless, it is technically possible to have a non-calendar fiscal year as an individual. This is so rare that I'm unable to find a an IRS reference to this. The best reference I could find was this article written by two CPAs. If you really want to persue this, you basically need to talk with an accountant, since this is complicated, and required keeping propper accounting records for your personal life, in addition to your business. A ledger creqated after-the-fact by an accountant has been ruled insufficent. You really need to live by the fiscal year you choose. |
Best Time to buy a stock in a day | Buy it at the close. That way you won't lose money (even if marked to market) on the day. |
How important is disability insurance, e.g. long-term, LTD? Employer offers none | (Oops - I had been meaning to come back to this Q. sooner. Just saw my reminder, so here goes.) Shortly before this question was asked, I actually read a good blog post on the subject of disability insurance at Evolution of Wealth - 7 Ways Your Group Disability Will Fail. I know the OP doesn't have group disability (and hence the question), but the reason I'm highlighting it is: Even somebody with a group disability policy from their employer may want to consider supplementing it with an individual policy that has better coverage. In my case, the reason I opted for an individual policy was due to point #6 from the post: ... ways that group disability coverage will fail you: ... [etc] 6) You can go work somewhere else. With disability insurance there is a feature called own-occupation. This means that you are unable to perform the duties of your specific occupation even if you are able to work in an other occupation. Good group disability coverage will cover your own-occupation for a period of 2 years after that if you can work anywhere (yes, even McDonald’s) then you receive no more benefits. Notice I said ‘good’ coverage, a lot of policies don’t even have the own-occupation benefit. ... I made sure my own individual LTD policy included coverage of own-occupation until age 65. So, do pay attention to the specific features and limitations of LTD policies when shopping for one. |
Is a fixed-price natural gas or electricity contract likely to save money? | The answer to this question will vary considerably by state and how utilities are regulated in your area. In New York, ESCOs (Energy Supply Companies) are almost always a ripoff for consumers versus the old-style regulated utility (in NY the utility supply markups are tightly regulated, but ESCOs are less regulated). You also need to really understand the marketplace rules for "locking in" a price. If you can lock in the July price for natural gas for a year, that rocks. There are other factors as well. But even then its a real bet, since weather and supply factors can have a dramatic effect on gas prices in the winter. IMO, the best bet is to run with the market rates and bank the efficiency improvements that you build into your home over time. Some utilities offer "budget plans" that smooth out your payments without interest -- I'd recommend that route if predictable bills are your goal. |
What's a normal personal debt / equity ratio for a highly educated person? | Curious, are you asking about average, or the good numbers? The median family doesn't have $2500 to address an emergency. We are a nation of debtors, and spenders. A young couple at .8 is doing well. It means they saved 20% for a down payment, and just bought a house. Not too tough to buy with 5% down, have no other savings, and a student loan to put the debt to equity over 100%. Older people should be shooting for zero. I semi-retired at 50, and my mortgage is at about 8% of my net worth. 50% would be too high. Others 50+ should have at least 50% equity in their home and nearly half their "number," the amount needed to retire. So, a target is 25% maximum. These numbers shouldn't impact you at all. You should plan wisely, spend frugally, and prioritize your goals. There are 'zero debt' people out there who make me look reckless, and others who invest in rentals with a goal of keeping them highly leveraged. Neither group is wrong, what's right for you is what lets you sleep at night. |
Who Bought A Large Number Of Shares? | The reality that the share price did not move shows that there is nothing nefarious going on. It is most likely some mutual fund offloading their position to another fund. You can commonly see the play out at market openings if you have access to level II data. You will see a big block sitting on both sides of the same bid/ask. If you put in a higher bid (or vice versa) the two positions will move to match yours. And when the market opens their trade will be transacted BEFORE yours, even though you are thinking ... 'well I put in my bid first'. Obviously they have agreed to swap and agreed to use whatever value the market decides. |
What does ES1 refer to in this picture? | ES1 is the Bloomberg symbol for the CME E-mini S&P 500 front-month continuous contract. ES2, ES3, etc. will likewise yield the 2nd and 3rd months. Which exact futures contract this symbol refers to will change about once a month. |
Why are the banks and their customers in the United States still using checks? [duplicate] | Check use is declining here too, but it still has some practical advantages over electronic means: |
Is it normal for brokers to ask whether I am a beginner? | Yes, this is common and in some cases may be required. They may use it for marketing at some level, but they also use it for risk management in deciding, for example, how much margin to offer and whether to approve access to "riskier" products like stock options. |
Algorithmic trading in linux using python | In Japan, there's a competition well-lasting since 2004 or so where you can run your own software agent in a virtual market. Market data is updated from the real world everyday. And if your agent proves good, the organizer puts it into the real market. The language is unfortunately limited to Java only to my knowledge. OS is not limited since your agent is supposed to run on the organizer's environment. English might not be well supported on their web site... |
Will a credit card issuer cancel an account if it never incurs interest? | Credit card merchant fees are $0.15 - $0.40 per transaction plus 1.5-4% of the amount charged. Card issuers are competing to get to be the card in your pocket that you use on a daily basis. If you were a card issuer, wouldn't you like to get 1.5-4% of every transaction I make for the rest of my life? As a side note, ever since I became a business owner and saw how much we are all paying for credit card merchant fees, I've patronized a lot more cash-only businesses. The best ones pass the savings directly on to the consumer. |
What kind of company is USAA? | The United Services Automobile Association has a funny legal structure: it's not a corporation and has no shareholders. Policyholders and account holders are paid any profits. In that respect, it functions very much like a credit union; technically, it's structured as a Texas-based and Texas Department of Insurance regulated unincorporated reciprocal inter-insurance exchange and Fortune 500 financial services company offering banking, investing, and insurance to people and families that serve, or served, in the United States military. http://en.wikipedia.org/wiki/USAA Normally a company like this is a corporation so that its owners can benefit from limited liability: otherwise, if the company loses millions or billions, any one of the individual owners / members could be held liable for paying those millions and billions! However, the Texas laws which govern them as a Texas-based inter-insurance exchange also serve to limit the liability of members. The banking services are provided by the USAA Federal Savings Bank, which is structured as a (drumroll) federal savings bank. They also own a couple of other random businesses. |
What does a Dividend “will not be quoted ex” mean? | One occastion where "will not be quoted ex" is used is when a corporate action is occurring such as a spin-off. In such a case, the rights to, and the spin-off itself may be quoted separately on the home country exchange. However, if the company is based abroad, it may not be worth the expense for them to have an additional securities listing on the local (US) exchange. For example: In November 2016, Yamana Gold (TSX: YRI, NYSE: AUY) announced it will have an initial public offering of a spin-off (Brio Gold, to be listed on TSX as BRIO). Existing shareholders received a right to one share of the spin-off for every 16 shares they held of YRI (or AUY). These rights were separately traded in advance of the IPO of the spin-off on TSX under "YRI.RT", but the prospectus they stated that the rights "will not be quoted ex" on NYSE, i.e. there was no separate listing on NYSE for these rights. The wording seems counter-intuitive, but I suspect that is the attorneys who were preparing the prospectus used those specific words as they may have a very specific meaning (e.g. from a statute or previous case). |
How will a 1099 work with an existing W-2? | You can have multiple W2 forms on the same tax return. If you are using software, it will have the ability for you to enter additional W2 forms. If you are doing it by paper, just follow the instructions and combine the numbers at the correct place and attach both. Similarly you can also have a 1099 with and without a W2. Just remember that with a 1099 you will have to pay the self employment tax ( FICA taxes, both employee and employer) and that no taxes will be withheld. You will want to either adjust the withholding on your main job or file quartely estimated taxes. Travel reimbursement should be the same tax exempt wise. The difference is that with a 1098, you will need to list your business expenses for deduction on the corresponding tax schedule. The value on the 1099 will include travel reimbursement. But then you can deduct your self employment expenses. I believe schedule C is where this occurs. |
Transfer $70k from Wells Fargo (US) to my other account at a Credit Union bank | Making a payment of any amount is usually legal, although of course the specific circumstances matter, and I'm not qualified to give legal advice. Just had to throw in that disclaimer not because I think there's a problem here, but because it is impossible to give a definite answer to a legal question in a specific situation on Stack Exchange. But the government will be involved. There are two parts to that. First, as part of anti-money-laundering laws, banks have to report all transactions above a certain limit; I believe $10k. When you use a check or similar to pay, that happens pretty much automatically. When making a cash payment, you may have to fill out some forms. An secondly, Edward Snowden revealed that the government also tapped into banking networks, so pretty much every transaction is recorded, even if it is not reportable. |
Shorting Stocks And Margin Account Minimum | The margin money you put up to fund a short position ($6000 in the example given) is simply a "good faith" deposit that is required by the broker in order to show that you are acting in good faith and fully intend to meet any potential losses that may occur. This margin is normally called initial margin. It is not an accounting item, meaning it is not debited from you cash account. Rather, the broker simply segregates these funds so that you may not use them to fund other trading. When you settle your position these funds are released from segregation. In addition, there is a second type of margin, called variation margin, which must be maintained while holding a short position. The variation margin is simply the running profit or loss being incurred on the short position. In you example, if you sold 200 shares at $20 and the price went to $21, then your variation margin would be a debit of $200, while if the price went to $19, the variation margin would be a credit of $200. The variation margin will be netted with the initial margin to give the total margin requirement ($6000 in this example). Margin requirements are computed at the close of business on each trading day. If you are showing a loss of $200 on the variation margin, then you will be required to put up an additional $200 of margin money in order to maintain the $6000 margin requirement - ($6000 - $200 = $5800, so you must add $200 to maintain $6000). If you are showing a profit of $200, then $200 will be released from segregation - ($6000 + $200 = $6200, so $200 will be release from segregation leaving $6000 as required). When you settle your short position by buying back the shares, the margin monies will be release from segregation and the ledger postings to you cash account will be made according to whether you have made a profit or a loss. So if you made a loss of $200 on the trade, then your account will be debited for $200 plus any applicable commissions. If you made a profit of $200 on the trade then your account will be credited with $200 and debited with any applicable commissions. |
Get interest on $100K by spending only $2K using FOREX rollovers? | I work at a FOREX broker, and can tell you that what you want to do is NOT possible. If someone is telling you it is, they're lying. You could (in theory) make money from the SWAP (the interest you speak of is called SWAP) if you go both short and long on the same currency, but there are various reasons why this never works. Furthermore, I don't know of any brokers that are paying positive SWAP (the interest you speak of is called SWAP) on any currency right now. |
As an investor or speculator, how might one respond to QE3 taper? | Any answer for what to do in a taper will assume ceteris paribus because how markets initially react when they suspect a taper may immediately change depending on what data are released after the taper. For instance, I've seen Soros and a few other hedge fund managers hold shorts when expecting a taper because the theory is that the market may fall. However, suppose the market falls 5%, but then positive employment numbers are released. What then? The same holds true for betting against Emerging Markets (EM), something I've seen Jesse Colombo and others suggest; the claim that Emerging Markets are in a bubble thanks to the U.S. Federal Reserve (the more money they release, the more the money goes overseas ...). Again, this is possibly true, but if good data are released after the taper for these emerging markets, they could see growth and those with the shorts could get killed. TL;DR - when we ask about what happens after the taper, we have to remember we're assuming some things about everything else. I do think that the "safest play" post taper is what Bill Gross mentioned about bonds (basically a bubble), as we should see interest rates rise and the Chinese seem to be reluctant to buy as much of U.S. bonds as they have in the past (though some, like Mish, assert the U.S. would welcome this). The other play I like is the VIX (if you think the market will fall) or against (if you think the market will rise). SVXY has been one of the best plays since 2011 (compare it to the SPY for the same time period). |
Dec 31 accounting for S Corp - what to do with loss? | Conceptually, the entries are: Yes. And since you're the sole owner, your basis will equal to the equity balance on the balance sheet. Keep in mind the book and tax basis will probably be different, so you may want to keep a separate calculation to track the tax basis. There is no journal additional journal entry for this. If you're using bookkeeping software, be sure to research its book-closing/closing entries feature, as it is handled differently depending on the software. For example Quickbooks doesn't explicitly close its books, but re-computes the balance sheet dynamically depending on the selected date range. |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.