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Importance of dividend yield when evaluating a stock? | But I wish to know why the parameter is dividend/market price rather than just 'dividend'? What 'extra' info you can uncover by looking at dividend/market price that you cannot get from 'dividend'? Consider two stocks A and B. A offers a dividend of $1 per year. B offers a dividend of $2 per year. Let's remove all complications aside and assume that this trend continues. If you were to buy each of these stocks you will get the following amounts over its life (assumed infinity for simplicity): cash flows from A = $1/(0.04) = $25, assuming risk free is 4% per annum cash flows from B = $2/(0.04) = $50, assuming risk free is 4% per annum The price you buy them at is an important factor to consider because let's say if A was trading for $10 and B for $60, then A would look like a profitable nvestment while B won't. Of course, this is a very simplistic view. Dividend rates are not constant and many companies pose a significant risk of going bust but this should help illustrate the general idea behind the D/P ratio. P.S.:- The formula I have used is one for computing the NPV of a perpetuity. |
See list of stock trades for day | You can see all the (millions) of trades per day for a US stock only if you purchase that data from the individual exchanges (NYSE, NASDAQ, ARCA, ...), from a commercial market data aggregator (Bloomberg, Axioma, ...), or from the Consolidated Tape Association. In none of that data will you ever find identifying information for the traders. What you are recalling regarding the names of "people from the company" trading company stock is related to SEC regulations stating that people with significant ownership of company stock and/or controlling positions on the company board of directors must publicize (most of) their trades in that stock. That information can usually be found on the company's investor relations website, or through the SEC website. |
Do I not have a credit score? | You can't get your credit score for free, just the report with the information the score is based on. If you got credit reports through annualcreditreport.com, the Score tab would typically contain an advertisement for purchasing your score. If you have an ad-blocker enabled, that might be blocked, explaining the blank page. Try turning off any browser extensions that alter how pages are shown. The accounts page/tab/section should show something like "0 open accounts" or similar, to indicate that it is loading data. Your lack of credit history probably does mean you don't have a credit score, so it's probably not worth paying anything to find that out. The focus should be on the accuracy of the underlying report, since you can do something about that. Should I be worried? I'd say no on that. You'll have an easier time getting credit (and better terms) in the future if you start now with some account, even if it's a secured credit card you don't use much, because the age of the oldest and average accounts are factors in credit scoring models. |
Withdraw funds with penalty or bear high management fees for 10 years? | I think the main question is whether the 1.5% quarterly fee is so bad that it warrants losing $60,000 immediately. Suppose they pull it out now, so they have 220000 - 60000 = $160,000. They then invest this in a low-cost index fund, earning say 6% per year on average over 10 years. The result: Alternatively, they leave the $220,000 in but tell the manager to invest it in the same index fund now. They earn nothing because the manager's rapacious fees eat up all the gains (4*1.5% = 6%, not perfectly accurate due to compounding but close enough since 6% is only an estimate anyway). The result: the same $220,000 they started with. This back-of-the-envelope calculation suggests they will actually come out ahead by biting the bullet and taking the money out. However, I would definitely not advise them to take this major step just based on this simple calculation. Many other factors are relevant (e.g., taxes when selling the existing investment to buy the index fund, how much of their savings was this $300,000). Also, I don't know anything about how investment works in Hong Kong, so there could be some wrinkles that modify or invalidate this simple calculation. But it is a starting point. Based on what you say here, I'd say they should take the earliest opportunity to tell everyone they know never to work with this investment manager. I would go so far as to say they should look at his credentials (e.g., see what kind of financial advisor certification he has, if any), look up the ethical standards of their issuers, and consider filing a complaint. This is not because of the performance of the investments -- losing 25% of your money due to market swings is a risk you have to accept -- but because of the exorbitant fees. Unless Hong Kong has got some crazy kind of investment management market, charging 1.5% quarterly is highway robbery; charging a 25%+ for withdrawal is pillage. Personally, I would seriously consider withdrawing the money even if the manager's investments had outperformed the market. |
Postbank (Germany) - transferring money to the US - what are the best options? | For those who are interested, I am answering my own question: We used Postbank and transferred 6000 Euro, we chose to Transfer in US$, and selected Shared Fees. There were three fees in total: All in all, I paid ~37$; this is about half of what I expected; and I got a perfect exchange rate. Postbank might have its downsides, but it seems they are still a good deal. |
Is it better to miss the dividend and buy the undervalued stock? | As yet another explanation of why it does not really matter, you can look at this from the valuation point of view. Stock price is the present value of its future cash flows (be it free cash flow of the firm or dividends, depending on the model). Let's have a look at the dividends case. Imagine, the price of the stock is based on only three dividends streams $5 dollars each: dividend to be paid today, in year 1, and in year 2. Each should be discounted back to today (say, at 10%), except today's dividend, since today is now. Once that dividend is paid, it is no longer in the stream of cash flows. So if we just delete that first $5 from the formula, the price will adjust itself down by the amount of the dividend to $8.68. NOTE that this is a very simple example, since in reality cash flows streams are arguably infinite and because there are many other factors affecting stock price. But simply for your understanding, this example should provide you with the reason simply from the valuation perspective. |
Lump sum annuity distribution — do I owe estate tax? | There can be Federal estate tax as well as State estate tax due on an estate, but it is not of direct concern to you. Estate taxes are paid by the estate of the decedent, not by the beneficiaries, and so you do not owe any estate tax. As a matter of fact, most estates in the US do not pay Federal estate tax at all because only the amount that exceeds the Federal exemption ($5.5M) is taxable, and most estates are smaller. State estate taxes might be a different matter because while many states exempt exactly what the Federal Government does, others exempt different (usually smaller) amounts. But in any case, estate taxes are not of concern to you except insofar as what you inherit is reduced because the estate had to pay estate tax before distributing the inheritances. As JoeTaxpayer's answer says more succinctly, what you inherit is net of estate tax, if any. What you receive as an inheritance is not taxable income to you either. If you receive stock shares or other property, your basis is the value of the property when you inherit it. Thus, if you sell at a later time, you will have to pay taxes only on the increase in the value of the property from the time you inherit it. The increase in value from the time the decedent acquired the property till the date of death is not taxable income to you. Exceptions to all these favorable rules to you is the treatment of Traditional IRAs, 401ks, pension plans etc that you inherit that contain money on which the decedent never paid income tax. Distributions from such inherited accounts are (mostly) taxable income to you; any part of post-tax money such as nondeductible contributions to Traditional IRAs that is included in the distribution is tax-free. Annuities present another source of complications. For annuities within IRAs, even the IRS throws up its hands at explaining things to mere mortals who are foolhardy enough to delve into Pub 950, saying in effect, talk to your tax advisor. For other annuities, questions arise such as is this a tax-deferred annuity and whether it was purchased with pre-tax money or with post-tax money, etc. One thing that you should check out is whether it is beneficial to take a lump sum distribution or just collect the money as it is distributed in monthly, quarterly, semi-annual, or annual payments. Annuities in particular have heavy surrender charges if they are terminated early and the money taken as a lump sum instead of over time as the insurance company issuing the annuity had planned on happening. So, taking a lump sum would mean more income tax immediately due not just on the lump sum but because the increase in AGI might reduce deductions for medical expenses as well as reduce the overall amount of itemized deductions that can be claimed, increase taxability of social security benefits, etc. You say that you have these angles sussed out, and so I will merely re-iterate Beware the surrender charges. |
What is the best way to get cash from my retirement accounts for a home down payment? | The best way to get cash from retirement is to not do it. Leave the retirement savings alone. Start saving for house down payment. Look for ways to squirrel away money for that down payment. Consider payment plus insurance, taxes, and maintenance costs. If all that comes in less than a rental, you're probably better off buying. Most likely it will not. Make sure that when you go to buy, you have 20% down, AND an emergency fund that will cover you for 3 months of expenses at the new, higher, rate. Hint, that'll probably be in excess of 10k based on a single person with a 1.5-2k a month mortgage, plus utilities and food. And as a home owner, you will have a lot of things for which that emergency fund will come in handy. It's a matter of when, not if. Consider, 5k for a new roof, 6k for a hvac system, 1.5k for exterior paint, 500 for the plumber, 750 for pest control, 250 to have the tree removed that fell in a storm. 1000 for a new fridge. 500 for a new water heater. 1200 for washer and dryer. ALL of these are periodic costs, and they all able to fail before they're supposed to. |
Saving tax for long term stock investment capital gain by quiting my current job? | The capital gain is counted as part of your income. So with a million capital gain you will be in a high tax bracket, and have to pay the corresponding capital gains tax rate on the million. |
How do “held” amounts appear on statements and affect balances of traditional credit cards? | The "hold" is just placeholder that prevents you from overspending until the transaction is settled. The merchant isn't "holding" your money, your bank or card provider is protecting itself from you overdrawing. In general, it takes 1-3 days for a credit transaction to settle. With a credit card, this usually isn't an issue, unless you have a very low credit line or other unusual things going on. With pre-paid and debit cards, it is an issue, since your spending power is contingent upon you having an available balance. I'm a contrarian on this topic, but I don't see any compelling reason to use debit or stored value cards, other than preventing yourself from overspending. I've answered a few other questions in detail in this area, if you're interested. |
Do I need another health insurance policy? | Most of the points by MrChrister are valid. I can't say much for Philippines, however there is a reason for one to go with individual insurance from my experience in India. |
Should I set a stop loss for long term investments? | You should definately have a stop loss in place to manage your risk. For a time frame of 5 to 10 years I would be looking at a trailing stop loss of 20% to 25% off the recent high. Another type of stop you could use is a volatility stop. Here the more volatile the stock the larger the stop whilst the less volatile the stock the smaller the stop. You could use 3 or 4 x Weekly ATR (Average True Range) to achieve this. The reason you should always use a stop loss is because of what can happen and what did happen in 2008. Some stock markets have yet to fully recover from their peaks at the end of 2007, almost 9 years later. What would you do if you were planning to hold your positions for 5 years and then withdrawal your funds at the end of June 2021 for a particular purpose, and suddenly in February 2021 the market starts to fall. By the time June comes the market has fallen by over 50%, and you don't have enough funds available for the purpose you planned for. Instead if you were using a trailing stop loss you would manage to keep at least 75% of the peak of your portfolio. You could even spend 10 minutes each week to monitor your portfolio for warning signs that a downtrend may be around the corner and adjust your trailing stop to maybe 10% in these situations, protecting 90% of the peak of your portfolio. If the downtrend does not eventuate you can adjust your trailing back to a higher percentage. If you do get stopped out and shortly after the market recovers, then you can always buy back in or look for other stocks and ETFs to replace them. Sure you might lose a bit of profits if this happens, but it should always be part of your investment plan and risk management how you will handle these situation. If you are not using stop losses, risk management and money management you are essentially gambling. If you say I am going to buy these stocks and ETFs hold them for 10 years and then sell them, then you are just hoping to make gains - which is essentially gambling. |
Is it worth investing in Index Fund, Bond Index Fund and Gold at the same time? | I'd say neither. Index Funds mimic whatever index. Some stocks that are in the index are good investment opportunities, others not so much. I'm guessing the Bond Index Funds do the same. As for Gold... did you notice how much gold has risen lately? Do you think it will keep on rising like that? For which period? (Hint: if your timespan is less than 10 years, you really shouldn't invest). Investing is about buying low, and selling high. Gold is high, don't touch it. If you want to invest in funds, look at 4 or 5 star Morningstar rated funds. My advisors suggest Threadneedle (Lux) US Equities DU - LU0096364046 with a 4 star rating as the best American fund at this time. However, they are not favoring American stocks at this moment... so maybe you should stay away from the US for now. Have you looked at the BRIC (Brazil, Russia, India, China) countries? |
What does a stock's quoted value represent? | Stock price is set to the price with the highest transaction volume at any given time. The stock price you cited was only valid in the last transaction on a specific stock exchange. As such it is more of an "historic" value. Next trade will be done with the next biggest volume. Depending on the incoming bids and asks this could be higher or lower, but you can assume it will not be too far off if there is no crash underway. Simple example stock exchange: |
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. |
What are some sources of information on dividend schedules and amounts? | Yahoo Finance is definitely a good one, and its ultimately the source of the data that a lot of other places use (like the iOS Stocks app), because of their famous API. Another good dividend website is Dividata.com. It's a fairly simple website, free to use, which provides tons of dividend-specific info, including the highest-yield stocks, the upcoming ex-div dates, and the highest-rated stocks based on their 3-metric rating system. It's a great place to find new stocks to investigate, although you obviously don't want to stop there. It also shows dividend payment histories and "years paying," so you can quickly get an idea of which stocks are long-established and which may just be flashes in the pan. For example: Lastly, I've got a couple of iOS apps that really help me with dividend investing: Compounder is a single-stock compound interest calculator, which automatically looks up a stock's info and calculates a simulated return for a given number of years, and Dividender allows you to input your entire portfolio and then calculates its growth over time as a whole. The former is great for researching potential stocks, running scenarios, and deciding how much to invest, while the latter is great for tracking your portfolio and making plans regarding your investments overall. |
Why not pay in full upfront for a car? | You need to do the maths exactly. The cost of buying a car in cash and using a loan is not the same. The dealership will often get paid a significant amount of money if you get a loan through them. On the other hand, they may have a hold over you if you need their loan (no cash, and the bank won't give you money). One strategy is that while you discuss the price with the dealer, you indicate that you are going to get a loan through them. And then when you've got the best price for the car, that's when you tell them it's cash. Remember that the car dealer will do what's best for their finances without any consideration of what's good for you, so you are perfectly in your rights to do the same to them. |
I'm 23 and was given $50k. What should I do? | Here's what I'd do: Pay off the cards and medical. Deposit 35k in the best interest bearing accounts you can find (maybe some sort of ladder). Link your student loans payments to this account. This frees up $486 a month in income, and generates a small amount of interest at the same time. Now, set up some sort of retirement account. Put $400 a month in it. This leaves you with $86 a month to use as you please. You still have $10 000 cash, out of which you could buy an inexpensive used car, and bank some as emergency funds. |
What options do I have at 26 years old, with 1.2 million USD? | Lots of good advice so far. Here's some meta-advice. Read through everything here twice, and distill out what the big picture ideas are. Learn about what you need to know about them. Pick a strategy and/or long term goals. Work toward them. Get advice from many many places and distill it. This is currently known as crowd-sourcing but I've been doing it all my life. It's very effective. No one will ever care as much about your money as you. Some specific things I haven't seen mentioned (or not mentioned much): |
What are some time tested passive income streams? | Any kind of savings account is a passive income stream. |
Joint Account for Common Earnings | Do not use a shared bank account. One of you can cash/deposit the check in your personal account and then either pay the others in the group cash or write them a check. You open yourself up to many, many problems sharing a bank account and/or money. Treat it like a business as far as income goes, but I would not recommend any type of formal business, LLC, partnership, sole proprietorship, etc. For federal taxes, you just keep track of how much "you" personally are paid and report that at the end of the year as income, most likely on a 1040EZ 1040SE, along with any other income you have. |
Pay off debt with RRSPs, or refinance and roll into Mortgage? | I would personally look at consolidating your debt at a lower interest rate by refinancing your mortgage. I would leave any retirement funds alone unless it was absolutely necessary to touch it with no other avenues available. However, once you have consolidated your debt into the mortgage I would pay more than the minimum amount so that you don't take too long to pay it off. I would put about 50% of the freed-up cash flow back into the repayments, that way you will be paying more debt off quicker and you will have additional cash flow to help your monthly budget. Another good point would be to go through your monthly budget to see if there is any expenses you could reduce or eliminate. |
Can I buy stocks directly from a public company? | If the company has a direct reinvestment plan or DRIP that they operate in house or contract out to a financial company to administer, yes. There can still be transaction fees, and none of these I know of offer real time trading. Your trade price will typically be defined in the plan as the opening or closing price on the trade date. Sometimes these plans offer odd lot sales at a recent running average price which could provide a hundred dollar or so arbitrage opportunity. |
Why does a stock's price fluctuate so often, even when fresh news isn't available? | according to me it's the news about a particular stock which makes people to buy or sell it mostly thus creates a fluctuation in price . It also dependents on the major stock holder. |
Paid cash for a car, but dealer wants to change price | I had a similar situation when I was in college. The difference was that the dealer agreed to finance and the bank they used wanted a higher interest rate from me because of my limited credit history. The dealer asked for a rate 5 percentage points higher than what they put on the paperwork. I told them that I would not pay that and I dropped the car off at the lot with a letter rescinding the sale. They weren't happy about that and eventually offered me financing at my original rate with a $1000 discount from the previously agreed-upon purchase price. What I learned through that experience is that I didn't do a good-enough job of negotiating the original price. I would suggest that your son stop answering phone calls from the dealership for at least 1 week and drive the car as much as possible in that time. If the dealer has cashed the check then that will be the end of it. He owes nothing further. If the dealer has not cashed the check, he should ask whether they prefer to keep the check or if they want the car with 1000 miles on the odometer. This only works if your son keeps his nerve and is willing to walk away from the car. |
At what point does it become worth it to file an insurance claim? | At what point can you not afford the repair, and how will that repair affect your home? In your scenario, you would be claiming $1, which I could agree is universally bad. A good tip is to raise the deductible to the point you feel you can cover on your own so you aren't tempted. (It would lower your premium too) This is what an emergency fund is for. In your examples, if you have $10K in an emergency fund, don't file a claim. If you have no emergency fund, and your roof is missing, I would suggest filing a claim. If you have no money, but the claim is to fix something that you could ignore (missing a back porch? Lock the back door and don't go out of it) then save the $10K and pay for it out of pocket. When it doubt, pay for it out of pocket if possible. |
Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan? | Loans do not carry an "interest balance". You can not pay off "all the interest". The only way to reduce the interest to zero is to pay off the loan. Otherwise, the interest due each month is some percentage of the outstanding principal. Think of it from the bank's perspective: they've invested some amount of money in you, and they expect a return on that investment in the form of interest. If you somehow paid in 16 years all the interest the bank expected to receive in 30 years, you've been scammed. |
why is the money withdrawn from traditional IRA taxed at the ordinary income tax rate? | This is actually (to me) an interesting point to note. While the answer is "that's what Congress wrote," there are implications to note. First, for many, the goal of tax deferral is to shift 25% or 28% income to 15% income at retirement. With long term gains at 15%, simply investing long term post tax can accomplish a similar goal, where all gain is taxed at 15%. Looking at this from another angle, an IRA (or 401(k) for that matter) effectively turns long term gains into ordinary income. It's a good observation, and shouldn't be ignored. |
Can I negotiate a 0% transaction fee with my credit card company? | There is nothing called free lunch. The 2% fee indirectly covers the cost of funds and in effect would be a personal loan. Further the repayment period would typically be 3 months and roughly would translate into 7-9% loan depending of repayment schedule etc. There is no harm in trying to get the fee waived, however one thing can lead to another and they may even go and do an credit inquiry etc, so be cautious. |
Can I prove having savings without giving out the account number? | If you're worried about the account number just take a statement and black out the account number with a Sharpie or the like. That is if the account number even appears on it, these days it often doesn't. |
Taxes and withholding on unpaid salary | As others have said, make sure you can and do file your taxes on a cash basis (not accrual). It sounds like it's very unlikely the company is going to issue you a 1099 for invoices they never paid you. So you just file last year's taxes based on your income, which is the money you actually received. If they do pay you later, in the new year, you'll include that income on next year's tax return, and you would expect a 1099 at that time. Side note: not getting paid is unfortunately common for consultants and contractors. Take the first unpaid invoice and sue them in small claims court. After you win (and collect!), tell them you'll sue them for each unpaid invoice in turn until they pay you in full. (You might need to break up the lawsuits like that to remain under the small claims limit.) |
High-risk investing is better for the young? Why? | The reason that you are advised to take more risk while you are young is because the risk is often correlated to a short investment horizon. Young people have 40-50 years to let their savings grow if they get started early enough. If you need the money in 5-15 years (near the end of your earning years), there is much more risk of a dip that will not correct itself before you need the money than if you don't need the money for 25-40 years (someone whose career is on the rise). The main focus for the young should be growth. Hedging your investments with gold might be a good strategy for someone who is worried about the volatility of other investments, but I would imagine that gold will only reduce your returns compared to small-cap stocks, for example. If you are looking for more risk, you can leverage some of your money and buy call options to increase the gains with upward market moves. |
Looking to buy a house in 1-2 years. Does starting a Roth IRA now make sense? | First, look at the local housing market, and the price to rent ratios. If you are comfortable that a house can be had for near to the cost of renting, and are not still dropping is price, then focus on the down-payment. I don't imagine housing prices to start picking up any time soon, so you don't be too rushed. If you feel like you have a longer time to save before you want to buy, I would focus as much money as I can into a retirement account while still saving for a down payment. Since you are young, you really want your retirement accounts working for you as soon as possible. You should not be investing in 3% stable funds, but the stock market index funds. Retirement is for 40 years in the future. Using funds for a down-payment from a retirement account should be a last resort. Remember this money is to provide you security later in life, not to get you into a house. When you take out money and put it into a house, it will not be appreciating nearly as fast. It is easy to say you will save later, but the money you save early in life will make up 50% or more of your funds when you retire. That is why it is critical to save for retirement as soon as possible. |
Option Trading / Demo Account | How would this trade behave IRL? I don't know how the simulation handles limit orders and bid/ask spreads to know it's feasible, but buying at 4.04 when the current ask is 8.00 seems unlikely. That would mean that all other sell orders between 8.00 and 4.04 were fulfilled, which means that there were very few sellers or that sell pressure spiked, both of which seem unlikely. In reality, it seems more likely that your order would have sat there until the ask dropped to $4.04 (if it ever did), and then you'd have to wait until the bid rose to $7.89 in order to sell them at that price. However, that kind of swing in option prices in not unrealistic. Options near at-the-money tend to move in price at about 50% of the change in the underlying, so if amazon suddenly dropped by $5, the option price could drop by $2.60 (from 6.66 to $4.04), and then rise back to $7.89 if the price rose $8 (which would be 1% swing and not unheard of intra-day). But it sounds like you got very lucky (or the simulation doesn't handle option trading realistically) - I've traded options in the past and have had some breaks similar to yours. I've also had bad breaks where I lost my entire investment (the options expire out-of-the money). So it should be a very limited part of your portfolio, and probably only used for risk management (e.g. buying put options to lock in some gains but keeping some upside potential). |
What should I do with my $10K windfall, given these options? | I think you've got competition on that list for where to put the money - I'd work out which option is costing me the most currently or will cost me the most in the future and take care of it. I'd be willing to bet that Eric is right, though, that it will need to be the roof. Not fixing it could cost you more in the long run than any of the other items on the list (assuming your circumstances remain roughly the same). General comments/other considerations: Any money that doesn't get spent on the roof (if any) - I would put in a rainy day fund. |
Is CFD a viable option for long-term trading? | Yes it is viable but uncommon. As with everything to do with investment, you have to know what you are doing and must have a plan. I have been successful with long term trading of CFDs for about 4 years now. It is true that the cost of financing to hold positions long term cuts into profits but so do the spreads when you trade frequently. What I have found works well for me is maintaining a portfolio that is low volatility, (e.g. picking a mix of positions that are negatively correlated) has a good sharpe ratio, sound fundamentals (i.e. co-integrated assets - or at least fairly stable correlations) then leveraging a modest amount. |
Is it better to buy this used car from Craigslist or from a dealership? | You seem to be on the right track. I feel, though, that it's worth addressing your maintenance budget. Even if both cars described in your question are from the same model year, one has been in service 2x more; one car has been on the road, in weather, twice as much as the other. I'm not sure what's being represented in the $6k of maintenance, but a whole host of systems can require maintenance or replacement at 200k+ miles. A/C compressor, all sorts of rubber parts (seals, hoses, belts, bushings), computer systems, stereo, window regulators, the list goes on. I don't know at what point the battery on a hybrid needs to be replaced, or what that replacement entails, but likely the battery or the hybrid recharge system will require something after 200k miles of service. I would learn more about what actual maintenance a high mileage prius can experience. To answer your question though, at this level of "used" I don't think the dealership adds anything to the equation. When you're buying certified pre-owned, the dealership/manufacturer relationship and warranty can be meaningful. When you're buying a 100k+ miles car from a random small used car lot it might as well be a stranger on craigslist... |
Auto loan and student loan balance | I don't understand the calculations in the comments by the OP. He says My monthly savings after mandatory expense is around USD 2000. This includes rent, expenses, emergency fund savings, and the monthly required payment of my auto loan. (emphasis added) He has $2000 USD left over after monthly expenses (which includes rent, food, utilities etc, contribution towards emergency funds, and the required monthly payment on the auto loan). He claims that by applying the $2000 USD per month towards reducing the debt, it would take him 30-36 months to be debt-free. But is it not the case that applying the $2000 to the student loan of $18K+ (while continuing to make the auto loan payments) will pay the student loan off in less than 10 months? If no payments are made on that $18K+ student loan, the accrued interest of about $2K in 10 months (this is (18.25*13.7%*)(10/12) for a total of $20K+). In actuality, with the loan being paid down, the interest will be much less. Once the student loan is paid off, the extra $2000 can go towards what is left of the $10K auto loan each month and pay it off in another 4 or 5 months or so. So we are talking of 15 months max instead of 30-36 months. Of course, as Carlos Briebiescas points out, the car is more valuable as an asset than can be sold in case of job loss creating a need for cash etc, and so paying it off first might be better, but that is a different calculation. |
What is a straddle? | Came across this very nice video which explains the "Long Straddle". Thought will share the link here: http://www.khanacademy.org/finance-economics/core-finance/v/long-straddle |
What is a clearing bank, in specific, what does RMB clearing bank do? | Clearing means processing unsettled transactions. Specifically - all the money transfers between the banks, in this case. Clearing Bank for RMB business means that all RMB transactions will be cleared through that specific bank. If bank A in Hong Kong gets a check drawn on Bank B in Hong Kong, and the check is in RMB - A will go to the BoC with the check and will get the money, and BoC will take the money from B. That obviously requires both A and B have accounts with BoC. "Sole" clearing house means there's only one. I.e.: in our example, A and B cannot settle the check through C where they both happen to have accounts, or directly with each other. They MUST utilize the services of BoC. |
List of Investments from safest to riskiest? | With every caveat that Rick said plus many many more lets have some fun. One common way to measure risk is volatility of returns roughly how much the value of your asset jumps around. Interestingly, the following ordering is fairly similar for many other common measures of risk. The first three on the list would be mostly interchangeable. Generally, putting your money in "cash" investments has no real day-to-day price variability and the main risk is that the bank won't give you your money back at the end. Money market funds are last as they can "Break the buck". To get a feel for the next few on the list I'm using previous 360 day volatility numbers for representative broad indices (asof 2014-10-27). While these volatility values can move around quite a bit, the order is actually remarkably stable. Hedge funds might seem out of place here, but remember that hedge funds can hold be long and short at the same time and this can cancel out daily variation. However, Hedge funds do have plenty of risks that may not be well accounted for by this measure. For derivatives I'll refer to back to Rick's answer. This is a measure for broad investment in these categories your particular investment in Long-term Capital Management or Argentine Bonds may vary. It is important to note that your return on your investment generally grows as you go toward more risky investments down this list as people generally expect to be rewarded in the long term for risky investments. |
How should I prepare for the next financial crisis? | A somewhat provocative (but not unserious) proposal: Rent, don't buy a house to live in. In 2007/8, the thing that got many people in deep trouble is their mortgage. It's not a productive investment but a speculative bet on what was in fact a bubble and a class of assets that is notoriously slow to recover after a slump. Before thinking about your savings or buying into silly ideas about gold, you should realise that as a middle class worker, the biggest risk after a crisis is losing your job. Renting your accommodation means being able to downgrade or move very quickly and not being forced to sell a house at the worse possible time. If you really do need to liquidate some of your investments at a bad time, having a more diversified portfolio means that you are not losing everything to meet some short-term obligations. Assuming you're in the US, this means forgoing some nice tax advantages that might be too tempting to resist (I'm not so I am basing this on what I read on this site) but, bubbles aside, there is nothing that makes real estate a particularly good investment as such, especially if you also live in the house you're buying. You might very well come out on top but you expose yourself to several risks and are less prepared to face a crisis. |
ACH processing time of day | Each bank is different, so your question needs to be more specific. For instance, I believe Paypal and Chase settles at 7pm EST on business days. Bank of America at 5PM. |
Events that cause major movement in forex? | Anything related to the central bank will have a large impact, as they are the ones who determine interest rates, and interest rates have a big effect on currency flows. GDP is also important, as when there is an economic slowdown it may result in the central bank reducing rates to boost economic activity. The opposite is also true, large increases in GDP may mean that an interest rate hike might be needed. Inflation data is also very important. Again, large changes in inflation either way may push the central bank towards changing rates. This data typically is in the form of CPI Note that each central bank is different. They all have specific mandates and specific pieces of economic data that they place emphasis on. The Federal Reserve as of late has closely been watching inflation data, especially wage inflation data, and employment. Significant deviations in these data points from whats expected by investors can greatly move the market. However, these specific factors are a little less important for, say, Mexico, which is mostly concerned with headline inflation. Read the statements issued by the central banks to find out whats important to them. Central banks also issue expectations for things like growth, CPI, etc. If these expectations are not met, it may result in a policy change, or at least talk of a policy change, at the next meeting of the central bank. Anticipating these policy changes and trading accordingly is one strategy to be a profitable forex trader Also, there are several forex news calendars online that indicate what is likely to be high impact news. These can be helpful starting out. |
How risky is it to keep my emergency fund in stocks? | This is basically the short-term/long-term savings question in another form: savings that you hope are long-term but which may turn short-term very suddenly. You can never completely eliminate the risk of being forced to draw on long term savings during a period when the market is doing Something Unpleasant that would force you to take a loss (or right before it does Something Pleasant that you'd like to be fully invested during). You can only pick the degree of risk that you're willing to accept, balancing that hazard of forced sales against the lower-but-more-certain returns you'd get from a money market or equivalent. I'm considered a moderately aggressive investor -- which doesn't mean I'm pushing the boundaries on what I'm buying (not by a long shot!), but which does mean I'm willing to keep more of my money in the market and I'm more likely to hold or buy into a dip than to sell off to try to minimize losses. That level of risk-tolerance also means I'm willing to maintain a ready-cash pool which is sufficient to handle expected emergencies (order of $10K), and not become overly paranoid about lost opportunity value if it turns out that I need to pull a few thou out of the investments. I've got decent health insurance, which helps reduce that risk. I'm also not particularly paranoid about the money. On my current track, I should be able to maintain my current lifestyle "forever" without ever touching the principal, as long as inflation and returns remain vaguely reasonable. Having to hit the account for a larger emergency at an Inconvenient Time wouldn't be likely to hurt me too much -- delaying retirement for a year or two, perhaps. It's just money. Emergencies are one of the things it's for. I try not to be stupid about it, but I also try not to stress about it more than I must. |
Should I invest in real estate to rent, real estate to live in, or just stocks and bonds to earn 10-15%? | To be completely honest, I think that a target of 10-15% is very high and if there were an easy way to attain it, everyone would do it. If you want to have such a high return, you'll always have the risk of losing the same amount of money. Option 1 I personally think that you can make the highest return if you invest in real estate, and actively manage your property(s). If you do this well with short term rental and/or Airbnb I think you can make healthy returns BUT it will cost a lot of time and effort which may diminish its appeal. Think about talking to your estate agent to find renters, or always ensuring your AirBnB place is in good nick so you get a high rating and keep getting good customers. If you're looking for "passive" income, I don't think this is a good choice. Also make sure you take note of karancan's point of costs. No matter what you plan for, your costs will always be higher than you think. Think about water damage, a tenant that breaks things/doesn't take care of stuff etc. Option 2 I think taking a loan is unnecessarily risky if you're in good financial shape (as it seems), unless you're gonna buy a house with a mortgage and live in it. Option 3 I think your best option is to buy bonds and shares. You can follow karancan's 100 minus your age rule, which seems very reasonable (personally I invest all my money in shares because that's how my father brought me up, but it's really a matter of taste. Both can be risky though bonds are usually safer). I think I should note that you cannot expect a return of 10% or more because, as everyone always says, if there were a way to guarantee it, everyone would do it. You say you don't have any idea how this works so I'd go to my bank and ask them. You probably have access to private banking so that should mean someone will be able to sit you down and talk you through. Also look at other banks that have better rates and/or pretend you're leaving your bank to negotiate a better deal. If I were you I'd invest in blue chips (big international companies listed on the main indeces (DAX, FTSE 100, Dow Jones)), or (passively managed) mutual funds/ETFs that track these indeces. Just remember to diversify by country and industry a bit. Note: i would not buy the vehicles/plans that my bank (no matter what they promise, and they promise a lot) suggest because if you do that then the bank always takes a cut off your money. TlDr, dont expect to make 10-15% on a passive investment and do what a lot of others do: shares and bonds. Also make sure you get a lot of peoples opinions :) |
How are the best way to make and save money at 22 years old | Fantastic question to be asking at the age of 22! A very wise man suggested to me the following with regard to your net income I've purposely not included saving a sum of money for a house deposit, as this is very much cultural and lots of EU countries have a low rate of home ownership. On the education versus entrepreneur question. I don't think these are mutually exclusive. I am a big advocate of education (I have a B.Eng) but have following working in the real world for a number of years have started an IT business in data analytics. My business partner and I saw a gap in the market and have exploited it. I continue to educate myself now in short courses on running business, data analytics and investment. My business partner did things the otherway around, starting the company first, then getting an M.Sc. Other posters have suggested that investing your money personally is a bad idea. I think it is a very good idea to take control of your own destiny and choose how you will invest your money. I would say similarly that giving your money to someone else who will sometimes lose you money and will charge you for the privilege is a bad idea. Also putting your money in a box under your bed or in the bank and receive interest that is less than inflation are bad ideas. You need to choose where to invest your money otherwise you will gain no advantage from the savings and inflation will erode your buying power. I would suggest that you educate yourself in the investment options that are available to you and those that suit you personality and life circumstances. Here are some notes on learning about stock market trading/investing if you choose to take that direction along with some books for self learning. |
Why are wire transfers and other financial services in Canada so much more expensive than in Europe? | because bankers are crooks is a very close answer. Just accept the truth that financial industry is the only service industry that could turn into giant parasite chopping pieces from real economy. I am not anti-financial, because greed is not banker's fault, but just one significant part of human nature. Every human being has greed and fear built in it. But financial industry is the only one which is built on exploiting greed and fear. Governments are throwing gasoline canister into that fire in desperate extinguish attempts, trying to "regulate" but only making it worse. With all that "counter-cybercrime", "counter-terrorism" and "counter-everything" efforts, ordinary people will be hurt as always. |
Advice for opening an IRA as a newbie | As other people have indicated, traditional IRAs are tax deductable for a particular year. Please note, though, that traditional IRAs are tax deferred (not tax-free) accounts, meaning that you'll have to pay taxes on any money you take out later regardless of why you're making the withdrawal. (A lot of people mistakenly call them tax free, which they're not). There is no such thing as a "tax-free" retirement account. Really, in terms of Roth vs. Traditional IRAs, it's "pay now or pay later." With the exception of special circumstances like this, I recommend investing exclusively in Roth IRAs for money that you expect to grow much (or that you expect to produce substantial income over time). Just to add a few thoughts on what to actually invest in once you open your IRA, I strongly agree with the advice that you invest mostly in low-cost mutual funds or index funds. The advantage of an open-ended mutual fund is that it's easier to purchase them in odd increments and you may be able to avoid at least some purchase fees, whereas with an ETF you have to buy in multiples of that day's asking price. For example, if you were investing $500 and the ETF costs $200 per share, you could only purchase 2 shares, leaving $100 uninvested (minus whatever fee your broker charged for the purchase). The advantage of an ETF is that it's easy to buy or sell quickly. Usually, when you add money to a mutual fund, it'll take a few days for it to hit your account, and when you want to sell it'll similarly take a few days for you to get your money; when I buy an ETF the transaction can occur almost instantly. The fees can also be lower (if the ETF is just a passive index fund). Also, there's a risk with open-ended mutual funds that if too many people pull money out at once the managers could be forced to sell stocks at an unfavorable price. |
In what cases can a business refuse to take cash? | Apartment complexes have had a long history of not accepting cash for payment of rent. This eliminates the problem of robbery and strongly reduces the risks of embezzlement. THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE Article 1, Section 10 of the US Constitution states: No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts Previous editions of banknotes stated that the notes were redeemable in gold or in lawful money. The Mint Act of 1792 set gold and silver as legal currency (and that one did not have to accept "base metal coins" for more than $10 which is why coin rolls only go up to $10). The Coinage Act of 1873 dropped silver and made gold the legal standard for currency. In 1933, the "redeemable in gold" was changed by federal statute and the legend you mention was added. Prior to 1933, someone could demand that you pay them in gold and not with a bank note. Legislation in 1933 ended that. This clause in the Constitution leads some political groups to wish to return to a gold standard. I recommend reading the book Greenback as it describes how our currency got the way it did and why that clause appears on currency. |
First Job, should I save or invest? | There is no absolute answer to this as it depends on your particular situation, but some tips: As to investing versus saving, you need to do some of both: Be careful about stockpiling too much in bank accounts. Inflation will eat that money up over time to the tune of 3-4%/year. You are young and have a longer investment horizon for retirement, take advantage of that and accept a little more risk while you can. |
Why are American-style options worth more than European-style options? | Think of it this way, if you traveled back through time one month - with perfect knowledge of AAPL's stock price over that period - which happens to peak viciously then return to its old price at the end of the period - wouldn't you pay more for an American option? Another way to think about options is as an insurance policy. Wouldn't you pay more for a policy that covered fire and earthquake losses as opposed to just losses from earthquakes? Lastly - and perhaps most directly - one of the more common reasons people exercise (as opposed to sell) an American option before expiration is if an unexpected dividend (larger than remaining time value of the option) was just announced that's going to be paid before the option contract expires. Because only actual stockholders get the dividends, not options holders. A holder of an American option has the ability to exercise in time to grab that dividend - a European option holder doesn't have that ability. Less flexibility (what you're paying for really) = lower option premium. |
Tax on Stocks or ETF's | No, not really. This depends on the situation and the taxing jurisdiction. Different countries have different laws, and some countries have different laws for different situations. For example, in the US, some investments will be taxed as you described, others will be taxed as "mark to market", i.e.: based on the FMV difference between the end of the year and the beginning of the year, and without you actually making any transactions. Depends on the situation. |
What to do if a state and federal refund is denied direct deposit? | It is not allowed to pay refunds to anyone other than the taxpayer. This is due to various tax return fraud schemes that were running around. Banks are required to enforce this. If the direct deposit is denied, a check will be issued. In her name, obviously. What she does with it when she gets it is her business - but I believe that tax refund checks may not be just "endorsed", the bank will likely want to see her when you deposit it to your account, even if it is endorsed. For the same reason. |
Dispute credit card transaction with merchant or credit card company? | Most merchants (also in Europe) are reasonable, and typically are willing to work with you. credit card companies ask if you tried to work with the merchant first, so although they do not enforce it, it should be the first try. I recommend to give it a try and contact them first. If it doesn't work, you can always go to the credit card company and have the charge reversed. None of this has any effect on your credit score (except if you do nothing and then don't pay your credit card bill). For the future: when a transaction supposedly 'doesn't go through', have them write this on the receipt and give it to you. Only then pay cash. I am travelling 100+ days a year in Europe, using my US credit cards all the time, and there were never any issues - this is not a common problem. |
Transferring money between two banks | The US (in fact the global) banking industry is subject to Anti-Money Laundering & Counter-Terrorism funding laws, slowing down funds transfer eliminates a great deal of fraud. |
Is it worth buying real estate just to safely invest money? | You are mixing issues here. And it's tough for members to answer without more detail, the current mortgage rate in your country, for one. It's also interesting to parse out your question. "I wish to safely invest money. Should I invest in real estate." But then the text offers that it's not an investment, it's a home to live in. This is where the trouble is. And it effectively creates 2 questions to address. The real question - Buy vs Rent. I know you mentioned Euros. Fortunately, mortgages aren't going to be too different, lower/higher, and tax consequence, but all can be adjusted. The New York Times offered a beautiful infographing calculator Is It Better to Rent or Buy? For those not interested in viewing it, they run the math, and the simple punchline is this - The home/rent ratio can have an incredibly wide range. I've read real estate blogs that say the rent should be 2% of the home value. That's a 4 to 1 home/rent (per year). A neighbor rented his higher end home, and the ratio was over 25 to 1. i.e. the rent for the year was about 4% the value of the home. It's this range that makes the choice less than obvious. The second part of your question is how to stay safely invested if you fear your own currency will collapse. That quickly morphs into too speculative a question. Some will quickly say "gold" and others would point out that a stockpile of weapons, ammo, and food would be the best choice to survive that. |
Currently sole owner of a property. My girlfriend is looking to move in with me and is offering to pay 'rent'. Am I at risk here? | Edit #2 My whole answer was based on my misunderstanding that you were renting out a totally separate property to your girl friend. I finally understand now that you're renting out a room in YOUR apartment flat to your gf. So, based on my new understanding, I don't think it's necessarily a bad idea. The answer below is my answer to a different question ;) Original Answer My answer has nothing to do with business, but is totally relationship based. If you care about her in a "we might be together a long time" way, then I wouldn't do this. I don't care what arrangements you setup before hand, at some point, you're bound to feel like she owes you something at some point. Let alone the easiest of situations to imagine (she's late on the rent, she loses her job and can't pay, etc) you'll be forced to make decisions about how much your desire to love and care for her outweighs your need to pay your mortgage. You can argue how magnanimous your are all day long, but is this something you want to bring into your relationship? Now, if you don't really care to stay with her that long and you could do life with or without her, then go for it. I think the big question is, is your relationship worth £200? Edit In the interest of supporting my opinion, here are a few articles I found on the subject: Unfortunately, the way renting to friends or family often works out is far from what would be expected between people who care about one another. For the most part, friends and family members will actually make bad renters, because they’ll expect more from you than a tenant who doesn’t know you. You may get a lot of requests for maintenance and repairs, even for minor things, and you may also find that family members and friends think they should be entitled to perks because of your personal relationship with them. When they don’t get special treatment, they can get angry with you, and that hurts both your professional relationship and your personal relationship. American Apartment Owners Association "In my experience, landlords renting to relatives doesn't work out perfectly," said Ceyhun Doker, a REALTOR® associate at Keller Williams Realty in Burlingame, CA. "When you don't know each other, there are fewer problems." realator.com |
How to know which companies enter the stock market? | Thanks to the other answers, I now know what to google for. Frankfurt Stock Exchange: http://en.boerse-frankfurt.de/equities/newissues London Stock Exchange: http://www.londonstockexchange.com/statistics/new-issues-further-issues/new-issues-further-issues.htm |
Changing Bank Account Number regularly to reduce fraud | Couple of my friends went through a fraud agent who ran off with their money and the landlords were none the wiser. So it always pays to be a bit diligent. Are they a well known letting agents nationally ? Many agents do have different accounts to manage their properties. Yours seems a case as such probably i.e. they manage the property on behalf of the landlord so keeping their monies differentiated. Did you sign an agreement ? If yes go through what is written in the agreement, most of it is same in all agreements but have a look anyway. Check if there is mention of deposit protection scheme. One thing you could do is go to a bank to do the transfer, the same bank where the letting agent holds their account and confirm from them if it is really a personal account or a business account. I am not sure how possible it is, but doesn't hurt to ask. If it is a personal account, then fraud is the most possible cause. The sort code should tell you which branch and which bank. Or the best option is to ask the estate agents to show a recent statement of the bank account, where the money is to be deposited into. Some tips |
Should I accept shares as payment? | For one, the startup doesn't exist yet, so until March I will get nothing on hand, though I have enough reserves to bridge that time. I would not take this deal unless the start-up exists in some form. If it's just not yet profitable, then there's a risk/reward to consider. If it doesn't exist at all, then it cannot make a legal obligation to you and it's not worth taking the deal yet. If everything else is an acceptable risk to you, then you should be asking the other party to create the company and formalize the agreement with you. As regards reserves, if you're really getting paid in shares instead of cash, then you may need them later. Shares in a start-up likely are not easy to sell (if you're allowed to sell them at all), so it may be a while before a paycheck given what you've described. For a second, who pays the tax? This is my first non-university job so I don't exactly know, but usually the employer has to/does pay my taxes and some other stuff from my brutto-income (that's what I understood). If brutto=netto, where is the tax? This I cannot answer for Germany. In the U.S. it would depend in part on how the company is organized. It's likely that some or all of the tax will be deferred until you monetize your shares, but you should get some professional advice on that before you move forward. As an example, it's likely that you'd get taxed (in part or in whole) on what we'd call capital gains (maybe Abgeltungsteuer in German?) that would only be assessed when you sell the shares. For third, shares are a risk. If I or any other in the startup screw really, my pay might be a lot less than expected. Of course, if it works out I'm rich(er). This is the inherent risk of a start-up, so there's no getting around the fact that there's a chance that the business may fail and your shares become worthless. Up to you if you think the risk is acceptable. Where you can mitigate risk is in ensuring that there's a well-written and enforceable set of documents that define what rights go with the shares, who controls the company, how profits will be distributed, etc. Don't do this by spoken agreement only. Get it all written down, and then get it checked by a lawyer representing your interests. |
Expecting to move in five years; how to lock mortgage rates? | Outside of broadly hedging interest rate risk as I mentioned in my other answer, there may be a way that you could do what you are asking more directly: You may be able to commit to purchasing a house/condo in a pre-construction phase, where your bank may be willing to lock in a mortgage for you at today's rates. The mortgage wouldn't actually be required until you take ownership from the builder, but the rates would be set in advance. Some caveats for this approach: (1) You would need to know the house/condo you want to move into in advance, and you would be committing to that move today. (2) The bank may not be willing to commit to rates that far in advance. (3) Construction would likely take far less than 5 years, unless you are buying a condo (which is the reason I mention condos specifically). (4) You are also committing to the price you are paying for your property. This hedges you somewhat against price fluctuation in your future area, but because you currently own property, you are already somewhat hedged against property price fluctuation, meaning this is taking on additional risk. The 'savings' associated with this plan as they relate to your original question (which are really just hedging against interest rate fluctuations) are far outweighed by the external pros and cons associated with buying property in advance like this. By that I mean - if it was something else you were already considering, this might be a (small) tick in the "Pro" column, but otherwise is far too committal / complex to be considered for interest rate hedging on its own. |
Possibility to buy index funds and individual funds in a Canadian TFSA | This page from the CRA website details the types of investments you can hold in a TFSA. You can hold individual shares, including ETFs, traded on any "designated stock exchange" in addition to the other types of investment you have listed. Here is a list of designated stock exchanges provided by the Department of Finance. As you can see, it includes pretty well every major stock exchange in the developed world. If your bank's TFSA only offers "mutual funds, GICs and saving deposits" then you need to open a TFSA with a different bank or a stock broking company with an execution only service that offers TFSA accounts. Almost all of the big banks will do this. I use Scotia iTrade, HSBC Invest Direct, and TD, though my TFSA's are all with HSBC currently. You will simply provide them with details of your bank account in order to facilitate money transfers/TFSA contributions. Since purchasing foreign shares involves changing your Canadian dollars into a foreign currency, one thing to watch out for when purchasing foreign shares is the potential for high foreign exchange spreads. They can be excessive in proportion to the investment being made. My experience is that HSBC offers by far the best spreads on FX, but you need to exchange a minimum of $10,000 in order to obtain a decent spread (typically between 0.25% and 0.5%). You may also wish to note that you can buy unhedged ETFs for the US and European markets on the Toronto exchange. This means you are paying next to nothing on the spread, though you obviously are still carrying the currency risk. For example, an unhedged S&P500 trades under the code ZSP (BMO unhedged) or XUS (iShares unhedged). In addition, it is important to consider that commissions for trades on foreign markets may be much higher than those on a Canadian exchange. This is not always the case. HSBC charge me a flat rate of $6.88 for both Toronto and New York trades, but for London they would charge up to 0.5% depending on the size of the trade. Some foreign exchanges carry additional trading costs. For example, London has a 0.5% stamp duty on purchases. EDIT One final thing worth mentioning is that, in my experience, holding US securities means that you will be required to register with the US tax authorities and with those US exchanges upon which you are trading. This just means fill out a number of different forms which will be provided by your stock broker. Exchange registrations can be done electronically, however US tax authority registration must be submitted in writing. Dividends you receive will be net of US withholding taxes. I am not aware of any capital gains reporting requirements to US authorities. |
Effective returns on investment in housing vs other financial instruments | The assumption that house value appreciates 5% per year is unrealistic. Over the very long term, real house prices has stayed approximately constant. A house that is 10 years old today is 11 years old a year after, so this phenomenon of real house prices staying constant applies only to the market as a whole and not to an individual house, unless the individual house is maintained well. One house is an extremely poorly diversified investment. What if the house you buy turns out to have a mold problem? You can lose your investment almost overnight. In contrast to this, it is extremely unlikely that the same could happen on a well-diversified stock portfolio (although it can happen on an individual stock). Thus, if non-leveraged stock portfolio has a nominal return of 8% over the long term, I would demand higher return, say 10%, from a non-leveraged investment to an individual house because of the greater risks. If you have the ability to diversify your real estate investments, a portfolio of diversified real estate investments is safer than a diversified stock portfolio, so I would demand a nominal return of 6% over the long term from such a diversified portfolio. To decide if it's better to buy a house or to live in rental property, you need to gather all of the costs of both options (including the opportunity cost of the capital which you could otherwise invest elsewhere). The real return of buying a house instead of renting it comes from the fact that you do not need to pay rent, not from the fact that house prices tend to appreciate (which they won't do more than inflation over a very long term). For my case, I live in Finland in a special case of near-rental property where you pay 15% of the building cost when moving in (and get the 15% payment back when moving out) and then pay a monthly rent that is lower than the market rent. The property is subsidized by government-provided loans. I have calculated that for my case, living in this property makes more sense than purchasing a market-priced house, but your situation may be different. |
Can my brother fix his credit? | In a nutshell, not really. That's the risk you take when you co-sign for someone. The lender only made the loan because of the strength of your brother's credit, not your mother's, so his reputation (in the form of his credit rating) is going to take the hit because of his mother's behaviors. The one thing he can do is this: The credit bureaus allow you to add a comment or explanation to your credit file which may be helpful, provided potential creditors read it, which is never a guarantee. It's worth trying though, so suggest to him to look into it. Here's a link for him/you/anyone to look at that can help explain how this works and what effects it can have: Adding a comment to your credit file for negative items I hope this helps. Good luck! |
A debt collector will not allow me to pay a debt, what steps should I take? | This doesn't seem to explain the odd behavior of the collector, but I wanted to point out that the debt collector might not actually own the debt. If this is the case then your creditor is still the original institution, and the collector may or may not be allowed to actually collect. Contact the original creditor and ask how you can pay off the debt. |
Wisest option to pay for second career education | Your first step should be to visit with the financial aid office of the university that you are considering attending, perhaps even before filling out the FAFSA. You may be eligible for grants, scholarships, and subsidized loans, as well as unsubsidized loans. You should pursue the first two options first, and then when you know how much remains to be financed, we can evaluate which of your investments you might liquidate if further financing is needed. There are a range of views on debt on this board. I take a very cautious approach to going in to debt. I worked full-time and took night classes to finish my degree without debt, but depending on your program that might not be an option. It seems that you also have a healthy relationship with debt considering the shape of your savings and finances as outlined above. Apart from the above information about how much money could be obtained and at what interest rates, the other missing information is your current salary, and your expected salary range after completing the program. With all of that information I could make specific recommendations, but at this point, my only recommendation is to avoid liquidating any retirement accounts in your effort to invest in yourself if at all possible. |
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. |
Is capturing a loss a unique opportunity? | I agree, one should not let the tax tail wag the investing dog. The only question should be whether he'd buy the stock at today's price. If he wishes to own it long term, he keeps it. To take the loss this year, he'd have to sell soon, and can't buy it back for 30 days. If, for whatever reason, the stock comes back a bit, he's going to buy in higher. To be clear, the story changes for ETFs or mutual funds. You can buy a fund to replace one you're selling, capture the loss, and easily not run afoul of wash sale rules. |
I cosigned for a friend who is not paying the payment | Cosigning is explicitly a promise that you will make the payments if the primary signer can not. Don't do it unless you are able to handle the cost and trust the other party will "make you whole" when they can... which means don't do it for anyone you would not lend your money to, since it comes out to about the same level of risk. Having agreed, you're sorta stuck with your ex-friend's problem. I recommend talking to a lawyer about the safest way get out of this. It isn't clear you can even sue the ex-friend at this point. |
How can online trading platforms be trustworthly? | In most countries trading platforms are legally required to be overseen by a regulator, in the US this is the SEC (Securities and Exchanges Commission). This regulatory oversight is required in order to operate (i.e. have clients) in that country and the company will lose the right to operate in that country if they do not comply with the regulations. If you believe that you have genuine cause to complain that a trading platform that you are using within your jurisdiction is behaving unfairly towards you you can report this to the regulator and they will investigate so long as you can provide them with some concrete evidence. Note that in many jurisdictions gambling websites are also regulated (they are in the UK for example) and so arguments about their fairness are specious. A big problem with a lot of these complaints is that people who lose money are very vocal about blaming everyone else, people who make money are very vocal about their own amazing skills... think about that! |
Should you keep your stocks if you are too late to sell? | The standard answer on any long term stock is hold on during the rough times. You have not lost anything until you sell. If your concern is just that you are not certain where the stock price is headed, unless you need the money now and can not afford to hold on to the stock then I would hold it. |
How does a public company issue new shares without diluting the value held by existing shareholders? | As others have posted, the company gains capital in return for its new shares. However, the share price can still fall. The problem is that the share marked is affected by supply and demand like any other marked. If the company just issues the new shares at marked price, they will have problems finding buyers. The people who are willing to pay that price has already bought as many shares as they want. The company does this to raise capital, and depends on the shares actually selling for this to work. So, they issue shares at below marked price to attract buyers and the shares get diluted. In the end the share will usually end up somewhere between the old marked price and the issue price. The old share owners are probably not too happy about this and will not accept this plan. (At least here in Norway, share issue has to be accepted at a shareholder meeting) So, what is often done instead is to issue buy options for the required number of shares at the below-marked price. These options are given (for free) to the current share holders proportional to their current holding. If everybody exercises their options they get new cheap shares that compensates for the loss of share value. If they don't have the capital themselves, they can sell the options and get compensation that way instead. |
Buy tires and keep car for 12-36 months, or replace car now? | Would you buy this used car, in its current condition but with new tires, for the price of the tires? If so, buy the tires. |
Calculating the value of an investors inventory | Is it just -34*4.58= -$155.72 for CCC and -11*0.41= -$4.51 for DDD? Yes it needs to be recorded as negative because at some point in time, the investor will have to spend money to buy these shares [cover the short sell and return the borrowed shares]. Whether the investor made profit or loss will not be reflected as you are only reflecting the current share inventory. |
Any experience with maxing out 401(k)? | Yes, I have done this and did not feel a change in cash flow - but I didn't do it a the age of 23. I did it at a time when it was comfortable to do so. I should have done it sooner and I strongly encourage you to do so. Another consideration: Is your companies program a good one? if it is not among the best at providing good funds with low fees then you should consider only putting 6% into your employer account to get the match. Above that dollar amount start your own ROTH IRA at the brokerage of your choice and invest the rest there. The fee difference can be considerable amounting to theoretically much higher returns over a long time period. If you choose to do the max , You would not want to max out before the end of the year. Calculate your deferral very carefully to make sure you at least put in 6% deferral on every paycheck to the end of the year. Otherwise you may miss out on your company match. It is wise to consider a ROTH but it is extremely tough to know if it will be good for you or not. It all depends on what kind of taxes (payroll, VAT, etc) you pay now and what you will pay in the future. On the other hand the potential for tax-free capital accumulation is very nice so it seems you should trend toward Roth. |
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. |
How smart is it really to take out a loan right now? | The logic "the interest rate on the mortgage was so low it didn't make sense not to buy" is one reason the housing bubble happened. The logic was that it made the house affordable even at high prices. Once the prices collapsed people still had affordable payments, but were unable to sell because they were upside down on the mortgage. If you can refinance to a 15-year mortgage, or from a adjustable mortgage to a fixed rate mortgage. it can make sense. You can save on the monthly payment, and on the total cost of the mortgage. But don't buy to take advantage of rates; or to save on taxes; or to build a guaranteed equity. These can be false economies or things that can't be gaurenteed. Of course if nobody spends money, the economy will stay poor. As to hidden details. Only purchase housing you want to own for the long haul. If you expect to flip it in a few years, you might not be able to. You might end up stuck as a long distance landlord. |
Car dealer saying that they cannot see any credit information for my co-applicant. Could this be a scam? | I actually had a similar situation when I tried to buy my house. I paid off all my loans and was proud of my "debt free" status. I had no car note, no student loans... absolutely no debt, but I did have a bank-issued credit card. (USAA, not Chase, but I assume the same may apply). When I tried to get a home loan they told me I had "absolutely no information on my credit report." AKA I had no credit. The mortgage lender had no idea what was going on, nor did I or anybody else. It took a lot of research before I realized that the credit bureaus use a formula for the credit rating that involves a lot of things, but if you haven't had a current line of credit reported to the agency in over a year (maybe it was longer, I didn't have anything for 3 years) you aren't going to have a credit score. Because I was "debt free" I was also credit report free and eventually the credit bureaus had nothing to go on, and my score disappeared. The bank-issued credit card was on my credit report, but they didn't report monthly balances so the bureaus couldn't use it to determine if I was paying off the card or if I even had a balance on it. It was essentially not doing my credit any favors, despite what I had thought. In short, based on the fact that you have no debt in her name, and you have taken on all debt in your own name, its very plausible that she has no credit rating anymore. It won't take long to get it back. Once you have ANYTHING on your credit that's actually reported the formula can kick back in and look at credit history as well as current credit and she'll be fine. |
Short term parking of a large inheritance? | Safe short term and "pay almost nothing" go hand in hand. Anything that is safe for the short term will not pay much in interest/appreciation. If you don't know what to do, putting it in a savings account is the safest thing. The purpose of that isn't to earn money, it's just to store the money while you figure out where to move it to earn money. |
Can I trust the Motley Fool? | I've had a MF Stock Advisor for 7 or 8 years now, and I've belong to Supernova for a couple of years. I also have money in one of their mutual funds. "The Fool" has a lot of very good educational information available, especially for people who are new to investing. Many people do not understand that Wall Street is in the business of making money for Wall Street, not making money for investors. I have stayed with the Fool because their philosophy aligns with my personal investment philosophy. I look at the Stock Advisor picks; sometimes I buy them, sometimes I don't, but the analysis is very good. They also have been good at tracking their picks over time, and writing updates when specific stocks drop a certain amount. With their help, I've assembled a portfolio that I don't have to spend too much time managing, and have done pretty well from a return perspective. Stock Advisor also has a good set of forums where you can interact with other investors. In summary, the view from the inside has been pretty good. From the outside, I think their marketing is a reflection of the fact that most people aren't very interested in a rational & conservative approach to investing in the stock market, so MF chooses to go for an approach that gets more traffic. I'm not particularly excited about it, but I'm sure they've done AB testing and have figured out what way works the best. I think that they have had money-back guarantees on some of their programs in the past, so you could try them out risk free. Not sure if those are still around. |
Why is the stock market closed on the weekend? | Simply, most of the above given 'answers' are mere 'justifications' for a practice that has become anachronistic. It did make sense once in the past, but not any more. Computers and networks can run non-stop 24/7; even though the same human beings cannot be expected to work 24/7, we have invented the beautiful concept of multiple shifts; banks may be closed during nights and weekends, but banking is never closed in the internet era; ...The answer must lie in the vested interests of a few stakeholder groups - or - it could just be our difficult to change habits. |
How to find historical stock price for a de-listed or defunct company? | Such data is typically only available from paid sources due to the amount of research involved in determining the identity of delisted securities, surviving entities in merger scenarios, company name changes, symbol changes, listing venue changes, research of all capital events such as splits, and to ensure that the data coverage is complete. Many stocks that are delisted from a major exchange due to financial difficulties are still publicly tradeable companies with their continuing to trade as "OTC" shares. Some large companies even have periods where they traded for a period of their history as OTC. This happened to NYSE:NAV (Navistar) from Feb 2007 to July 2008, where they were delisted due to accounting statement inaccuracies and auditor difficulties. In the case of Macromedia, it was listed on NASDAQ 13 Dec 1993 and had its final day of trading on 2 Dec 2005. It had one stock split (2:1) with ex-date of 16 Oct 1995 and no dividends were ever paid. Other companies are harder to find. For example, the bankrupt General Motors (was NYSE:GM) became Motoros Liquidation Corp (OTC:MTLQQ) and traded that way for almost 21 months before finally delisting. In mergers, there are in two (or more) entities - one surviving entity and one (or more) delisted entity. In demergers/spinoffs there are two (or more) entities - one that continues the capital structure of the original company and the other newly formed spun-off entity. Just using the names of the companies is no indication of its history. For example, due to monopoly considerations, AT&T were forced to spinoff multiple companies in 1984 and effectively became 75% smaller. One of the companies they spunoff was Southwestern Bell Corporation, which became SBC Communications in 1995. In 2005 SBC took over its former parent company and immediately changed its name to AT&T. So now we have two AT&Ts - one that was delisted in 2005 and another that exists to this day. Disclosure: I am a co-owner of Norgate Data (Premium Data), a data vendor in this area. |
When is it worth it to buy dividend-bearing stocks? | Yes, they are, and you've experienced why. Generally speaking, stocks that pay dividends will be better investments than stocks that don't. Here's why: 1) They're actually making money. They can finagle balance sheets and news releases, but cash is cash, it tells no lies. They can't fake it. 2) There's less good they can do with that money than they say. When a business you own is making money, they can do two things with it: reinvest it into the company, or hand it over to you. All companies must reinvest to some degree, but only a few companies worth owning can find profitable ways of reinvesting all of it. Having to hand you, the owner, some of the earnings helps keep that money from leaking away on such "necessities" like corporate jets, expensive printer paper, or ill-conceived corporate buyouts. 3) It helps you not freak out. Markets go up, and markets go down. If you own a good company that's giving you a nice check every three months, it's a lot easier to not panic sell in a downturn. After all, they're handing you a nice check every three months, and checks are cash, and cash tells no lies. You know they're still a good company, and you can ride it out. 4) It helps others not freak out. See #3. That applies to everyone. That, in turn means market downturns weigh less heavily on companies paying solid dividends than on those that do not. 5) It gives you some of the reward of investing in good companies, without having to sell those companies. If you've got a piece of a good, solid, profitable, growing company, why on earth would you want to sell it? But you'd like to see some rewards from making that wise investment, wouldn't you? 6) Dividends can grow. Solid, growing companies produce more and more earnings. Which means they can hand you more and more cash via the dividend. Which means that if, say, they reliably raise dividends 10%/year, that measly 3% dividend turns into a 6% dividend seven years later (on your initial investment). At year 14, it's 12%. Year 21, 24%. See where this is going? Companies like that do exist, google "Dividend Aristocrats". 7) Dividends make growth less important. If you owned a company that paid you a 10% dividend every year, but never grew an inch, would you care? How about 5%, and it grows only slowly? You invest in companies, not dividends. You invest in companies to make money. Dividends are a useful tool when you invest -- to gauge company value, to smooth your ride, and to give you some of the profit of the business you own. They are, however, only part of the total return from investing -- as you found out. |
Making a big purchase over $2500. I have the money to cover it. Should I get a loan or just place it on credit? | You want to know if you should pay cash or use a credit card like cash? There are so many benefits to the card, like purchase protection, cash back, and postponed payments, that there needs to be a really good reason to pay cash. If you are concerned about the 10% threshold, ask your credit card company to raise your limit. If you are indifferent, let the merchant decide for you by asking for a discount if you pay cash. The biggest reason is that credit cards, when handled shrewdly, make your money work for you by keeping it in less liquid / higher interest investments like inflation-adjusted T-bills. You will still be able to access it by using the credit card to float large expenses without liquidating at a loss. Investment Accounts like Schwab One are great for this since you can "borrow" cash at a low interest rate against your securities, until your security sale clears. |
Is it ok to just report to 1 credit bureau instead of all 3 | The reason you would want to report to all three is because lenders don't usually query all three. Thus, it may be that your negative mark will be missed by a future lender because that lender didn't query the agency you chose to report to. Generally, it is cheaper to report to more agencies than to query more agencies, and since those reporting are also those querying, it is in their best interest to continue reporting to all agencies, and expecting others to do the same. Each agency calculates the score independently based on the information reported to that agency. Thus only reporting a negative item to Experian will mean that TransUnion and Equifax scores for the same person will be higher. |
Effect of Quantitative Easing on Price of Bonds | The classic definition of inflation is "too much money chasing too few goods." Low rates and QE were intended to help revive a stalled economy, but unfortunately, demand has not risen, but rather, the velocity of money has dropped like a rock. At some point, we will see the economy recover and the excess money in the system will need to be removed to avoid the inflation you suggest may occur. Of course, as rates rise to a more normal level, the price of all debt will adjust. This question may not be on topic for this board, but if we avoid politics, and keep it close to PF, it might remain. |
What's the difference between Market Cap and NAV? | I think the key concept here is future value. The NAV is essentially a book-keeping exercise- you add up all the assets and remove all the liabilities. For a public company this is spelled out in the balance sheet, and is generally listed at the bottom. I pulled a recent one from Cisco Systems (because I used to work there and know the numbers ;-) and you can see it here: roughly $56 billion... https://finance.yahoo.com/q/bs?s=CSCO+Balance+Sheet&annual Another way to think about it: In theory (and we know about this, right?) the NAV is what you would get if you liquidated the company instantaneously. A definition I like to use for market cap is "the current assets, plus the perceived present value of all future earnings for the company"... so let's dissect that a little. The term "present value" is really important, because a million dollars today is worth more than a million dollars next year. A company expected to make a lot of money soon will be worth more (i.e. a higher market cap) than a company expected to make the same amount of money, but later. The "all future earnings" part is exactly what it sounds like. So again, following our cisco example, the current market cap is ~142 billion, which means that "the market" thinks they will earn about $85 billion over the life of the company (in present day dollars). |
Options for dummies. Can you explain how puts & calls work, simply? | A 'Call' gives you the right, but not the obligation, to buy a stock at a particular price. The price, called the "strike price" is fixed when you buy the option. Let's run through an example - AAPL trades @ $259. You think it's going up over the next year, and you decide to buy the $280 Jan11 call for $12. Here are the details of this trade. Your cost is $1200 as options are traded on 100 shares each. You start to have the potential to make money only as Apple rises above $280 and the option trades "in the money." It would take a move to $292 for you to break even, but after that, you are making $100 for each dollar it goes higher. At $300, your $1200 would be worth $2000, for example. A 16% move on the stock and a 67% increase on your money. On the other hand, if the stock doesn't rise enough by January 2011, you lose it all. A couple points here - American options are traded at any time. If the stock goes up next week, your $1200 may be worth $1500 and you can sell. If the option is not "in the money" its value is pure time value. There have been claims made that most options expire worthless. This of course is nonsense, you can see there will always be options with a strike below the price of the stock at expiration and those options are "in the money." Of course, we don't know what those options were traded at. On the other end of this trade is the option seller. If he owns Apple, the sale is called a "covered call" and he is basically saying he's ok if the stock goes up enough that the buyer will get his shares for that price. For him, he knows that he'll get $292 (the $280, plus the option sale of $12) for a stock that is only $259 today. If the stock stays under $280, he just pocketed $12, 4.6% of the stock value, in just 3 months. This is why call writing can be a decent strategy for some investors. Especially if the market goes down, you can think of it as the investor lowering his cost by that $12. This particular strategy works best in a flat to down market. Of course in a fast rising market, the seller misses out on potentially high gains. (I'll call it quits here, just to say a Put is the mirror image, you have the right to sell a stock at a given price. It's the difference similar to shorting a stock as opposed to buying it.) If you have a follow up question - happy to help. EDIT - Apple closed on Jan 21, 2011 at $326.72, the $280 call would have been worth $46.72 vs the purchase price of $12. Nearly 4X return (A 289% gain) in just over 4 months for a stock move of 26%. This is the leverage you can have with options. Any stock could just as easily trade flat to down, and the entire option premium, lost. |
Making higher payments on primary residence mortgage or rental? | Pay down the lower balance on the rental property. Generally speaking, you are more likely to need/want to sell the rental house as business conditions change or if you need the money for some other purpose. If you pay down your primary residence first, you are building equity, but that equity isn't as liquid as equity in the rental. Also, in the US, you cannot deduct the interest on a rental property, so the net interest after taxes that you're paying on the rental narrows the gap between the 4.35% loan and the 5% loan. |
Is it better to miss the dividend and buy the undervalued stock? | I guess the answer lies in your tax jurisdiction (different countries tax capital gains and income differently) and your particular tax situation. If the price of the stock goes up or down between when you buy and sell then this counts for tax purposes as a capital gain or loss. If you receive a dividend then this counts as income. So, for instance, if you pay tax on income but not on capital gains (or perhaps at a lower rate on capital gains) then it would pay you to sell immediately before the stock goes ex-dividend and buy back immediately after thereby making a capital gain instead of receiving income. |
If a stock doesn't pay dividends, then why is the stock worth anything? | Shareholders can [often] vote for management to pay dividends Shareholders are sticking around if they feel the company will be more valuable in the future, and if the company is a target for being bought out. Greater fool theory |
What are some sources of information on dividend schedules and amounts? | You can use Yahoo! Finance to pull this information in my use. It is listed under Key Statistics -> Dividends & Splits. For example here is Exxon Mobile (XOM): Dividend Payout Information |
How to build a U.S. credit history as a worker on a visa? | In the US, money talks and bullshit walks. You can skip any credit history requirement if you demonstrate your ability to pay in a very obvious way. Credit history is just a standardized way of weeding out people that cannot reliably pay, instead of having to listen to an individual's excuses about how the bank overdrafted their account five times while they were waiting for their friend to pay them back for bubble gum. If you can show up with a wad of cash, you can get the car, or the apartment, or the bank account without the troubles of everyone else. But you can begin building credit with a secured credit card pretty easily. This will be useful for things like utilities and sometimes jobs. Also, banks won't be opposed to giving you credit if you have a lot of money in an account with them. You should be able to maintain an exemption from all socioeconomic problems in the United States, solely due to your experience with money and assets. |
What are some time tested passive income streams? | Interest payments You can make loans to people and collect interest. |
Is giving my girlfriend money for her mortgage closing costs and down payment considered fraud? | Omg, the answer is easy. Tell the TRUTH, and nothing is fraud. Down payment gifts are SOP's, and every lender works with that. EACH lender has their own rules. Fannie May and Freddie Mac could care less, and FHA and VA backed loans allow for full gifting unless the buyer's credit is below the standard 620, then 3.5% must come from the buyer. Standard bank loans want to know the source of the down payment for ONE REASON ONLY: to know if the buyer is taking ON A NEW DEBT! The only thing you will need do is sign a legal document stating the entire down payment is a gift. That way the bank knows their lendee isn't owing a new substantial debt, and that there aren't two lenders on the house, because should she default, the bank will have to pay you back first off the resale. Get it? They just want to know how many hands are in the fire. |
Recent college grad. Down payment on a house or car? | That sounds like way too much for a car! I suggest you get a used car that only has a few years on it and is in mint condition. Not only are they cheaper to purchase, they are also the cheapest to insure. |
What is the difference between FINRA share volume and NASDAQ share volume? | Assuming the data you're referring to is this line: the difference might be related to the different exchanges on which the stock trades. FINRA could be listing the reported volume from one exchange, while the NASDAQ data might be listing the volume on all exchanges. This is an important distinction because AAV is a Canadian company that is listed on the Toronto Stock Exchange and the NYSE. The Q at the end of the line stands for NASDAQ, according to FINRA's codebook for those data. My guess is that the FINRA data is only reporting the volume for the NASDAQ exchange and not the total volume for all exchanges (Toronto, NASDAQ, NYSE, etc.) while the data straight from NASDAQ, oddly enough, is reporting the total volume. However, FINRA could also face reporting discrepancies, since it's a regulatory body and therefore might not have the most up-to-date volume data that the various exchanges can access. I don't know if it's related or not, but looking at the NASDAQ historical data, it looks like the volume on March 6, the day you're asking about, was much lower than the volume in most of the days immediately before or after it. For all I know, something might have happened that day concerning that particular stock or the market as a whole. I don't remember anything in particular, but you never know. |
Emerging markets index fund (VDMIX) for an inexperienced investor | In this environment, I don't think that it is advisable to buy a broad emerging market fund. Why? "Emerging market" is too broad... Look at the top 10 holdings of the fund... You're exposed to Russia & Brazil (oil driven), Chinese and Latin American banks and Asian electronics manufacturing. Those are sectors that don't correlate, in economies that are unstable -- a recipie for trouble unless you think that the global economy is heading way up. I would recommend focusing on the sectors that you are interested in (ie oil, electronics, etc) via a low cost vehicle like an index ETF or invest using a actively managed emerging markets fund with a strategy that you understand. Don't invest a dime unless you understand what you are getting into. An index fund is just sorting companies by market cap. But... What does market cap mean when you are buying a Chinese bank? |
How safe is a checking account? | While Rocky's answer is correct in the big picture there is another factor here to keep in mind: The disruption while you're waiting to resolve it. If a fraudster gets your card and drains your account you'll get your money back--but there will be a period while they are investigating that it won't be available. For this reason I avoid debit card transactions and only use credit cards. If the fraudster gets your credit card you might lose access while they investigate but you don't lose access to your bank account. |
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