Question stringlengths 15 166 | Answer stringlengths 3 10.6k |
|---|---|
Starting an investment portfolio | Is this amount an adequate starting amount to begin investing with? Yes. You can open an account at a brokerage with this amount. I'm not sure I would invest in individual stocks at this point. Which services should I use to start buying shares? (Currently my bank offers this service but I'm willing to use other sources) I can't make UK-specific recommendations, but I'd compare your bank's fees to those of a discount broker -- as well as the variety and level of service available. I would like to regularly increase the amount invested in shares. Is it worth doing this in say £200 increments? Take a look at the fees associated with each investment. Divide the fee by the increment to see what percent you'll lose to fees/commissions. Keep in mind that you have to gain more than that percentage to start earning a positive return on your investment. If you have access to fee-free automatic mutual fund investments, and you can commit to the £200 amount on a regular basis going forward, then this can be a completely free way of making these incremental investments. See also this answer on dollar cost averaging, and my comment on the other answer on that question for how fees impact returns. When buying shares should I focus on say two or three companies, or diversify more? I would diversify into two or three different index funds. Read up on asset allocation. For example, you might invest 1/3 of your balance into S&P 500 index fund, bond index fund, and MSCI EAFE index fund (but that's just a rough example, and not necessarily good for you). I highly recommend "The Intelligent Asset Allocator" by William Bernstein for excellent info on diversification and asset allocation. |
What is the best way to help my dad consolidate his credit card debt at a lower rate? | I agree with you that you need to consolidate this debt using a loan. It may be hard to find a bank or credit organization that will give you an unsecured personal loan for that much money. I know of one, called Lending Club (Disclaimer - I'm an investor on this platform. Not trying to advertise, it's just the only place I know of off the top of my head) that facilitates loans like this, but instead of a bank financing the loan, the loan is split up accross hundreds of investors who each contribute a small amount (such as $25). They have rates anywhere between 5-30%, based on your credit profile(s), and I believe they have some loan amounts that go up to the area that you're discussing. Regarding buying the house - The best thing you can do when trying to buy a house is to save up a 20% downpayment, if at all possible. Below this amount, you may be asked to pay for 'PMI' - Private Mortgage Insurance. This is a charge that doesn't go away for quite a while (until you've paid them 20% of the appraised value of the home), where you pay a premium because you didn't have the 20% downpayment for the house. I would suggest you try to eliminate your credit card debt as soon as possible, and would recommend the same for your father. Getting your utilization down and reconsolidating the large debts with a loan will help to reduce interest charges and get you a reasonable, fixed payment. Whether you decide to pay off your own balances using your savings account is up to you; if it were me, personally, I'd do so immediately rather than trying to pay it off over time. But if you lose money to taxes by withdrawing the money from your 'tax free savings account', it may not be a beneficial situation. Treat debt, especially credit card debt, like an emergency at all times, and you'll find yourself in a better place as a result. Credit card debt and balances are and should be temporary, and their rates and fees are structured that way. If, for any reason, you expect that a credit card's balance will remain for an extended period of time, you may want to consider whether it would be advantageous for you to consolidate the debt into a loan, instead. |
Why most of apple stock price since 10years have been gained overnight? | I'll answer this question: "Why do intraday traders close their position at then end of day while most gains can be done overnight (buy just before the market close and sell just after it opens). Is this observation true for other companies or is it specific to apple ?" Intraday traders often trade shares of a company using intraday leverage provided by their firm. For every $5000 dollars they actually have, they may be trading with $100,000, 20:1 leverage as an example. Since a stock can also decrease in value, substantially, while the markets are closed, intraday traders are not allowed to keep their highly leveraged positions opened. Probabilities fail in a random walk scenario, and only one failure can bankrupt you and the firm. |
classify investments in to different asset types | REITs can be classified as equity, mortgage, or hybrid. A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. Trades like equity but the underlying is a property ot mortgage. So you are investing in real estate but without directly dealing with it. So you wouldn't classify it as real estate. CD looks more like a bond.If you look at the terms and conditions they have many conditions as a bond i.e. callable, that is a very precious option for both the buyer and seller. Self occupied house - Yes an asset because it comes with liabilities. When you need to sell it you have to move out. You have to perform repairs to keep it in good condition. Foreign stock mutual fund - Classify it as Foreign stocks, for your own good. Investments in a foreign country aren't the same as in your own country. The foreign economy can go bust, the company may go bust and you would have limited options of recovering your money sitting at home and so on and so forth. |
Is candlestick charting an effective trading tool in timing the markets? | I interned for about six months at a firm that employed a few technical analysts, so I'll try to provide what little information I can. Since the bulk of the intra-day trading was decided algorithmically, technical analysts had two main functions: This basically boils down to my answer to your question. There are still enough people, trading firms, etc. who believe in candlestick charting and other visually subjective patterns that if you notice a trend, pattern, etc. before the majority of traders observing, you may be able to time the market successfully and profit. This is becoming increasingly dangerous, however, because of the steps I outlined above. Over time, the charting patterns that have been proven effective (often in many firms individually since the algorithms are all proprietary) are incorporated into computer algorithms, so the "traders" you're competing with to see the pattern are increasingly low-latency computer clusters less than a few blocks from the exchange. Summary: Candlestick charting, along with other forms of subjective technical analysis, has its believers, and assuming enough of these believers trade the standard strategies based on the standard patterns, one could conceivably time the market with enough skill to anticipate these traders acting on the pattern and therefore profit. However, the marginal benefits of doing so are decreasing rapidly as computers take over more trading responsibility. Caveats: I know you're in Australia, where the market penetration of HF/algo traders isn't as high as in the US, so it might be a few more years before the marginal benefits cease to be profitable; that being said, if various forms of technical analysis proved wildly profitable in Australia, above and beyond profits available in other markets, rest assured that large American or British trading firms would already have moved in. My experience is limited to one trading firm, so I certainly can't speak for the industry as a whole. I know I didn't address candlestick charts specifically, but since they're only one piece of visual technical analysis, I tried to address the issue as a whole. This somewhat ties into the debate between fundamental or technical analysis, which I won't get into. Investopedia has a short article on the subject. As I said, I won't get into this because while it's a nice debate for small traders, at large trading firms, they don't care; they want to make profit, and any strategy that can be vetted, whether it's fundamental, technical, or astrological, will be vetted. I want to add more information to my answer to clear up some of the misconceptions in the comments, including those talking about biased studies and a lack of evidence for or against technical analysis (and candlestick charts; I'll explore this relationship further down). It's important to keep in mind that charting methods, including candlestick charts, are visually subjective ways of representing data, and that any interpretations drawn from such charts should, ideally, represent objective technical indicators. A charting method is only as good as the indicators it's used to represent. Therefore, an analysis of the underlying indicators provides a suitable analysis for the visual medium in which they're presented. One important study that evaluates several of these indicators is Foundations of Technical Analysis: Computational Algorithms, Statistical Inference, and Empirical Implementation by Lo, Mamaysky, and Wang. Lest anyone accuse its authors of bias, I should point out that not only is it published by the National Bureau of Economic Research (a highly reputable organization within economics and finance), but also that the majority of its authors come from MIT's Sloan school, which holds a reputation second to none. This study finds that several technical indicators, e.g. head-and-shoulder, double-bottom, and various rectangle techniques, do provide marginal value. They also find that although human judgment is still superior to most computational algorithms in the area of visual pattern recognition, ... technical analysis can be improved by using automated algorithms Since this paper was published in 2000, computing power and statistical analysis have gained significant ground against human ability to identify and exploit for visual pattern detection like candlestick charts. Second, I suggest you look into David Aaronson's book, Evidence-Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals. He finds similar results to the Lo, et. al. paper, in that some technical indicators do add value to the investment process, but those that do are those that can be represented mathematically and thus programmed directly into trading algorithms (thus bypassing visual tools like candlestick charts). He describes how studies, including Lo, et al., have found that head and shoulders patterns are worse than random, i.e. you would earn higher returns if you simply traded at random. That point is worth than repeating. If a day-trader is using a candlestick chart and using head-and-shoulders patterns as part of their toolkit, he's rolling the dice when he uses that pattern and returns that come from its application come from chance. This reminds me of that old story about a company that sends out pamphlets predicting the results of sports games, complete with "strategies" and "data" to back up the predictions. The company sends out several versions of the pamphlet every game, each predicting a different winner. Given a large enough sample size, by the end of the season, there are a few people who have received a pamphlet that accurately predicted the winner for every game and they're convinced the system is perfect. The others weren't so lucky, however. Relying on candlestick charts and TA patterns that are relics from the pre-computerized era is reassuring to some traders and gives them a sense of control and "beating the market," but how long will chance remain on your side? This is why I maintain that visual tools like candlestick charts are a slowly dying medium. They certainly still add value to some trading firms, which is why Bloomberg terminals still ship with this functionality built in, but as more and more research shows, automated algorithms and statistical indicators can provide more value. It's also important to think about whether the majority of the value added by visual tools like candlestick charts comes in the form of profit or a sense of security to traders who learned the field using them over the past few decades. Finally, it's extremely important to realize that the actions of retail investors in the equities market cannot begin to represent the behaviors of the market as a whole. In the equities markets alone, trading firms and institutional investors dwarf retail investors, and the difference in scale is even more vastly pronounced in derivatives and currency markets. The fact that some retail investors use candlestick charts and the technical indicators they (hope) underlie them provides nothing but minor anecdotal evidence as to their effectiveness. |
In a house with shared ownership, if one person moves out and the other assumes mortgage, how do we determine who owns what share in the end? | Both names are on the deed, so the property is jointly owned. You're going to need the second person's signature to be able to sell the property. Ideally the way to know "what happens now" is to consult the written agreement you made before you purchased the house together. The formula for dividing up assets when dissolving your partnership is whatever you agreed to up front. (Your up-front agreement could have said "if you move out, you forfeit any claim to the property".) It sounds like you don't have that, so you'll have to come to some (written) agreement with your partner before you proceed. If you can't come to an agreement, then you'll end up in court, a judge will split up the assets, and the only winners there are the lawyers... |
Retirement Funds: Betterment vs Vanguard Life strategy vs Target Retirement | Katherine from Betterment here. I wanted to address your inquiry and another comment regarding our services. I agree with JAGAnalyst - it's detrimental to your returns and potential for growth if you try to time the market. That's why Betterment offers customized asset allocation for each portfolio based on the nature of your goal, time horizon, and how much you are able to put towards your investments. We do this so regardless of what's happening in the markets, you can feel comfortable that your asset allocation plus other determining factors will get you where you need to go, without having to time your investing. We also put out quite a bit of content regarding market timing and why we think it's an unwise practice. We believe continuously depositing to your goal, especially through auto-deposits, compounding returns, tax-efficient auto-rebalancing, and reinvesting dividends are the best ways to grow your assets. Let me know if you would like additional information regarding Betterment accounts and our best practices. I am available at buck@betterment.com and am always happy to speak about Betterment's services. Katherine Buck, Betterment Community Manager |
Any specific examples of company valuations according to Value Investing philosophy? | Buffet is in a different league from other value investors. He looks for stable companies with no debt and good management. Then he looks to deeply understand the industries of candidate companies, and looks for companies that are not in commodity businesses or sell commodities that can be bought for 25% of the valuation that he believes reflects the true value of the company. Deeply understanding the market is really the key. Consider the Burlington Northern Santa Fe Railroad, which Buffet purchased last year. Railroads benefit from higher oil prices, as they can transport cargo much cheaper than trucks. They also tend to have natural monopolies in the regions they operate in. Buffet bought the railroad just as production of oil and natural gas in North Dakota started picking up. Since pipeline capacity between North Dakota and refineries in Texas/Oklahoma is very limited, the railroad is making alot of money transporting crude. |
Can rent be added to your salary when applying for a mortgage? | The days are long gone when offered mortgages were simply based on salary multiples. These days it's all about affordability, taking into account all incomes and all outgoings. Different lenders will have different rules about what they do and don't accept as incomes; these rules may even vary per-product within the same lender's product list. So for example a mortgage specifically offered as buy-to-let might accept rental income (with a suitable void-period multiplier) into consideration, but an owner-occupier mortgage product might not. Similarly, business rules will vary about acceptance of regular overtime, bonuses, and so on. Guessing at specific answers: #1 maybe, if it's a buy-to-let product, Note that these generally carry a higher interest rate than owner-occupier mortgages; expect about 2% more #2 in my opinion it's extremely unlikely that any lender would consider rental income from your cohabiting spouse #3 probably yes, if it's a buy-to-let product |
Real Estate: Please review my recent investment (with numbers from recent purchase) | You question is a bit scary to me. You show $2100 rent, and let's even assume that's 100%, i.e. never a vacancy. (Rule of thumb is 10% vacancy. Depending on area, a tenant may stay a year, but when they leave, you might need to have a bit of maintenance and miss 2 months rent) You count the mortgage and taxes, and are left with $500/mo. Where is the list of ongoing expenses? I suggest you put that $500/mo into a separate account and let us know a year from now if anything is left. To Anthony's point. I agree 100%, no one can tell you everything you need to know. But, whatever my answer, or his, other members with experience (similar or different) will add to this, and in the end you'll have a great overview. The truth is that it's easy for me to sit here and see what you may be missing. By the way, if you look at the 'rules of thumb' they will make your head spin. There are those who say the target is for the rent to be 2% of the value of the house. But, there are markets where this will never happen. There's another rule that says the expenses (besides mort/tax) should be planned at 50% of the rent, i.e. you should put aside $1000/mo for expenses over the long term. The new house will be lower of course, but in years past year 10 or so, this number will start to look reasonable. |
Deducting business expenses paid for by gift card | To quote the answer you linked to: Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. So, if your business purchased the $1000 gift card for $800, you should see a $800 charge appearing on a business CC or bank statement. You would therefore be able to deduct the $800, but not the full $1000 of items that you purchase with it. Side Notes: |
Live in California but work for Illinois-based company | California and New York are very aggressive when it comes to revenue and taxes. As such, mere having an employee in these States creates a nexus and tax/filing liability for the company. @Adam Wood mentioned sales tax - that is correct. Having an employee in the State of California will require collecting sales tax for CA, and if until now your employer didn't have to - that would be a good enough reason to refuse your request. In addition to sales taxes, there's also the issue of corporate filings (they will now have to file paperwork in CA and pay CA franchise taxes just because of you) and payroll taxes (which are pretty high in CA and NY). It will also subject the to CA/NY/WA labor laws, which are more liberal than in most of the other States. Washington doesn't have personal income tax, but does have corporate income tax and sales tax, so I'm guessing the reasons to exclude this State are the same. |
Ways to save for child's college education where one need not commit to set contributions? [duplicate] | Since this post was migrated from Parenting, my reply was in the context where it appeared to be misrepresenting facts to make a point. I've edited it to be more concise to my main point. In my opinion, the best way to save for your childs future is to get rid of as much of your own debt as possible. Starting today. For the average American, a car is 6-10%. Most people have at least a couple credit cards, ranging from 10-25% (no crap). College loans can be all over the map (5-15%) as can be signature (8-15%) or secured bank loans (4-8%). Try to stop living within your credit and live within your means. Yeah it will suck to not go to movies or shop for cute things at Kohl's, but only today. First, incur no more debt. Then, the easiest way I found to pay things off is to use your tax returns and reduce your cable service (both potentially $Ks per year) to pay off a big debt like a car or student loan. You just gave yourself an immediate raise of whatever your payment is. If you think long term (we're talking about long-term savings for a childs college) there are things you can do to pay off debt and save money without having to take up a 2nd job... but you have to think in terms of years, not months. Is this kind of thing pie in the sky? Yes and no, but it takes a plan and diligence. For example, we have no TV service (internet only service redirected an additional $100/mo to the wifes lone credit card) and we used '12 taxes to pay off the last 4k on the car. We did the same thing on our van last year. It takes willpower to not cheat, but that's only really necessary for the first year-ish... well before that point you'll be used to the Atkins Diet on your wallet and will have no desire to cheat. It doesn't really hurt your quality of life (do you really NEED 5 HBO channels?) and it sets everyone up for success down the line. The moral of the story is that by paying down your debt today, you're taking steps to reduce long haul expenditures. A stable household economy is a tremendous foundation for raising children and can set you up to be more able to deal with the costs of higher ed. |
Net loss not distributed by mutual funds to their shareholders? | I'll try to answer using your original example. First, let me restate your assumptions, slightly modified: The mutual fund has: Note that I say the "mutual fund has" those gains and losses. That's because they occur inside the mutual fund and not directly to you as a shareholder. I use "realized" gains and losses because the only gains and losses handled this way are those causes by actual asset (stock) sales within the fund (as directed by fund management). Changes in the value of fund holdings that are not sold are not included in this. As a holder of the fund, you learn the values of X, Y, and Z after the end of the year when the fund management reports the values. For gains, you will also typically see the values reported on your 1099-DIV under "capital gains distributions". For example, your 1099-DIV for year 3 will have the value Z for capital gains (besides reporting any ordinary dividends in another box). Your year 1 1099 will have $0 "capital gains distributions" shown because of the rule you highlighted in bold: net realized losses are not distributed. This capital loss however can later be used to the mutual fund holder's tax advantage. The fund's internal accounting carries forward the loss, and uses it to offset later realized gains. Thus your year 2 1099 will have a capital gain distribution of (Y-X), not Y, thus recognizing the loss which occurred. Thus the loss is taken into account. Note that for capital gains you, the holder, pay no tax in year 1, pay tax in year 2 on Y-X, and pay tax in year 3 on Z. All the above is the way it works whether or not you sell the shares immediately after the end of year 3 or you hold the shares for many more years. Whenever you do sell the shares, you will have a gain or loss, but that is different from the fund's realized losses we have been talking about (X, Y, and Z). |
Pros & cons of buying gold directly vs. investing in a gold ETF like GLD, IAU, SGOL? | Owning physical gold (assuming coins): Owning gold through a fund: |
Index ETF or Index mutual fund - standard brokerage account | The main difference between a mutual fund and an ETF are how they are bought and sold (from the investors perspective). An ETF is transacted on the open market. This means you normally can't buy partial shares with your initial investment. Having to transact on the open market also means you pay a market price. The market price is always a little bit different from the Net Asset Value (NAV) of the fund. During market hours, the ETF will trade at a premium/discount to the NAV calculated on the previous day. Morningstar's fund analysis will show a graph of the premium/discount to NAV for an ETF. With a mutual fund on the other hand, your investment goes to a fund company, which then grants you shares while under the hood buying the underlying investments. You pay the NAV price and are allowed to buy partial shares. Usually an ETF has a lower expense ratio, but if that's equal and any initial fees/commissions are equal, I would prefer the mutual fund in order to buy partial shares (so your initial investment will be fully invested) and so you don't have to worry about paying premium to NAV |
Rent or buy with 0 down | In the situation you describe, I would strongly consider purchasing. Before purchasing, I would do the following: Think about your goals. Work with good people. Set a budget. Be able to handle surprises. If buying a home makes sense, you can do the following after buying: |
property owned 50/50 between my brother and me | ASSUMING you're talking about a property in the United States, the answer generally would be "no". You aren't actually paying any of the expenses for the property and yet you want to take the deductions for doing so? That's a rather cheeky move, I'd say! (grin) It probably would lead to some real strife with your brother, since he would have proper claim to those credit on the basis he's the one footing the bills for the property. Before you do anything like what you're talking about, it might be best to speak with him, because both of you are running the very real risk of an audit, and if that happens then I can guarantee the IRS will slap the daylights out of you for it. Your brother, I'm sure, is already claiming all of the deductions he can for what he's putting into the property, and on top of that you want to file for your half. What half are you referring to, when your out-of-pocket is zero? So what you're saying is, you think that between you and your brother you should be able to take a credit of 150% of the actual deductions...Sounds like a recipe for disaster to me. I strongly encourage you to talk to a tax professional, but if you get a different answer to this than what I've already given then I'd be stunned. I hope this helps. Good luck! |
How much lump sum investment in stocks would be needed to yield a target stable monthly income? | If your requirements are hard (must have $1000/month, must have the same or bigger in capital at the end), stocks are a poor choice of investment. However, in many cases, people are willing to tolerate some level of risk to achieve the expected returns. You also do not mention inflation, which can take quite a lot out of your portfolio over the course of ten years. If we make some simplifying assumptions, you want to generate $12,000 a year. You can realistically expect the (whole) stock market, long term (i.e. over time periods substantially longer than 10 years), to return approximately 4 - 5% after factoring in inflation. That means an investment of $240,000 - $300,000 (the math is simplified somewhat here). If you don't care about inflation, you can up the percentage rather somewhat. According to this article, the S&P 500 returned an average of 11.31% from 1928 through 2010 (not factoring in inflation), which would require an investment of approximately $106,100. But! This opens you up to substantial risk. The stock market may go down 30% this year! According to the above article, the S&P returned only 3.54% from 2001 to 2010. Long-term, it goes up, but your investment case is really unsuited to investing in an index to the entire stock market given your requirements. You may be better suited investing primarily in stable bonds, or perhaps a mix of bonds and stocks. Alternatively, you may want to consider even more stable investments such as treasury notes. Treasury notes are all but guaranteed, but with a lousy rate of return. Heck, you could consider a GIC (that may be Canada-only) or even a savings account. There's also the possibility of purchasing an annuity, though almost everyone will advise against such. Personally, I'd go for a mutual fund which invested approximately 70% bonds and the rest in stocks over such a time period. Something like ING Direct's Streetwise Balanced Income Portfolio, if you were in Canada. It substantially lowers your expected return but also lowers your risk. I can't honestly say what the expected return there is; at this point, it's returned 4% per year (before inflation), but has been around only since the beginning of 2008. And to be clear, this is absolutely not free of risk. |
Using P/E Ratio of an ETF to decide on asset mix | P/E is a useful tool for evaluating the price of a company, but only in comparison to companies in similar industries, especially for industries with well-defined cash flows. For example, if you compared Consolidated Edison (NYSE:ED) to Hawaiian Electric (NYSE:HE), you'll notice that HE has a significantly higher PE. All things being equal, that means that HE may be overpriced in comparison to ED. As an investor, you need to investigate further to determine whether that is true. HE is unique in that it is a utility that also operates a bank, so you need to take that into account. You need to think about what your goal is when you say that you are a "conservative" investor and look at the big picture, not a magic number. If conservative to you means capital preservation, you need to ensure that you are in investments that are diversified and appropriate. Given the interest rate situation in 2011, that means your bonds holding need to be in short-duration, high-quality securities. Equities should be weighted towards large cap, with smaller holdings of international or commodity-associated funds. Consider a target-date or blended fund like one of the Vanguard "Life Strategy" funds. |
Should I set a stop loss for long term investments? | Do not use a stop loss order as a long-term investor. The arguments in favor of stop losses being presented by a few users here rely on a faulty premise, namely, that there is some kind of formula that will let you set your stop such that it won't trigger on day-to-day fluctuations but will trigger in time to protect you from a significant loss in a serious market downturn. No such formula exists. No matter where you set your stop, it is as likely to dump you from your investment just before it begins climbing again as it is to shield you from continued losses. Each time that happens, you will have sold low and bought high, incurring trading fees into the bargain. It is very unlikely that the losses you avoid in a bear market (remember, you still incur the loss up until your stop is hit; it's only the losses after that that you avoid) will make up the costs of false alarms. On top of that, once you have stopped out of your first investment choice, then what? Will you reinvest in some other stock or fund? If those investments didn't look good to you when you first set up your asset allocation, then why should they look any better now, just because your primary investment has dropped by some arbitrary[*] amount? Will you park the money in cash while you wait for prices to bottom out? The market bottom is only apparent in retrospect. There is no formula for calling it in real time. Perhaps stop loss orders have their uses in active trading strategies, or maybe they're just chrome that trading platforms use to attract customers. Either way, using them on long-term investments will just cost you money in the long run. Forget the fancy order types, and manage your risk through your asset allocation. The overwhelming likelihood is that you will get better performance, and you will spend less time worrying about your investments to boot. [*] Why are the stop levels recommended by the formulae invariably multiples of 5%? Do the market gods have a thing for round numbers? |
Harmony Gold Mining Company is listed on the NYSE and JSE at different prices? | The quotes on JSE are for 100 share lots. The quotes on NYSE are for single shares. That still leaves some price difference, but much less than you calculated. (EDIT: Equivalently, the price is quoted in 1/100th of a Rand. The Reuter's listing makes this explicit since the price is listed as ZAc rather than ZAR. http://www.reuters.com/finance/stocks/overview?symbol=HARJ.J) As noted in the other answer currently up, NYSE is quoting American Depositary Receipts (ADRs) for this company, which is not directly its stock. The ADR in this case, if you check the prospectus, is currently 1 share of the ADR = 1 share of the stock on its home market. A US institution (in this case it looks like BNY Mellon) is holding shares of stock to back each ADR. Arbitrage is possible and does happen. It's not perfect though, because there are a variety of other cost and risk factors that need to be considered. There's a good review here: Report by JP Morgan Some summary points: |
My university has tranfered me money by mistake, and wants me to transfer it back | Really a very straightforward situation, and subsequently, answer. Call the university pursors that you normally deal with, ask them to document the last 3 months of disbursements and highlight the incorrect one(s). If the money is already spent out, ask them if they can apply it to future disbursements via adjusting entries, and call it a day. If not, and you CAN pay it back, go to your bank and ask them to figure it out...which they should be able to do, having the original sender's info. |
Why are interest rates on saving accounts so low in USA and Europe? | Typically developing economics are marked by moderate to high inflation [as they are growing at a faster pace], higher in savings rate and higher lending rates. If you reduce the lending rate, more business / start-up will borrow at cheaper rate, this in turn means lowers savings rate and leads to higher inflation. To combat this Central Banks make borrowing expensive, which lowers inflation and increases the saving rate. Essentially all these 3 are tied up. As to why these countries offer higher interest on USD is because most of the developing countries have trade [current account] deficit. They need to bring in more USD in the country. One of the ways is to encourage Non Resident Citizens to park their foreign earning back home, ensuring more funds USD inflow. The rate differential also acts as a guide as to how the currency would be valued against USD. For example if you get 8% on USD, less than 12% had you converted same to Rouble, at the end of say 3 years, the exchange rate between USD and Rouble would factor that 4%, ie rouble will go down. Developed countries on the other hand are marked by low inflation [they have already achieved everything] as there is no spurt in growth, it more BAU. They are also characterized by low savings and lending rates. |
How to understand adding or removing “liquidity” in stock markets with market/non-market orders? | Not all limit orders add liquidity, but all market orders remove liquidity presuming there is liquidity to remove. A liquidity providing order is one that is posted to the limit book. If an order, even a limit order, is filled before being posted to the limit book, it removes liquidity. Liquidity is measured by a balance and abundance of quantities posted on the limit book and the best spread between the lowest ask and the highest bid. |
Can I calculate stock value with Williams%R if I know the last set? | William %R is a momentum indicator used for measuring overbought and oversold levels, it is not used to predict the price of a stock. In fact, William %R, like all momentum indicators, is a lagging indicator - meaning the indicator level changes as the price of the stock changes. It ranges from 0 to -100. Usually when a reading is less than -80 the stock can be considered to be oversold, and when the reading is above -20 the stock can be considered overbought. When viewed together with the price chart, this can help provide a trader with entry and exit points into and out of a trade. |
Applying student loan proceeds toward tuition? | Your university should have a finance department which can help with payments. Speak with them and tell them you have interest in paying for at least part of your next semester in cash. From here they should be able to tell you the best method for this, though most likely cash/check will suffice. If there is no finance department, or you are still unsure, check with student services for more information. |
Why are currency forwards needed? | Can't I achieve the exact same effect and outcome by exchanging currency now and put that amount of USD in a bank account to gain some interest, then make the payment from one year from now? Sure, assuming that the company has the money now. More commonly they don't have that cash now, but will earn it over the time period (presumably in Euros) and will make the large payment at some point in time. Using a forward protects them from fluctuations in the exchange rate between now and then; otherwise they'd have to stow away USD over the year (which still exposes them to exchange rate fluctuations). |
What if 40% of the remaining 60% Loan To Value (ratio) is not paid, or the borrower wants to take only 60% of the loan? | Let me summarize your question for you: "I do not have the down payment that the lender requires for a mortgage. How can I still acquire the mortgage?" Short answer: Find another lender or find more cash. Don't overly complicate the scenario. The correct answer is that the lender is free to do what they want. They deem it too risky to lend you $1.1M against this $1.8M property, unless they have $700k up front. You want their money, so you must accept their terms. If other lenders have the same outlook, consider that you cannot afford this house. Find a cheaper house. |
Is giving my girlfriend money for her mortgage closing costs and down payment considered fraud? | When you purchase a mortgage, you have to prove the source of your down payment. Primarily this is so that the mortgage lender knows that there are no other outstanding liens against the property. If you show that some or part of your down payment was a gift, there is no fraud, but it may affect your qualification for the mortgage. Consult a lawyer in your area to determine if there is a legal way to gift the money that is not taxed. If all else fails you could just pay the tax. Also, you should research whether your gift is above the floor of taxable gifts. |
Where can one find intraday prices for mutual funds? | Like others have said, mutual funds don't have an intraday NAV, but their ETF equivalents do. Use something like Yahoo Finance and search for the ETF.IV. For example VOO.IV. This will give you not the ETF price (which may be at a premium or discount), but the value of the underlying securities updated every 15 seconds. |
Is there any kind of unsecured stock loan? | buy an option, they cost less and let you buy shares in the future at the price you see now. only if you plan to buy more than 100 shares of the stock at that future date though. better learn how to use options strategically first, which I won't go into. but this is indeed their purpose. |
Is the Canadian Securities Course (CSC) enough to get started in the finance industry in Canada? | Wikipedia says "The Canadian Securities Course (CSC) offered by the Canadian Securities Institute (CSI) is the initial course required for becoming licensed to work within the Canadian securities industry (outside Quebec) as a securities dealer or securities agent." Src: Candian Securities Course EfficientMarket Canada adds " You require it and further courses for other jobs in the investment industry. Generally some work experience is also required. All of this is governed by various self-regulatory agencies. The material in the course is strong on money making products, and fairly weak on material that would actually protect a consumer from harm. Passing the course is very little indication that you understand what's important about investing, for example, you won't be taught much of anything about the theory of investment, or the markets, or things like the efficient market hypothesis." Src: EfficientMarket.ca on the CSC So it appears that the CSC is necessary to work as certain types of financial agencies. That being said, I doubt it will be enough to get your foot in the door. This seems more like a prerequisite rather than a true qualification, so you'll be competing with MBAs/Finance students and other people who either have experience or training in the financial industry. I'd recommend you look into the Chartered Financial Analyst (CFA) certification as that will provide you with a rigorous knowledge of financial theory as well as asset management, which seems more appropriate for what you'd like to do. From there you'll have to network like crazy and leverage your experience to get in at a Canadian financial firm and eventually wealth management. So yes, I suppose a CSC is a good first step but more will certainly be required and I doubt it will be enough to land you a full time position. Another important factor is age - nobody expects undergrads to have extensive certifications or experience, but it's harder for a 35 year old to enter a new industry, especially finance. |
where to get stock price forecast | I believe you are looking for price forecasts from analysts. Yahoo provides info in the analyst opinions section: here is an example for Apple the price targets are located in the "Price Target Summary" section. |
Qualified Stock Options purtchased through my Roth IRA | No, you cannot. ISO are given to you in your capacity as an employee (that's why it is "qualified"), while your IRA is not an employee. You cannot transfer property to the IRA, so you cannot transfer them to the IRA once you paid for them as well. This is different from non-qualified stock options (discussed in this question), which I believe technically can be granted to IRA. But as Joe suggests in his answer there - there may be self-dealing issues and you better talk to a licensed tax adviser (EA/CPA licensed in your State) if this is something you're considering to do. |
How will the after market affect the open of the market tomorrow? | In general a stock can open at absolutely any price with no regard for the closing price or after hours price the previous day. The opening price will be determined by the best bid and offer made by people who decide to trade the next day. Some of the those people may have put orders in on a prior day that are still on the books and matter, but there's a lot of time overnight for people to cancel orders and enter new ones, which is especially likely to happen if there was substantive news overnight. As for what you can do in your case, you have the same options that you always had: Sell or hold. If you're selling, you can sell after hours, in the pre-open hours, or during the trading day. There's nothing we can say about this case that's really any different than we can say about any other stock on any other day. |
How feasible would it be to retire just maxing out a Roth IRA? | Interesting. The answer can be as convoluted/complex as one wishes to make it, or back-of-envelope. My claim is that if one starts at 21, and deposits 10% of their income each year, they will likely hit a good retirement nest egg. At an 8% return each year (Keep in mind, the last 40 years produced 10%, even with the lost decade) the 10% saver has just over 15X their final income as a retirement account. At 4% withdrawal, this replaces 60% of their income, with social security the rest, to get to nearly 100% or so replacement. Note - I wrote an article about Social Security Benefits, showing the benefit as a percent of final income. At $50K it's 42%, it's a higher replacement rate for lower income, but the replacement rate drops as income rises. So, the $5000 question. For an individual earning $50K or less, this amount is enough to fund their retirement. For those earning more, it will be one of the components, but not the full savings needed. (By the way, a single person has a standard deduction and exemption totaling $10150 in 2014. I refer to this as the 'zero bracket.' The next $8800 is taxed at 10%. Why go 100% Roth and miss the opportunity to fund these low or no tax withdrawals?) |
When you're really young and have about 2K to start investing $ for retirement, why do some people advise you to go risky? | First of all, "going risky" doesn't mean driving to Las Vegas and playing roulette. The real meaning is that you can afford higher risk/return ratio compared to a person who will retire in the following ten years. Higher return is very important since time works for you and even several extra percent annually will make a big difference in the long run because of compound interest effect. The key is that this requires the investment to not be too risky - if you invest in a single venture and it fails you lose all the money and that's worse that some conservative investment that could yield minimum income. So you still need the investment to be relatively safe. Next, as user Chris W. Rea mentions in the comment funds and ETFs can be very risky - depending on the investment policy they can invest into some very risky ventures or into some specific industry and that poses more risk that investing into "blue chips" for example. So a fund or an ETF can be a good fit for you if you choose a right one. |
Capital Gains Tax - Does this apply only to the actual “gains” or to the entire amount of my sale? | You normally only pay taxes on the difference between the sale price and the cost basis of the asset. In your example, you would probably pay taxes on the $10 difference, not the full sale price of $110. If you paid a commission, however, you would be taxed on your gain minus the commission you paid. Since you held the asset for less than a year, you wouldn't pay the long-term capital gains rate of 20%; you'd be taxed on the capital gain as if it were ordinary income, which depends on your federal income tax bracket. Also, littleadv makes a good point about the implications of buying the asset with after-tax funds too, so that's another part of the equation to consider as well. |
Salary equivalency: London vs Berlin | Coming to London at this point of time is not a wise decision, not that I mean to discourage you. The job market is quite competitive because loads of developers are in the markets, because of the layoffs. So be ready to wait for some time to land a role. Banks aren't recruiting that heavily, but that might change if the economy picks up. Regarding salaries, the contract rates you quote are primarily for banking sector jobs, some outside banking also pay those rates, but they are few. You can quote what you want to a recruiter, most contracts are through them as most managers have a fincancial get go between recruiters and themselves. Recruiters take their cut what they bill, 400+200(just a guess). So the more they take from the 400, better is their margin. So they try to decrease the 400 portion. But the important point is be ready to keep your chair warm for some time. I am not sure why you have to move to London. Keep your current job. Get a Skype number or something and get the calls diverted to your phone in Germany. You can come down to London for interviews and schedule them so you come in a week and give all your interviews. London is a costly place, you can find cheap places to stay too. But without a job and searching for one will get you depressed(been there and experienced it) |
Is it possible to get life insurance as a beneficiary before the person insured dies? | If the insurance policy is a whole-life (or variable life) policy, it might have a surrender value that the owner of the policy might be able to get by surrendering the policy in whole; if it is a term life policy, it has no surrender value. In many cases, the owner of the policy is also the insured and so ask Uncle Joe whether he would be willing to surrender the life insurance policy and give you the proceeds now instead of making you wait till he passes away. If it is a term life policy, ask him to consider not renewing the policy and from now on, just give you the premium he would have been paying to the insurance company. Whether he will pay you increasing amounts in later years (as a renewable five-year level term policy might require) is a more delicate matter that you can negotiate with him. On the other hand, if the policy owner is Aunt Annie but the insured is Uncle Joe (and you are the beneficiary), talk to Aunt Annie instead; she is the one who can cancel the policy, not Uncle Joe. And for heaven's sake, don't grease the skids to facilitate Uncle Joe's first step onto the stairway to heaven; there are, depending on where you live, various laws prohibiting payments to beneficiaries who have had a hand in arranging for the happy event to occur. |
What headaches will I have switching from Quicken to GnuCash? | I have not used Quicken; I've used GnuCash exclusively. It feels a bit rough with the UI: Balancing that, the data is stored in a gzip-compressed xml file. The compression is also optional, so you can save it as a plain xml file. This means that you have some hope of recovery if you wind up with a corrupted file. (And for programmer-types, you could keep it in source control for additional peace of mind.) My wife and I have been using it for several years now, and has worked well for us. LWN.net had a pair of Grumpy Editor reviews on personal finance software here and here which would be worth reading. |
Are services provided to Google employees taxed as income or in any way? | (Regarding one aspect of the question) Here's a survey suggesting new programmers value "free lunch", old programmers do not care about it: https://stackoverflow.blog/2017/06/12/new-kids-block-understanding-developers-entering-workforce-today/?cb=1 |
Will having a secondary signee with bad credit on a mortgage raise or lower interest? | between two people purchasing a house together, one with good and one with bad credit, will having both persons on the loan raise the interest rates. If the house deed is on both names, generally the Bank would insist the loan should also be on both of your names. This to ensure that Bank has enough leverage to recover the house in case of default. If one of you has bad credit, bank would raise the interest rate, assumption that bad credit would drag the good credit and force him to some activities / actions that could stretch the finance of one with good credit. If timely payments are not made, it would make your good credit to bad. If the house deed is on only on your name and you can get the loan on your own, this would be a better position. If the house deed is on only on your name and you would like to loan to be on both names, then the positive side is credit score of the person with bad credit would start showing improvement over period, provided both of you make timely payments. As pointed out by keshlam, there are enough question where people have entered into agreement without deciding what would happen if they separate. There is no right / wrong answer. It would be best you decide how it would be with respect to the ownership in the house and with respect to payments and if in worst case you part ways, how the settlement should look like. |
Does the bid/ask concept exist in dealer markets? | The Auction Market is where investors such you and me, as well as Market Makers, buy and sell securities. The Auction Markets operate with the familiar bid-ask pricing that you see on financial pages such as Google and Yahoo. The Market Makers are institutions that are there to provide liquidity so that investors can easily buy and sell shares at a "fair" price. Market Makers need to have on hand a suitable supply of shares to meet investor demands. When Market Makers feel the need to either increase or decrease their supply of a particular security quickly, they turn to the Dealer Market. In order to participate in a Dealer Market, you must be designated a Market Maker. As noted already, Market Makers are dedicated to providing liquidity for the Auction Market in certain securities and therefore require that they have on hand a suitable supply of those securities which they support. For example, if a Market Maker for Apple shares is low on their supply of Apple shares, then will go the Dealer Market to purchase more Apple shares. Conversely, if they are holding what they feel are too many Apple shares, they will go to the Dealer Market to sell Apple shares. The Dealer Market does operate on a bid-ask basis, contrary to your stated understanding. The bid-ask prices quoted on the Dealer Market are more or less identical to those on the Auction Market, except the quote sizes will be generally much larger. This is the case because otherwise, why would a Market Maker offer to sell shares to another Market Maker at a price well below what they could themselves sell them for in the Auction Market. (And similarly with buy orders.) If Market Makers are generally holding low quantities of a particular security, this will drive up the price in both the Dealer Market and the Auction Market. Similarly, if Market Makers are generally holding too much of a particular security, this may drive down prices on both the Auction Market and the Dealer Market. |
Is an RRSP always “self-directed”? What makes a “self-directed” RRSP special? | The term self-directed generally refers to RRSP accounts where the account holder has not only the ability to determine a basic investment asset mix (such as can be accomplished even with a limited selection of mutual funds) but, more specifically, the self-directed account holder has a much wider choice of financial instruments beyond mutual funds, GICs, and/or cash savings. A self-directed RRSP generally permits the account holder to also invest or trade directly in financial instruments such as: Those kinds of instruments are not typically available in a non-self-directed mutual fund or bank RRSP. Typical mutual fund or bank RRSPs offer you only their choice of products – often with higher fees attached. Related resources: |
Why are real-term bond yields systematically declining, and what does it mean for investors? | On a longer time scale, the plot thickens: It almost looks random. A large drop in real rates in the mid-70s, a massive spike in the early 80s, followed by a slow multi-decade decline. The chaos doesn't seem to be due to interest rates. They steadily climbed and steadily fell: All that's left is inflation: First, real rates should be expected to pay a moderate rate, so nominal rates will usually be higher than inflation. However, interest rates are very stable over long time periods while inflation is not. Economists call this type of phenomenon "sticky pricing", where the price, interest rates in this case, do not change much despite the realities surrounding them. But the story is a little more complicated. In the early 1970s, Nixon had an election to win and tried to lessen the impacts of recession by increasing gov't spending, not raising taxes, and financing through the central bank, causing inflation. The strategy failed, but he was reelected anyways. This set the precedent for the hyperinflation of the 1970s that ended abruptly by Reagan at the beginning of his first term in the early 1980s. Again, interest rates remained sticky, so real rates spiked. Now, the world is not growing, almost stagnating. Demand for equity is somewhat above average, but because corporate income is decelerating, and the developed world's population is aging, demand for investment income is skyrocketing. As demand rises, so does the price, which for an investor is a form of inverse of the interest rate. Future demand is probably best answered by forecasters, and the monetarist over and undertones still dominating the Federal Reserve show that they have finally learned after 100 years that inflation is best kept "low and stable": But what happens if growth in the US suddenly spikes, inflation rises, and the Federal Reserve must sell all of the long term assets it has bet so heavily on quickly while interest rates rise? Inflation may not be intended, but it is not impossible. |
How can home buying be considered a sound investment with all of that interest that needs to be paid? | Your question isn't great, but I will attempt to answer this piece as it seems really the root of your personal finance question: I want to convince my wife to make this move because it will save us at least 800 month, but she fails to see how buying a second home is financially sound because we have to lose our savings and we have to pay interest on our second home. And... Her logic is it will take almost 5 years to get back our down payment and we have to pay interest as well. So how can this move help our family financially in the long run? ... Is she right? She is mostly wrong. First, consider that there is no "ROI" really on your down payment. Assuming you are paying what your home would sell for the next day, then your "RIO" is already yours (minus realtor fees). She is talking about cash on hand, not ROI. I will use an example without taking into account risk of home markets going down or other risks to ownership. Example: Let's say you pay $2800 a month in mortgage interest+principle at 5.5% apr and $200 a month in taxes+insurance on a $360k loan ($400k house). In this example let's say the same house if you were to rent it is $3800 a month. Understand the Opportunity Cost of renting (the marginal amount it costs you to NOT buy). So far, your opportunity cost is $800 a month. The principle of your house will be increasing with each payment. In our example, it's about $400 for the first payment, and will increase with each payment made while decreasing the interest payment (Suggest you look at an amortization table for your specific mortgage example). So, you're real number is now $1200 a month opportunity cost. Consider also the fact that the $400 a month is sitting in a savings account of sorts. While most savings accounts give you less than 1% in returns and then charge taxes on that gain, your home may (or may not be) much higher than that and won't charge you taxes on the gains when you sell it (If you live in it for a period of time as defined by the IRS.) Let's assume a conservative long term appreciation rate of 3%. That's $12k a year on a $400k house. So, now you're at $2200 a month opportunity cost. In this example I didn't touch on your tax savings of ownership. I also didn't touch on the maintenance cost of ownership or the maintenance cost of renting (your deposit + other fees) which all should be considered. You may have other costs involved in renting. For instance: The cost of not being able to fully utilize your rental as your own house. This may be an even simpler and more convincing way to explain it: On the $2800 mortgage example, you will be paying around $19k in interest and $2400 on taxes, insurance = $23k per year (number could be way different in your example). That is basically throw away money you're never getting back. On the rental, 100% of your rent at $3800 a month is throw away money you're never getting back. That's $45,600 a year. |
What is an “Options Account”? | Options are a derivative product, and in this case, derive their value from an underlying security, a traded stock. An option gives you the right, but not the obligation, to buy a stock at a given price (the strike price) by a given time (the expiration date.) What I just described is a call option. The opposite instrument is a put, giving you the right, but not the obligation, to sell the stock at a given price. Volumes have been written on the subject, but I'd suggest that for a custodial Roth, I'd not activate the ability to trade options. How to get started with options investing? offers a nice introduction to trading options. In my response, I offer an example of a trade that's actually less risky due to the option component. |
Expensive agenda book/organizer. Office expense or fixed asset? | I cannot imagine an organizer being worth enough to consider depreciating the expense over a period of time greater than one year. Also, once you write in an organizer, it's pretty much worthless to anyone else. Talk to your accountant if you'd like, but I cannot see how you would classify a fancy organizer as a fixed asset. |
Why call option price increases with higher volatility | Understanding the BS equation is not needed. What is needed is an understanding of the bell curve. You seem to understand volatility. 68% of the time an event will fall inside one standard deviation. 16% of the time it will be higher, 16%, lower. Now, if my $100 stock has a STD of $10, there's a 16% chance it will trade above $110. But if the STD is $5, the chance is 2.3% per the chart below. The higher volatility makes the option more valuable as there's a highr chance of it being 'in the money.' My answer is an over simplification, per your request. |
What does this statement regarding put options mean? | fennec has a very good answer but i feel it provides too much information. So i'll just try to explain what that sentence says. Put option is the right to sell a stock. "16 puts on Cisco at 71 cents", means John comes to Jim and says, i'll give you 71 cent now, if you allow me to sell one share of Cisco to you at $16 at some point in the future ( on expiration date). NYT quote says 1000 puts that means 1000 contracts - he bought a right to sell 100,000 shares of Cisco on some day at $16/share. Call option - same idea: right to buy a stock. |
Can I sell a stock immediately? | You can*, if the market is open, in a normal trading phase (no auction phase), works, and there is an existing bid or offer on the product you want to trade, at the time the market learns of your order. Keep in mind there are 2 prices: bid and offer. If the current bid and current offer were the same, it would immediately result in a trade, and thus the bid and offer are no longer the same. Market Makers are paid / given lower fees in order to maintain buy and sell prices (called quotes) at most times. These conditions are usually all true, but commonly fail for these reasons: Most markets have an order type of market order that says buy/sell at any price. There are still sanity checks put in place on the price, with the exact rules for valid prices depending on the stock, so unless it's a penny stock you won't suddenly pay ten times a stock's value. *The amount you can buy sell is limited by the quantity that exists on the bid and offer. If there is a bid or offer, the quantity is always at least 1. |
Why is it possible to just take out a ton of credit cards, max them out and default in 7 years? | It may become difficult to rent a car or a hotel room. It may affect your ability to get a job. Some employers now check credit reports and disqualify candidates with a poor credit report. It may affect your ability to get a security clearance or professional bonding. It may affect your ability to find housing. Many landlords check credit reports. You may be harassed morning, noon, and night by collection agencies. This can be theoretically solved by declaring bankruptcy, but the bankruptcy court may force the sale of some of your assets to make payments towards your debt. |
How to get started with options investing? | What is a good resource to learn about options trading strategies? Options are a quite advanced investment form, and you'd do well to learn a lot about them before attempting to dive into this fairly illiquid market. Yale's online course in financial markets covers the Options Market and is a good starting point to make sure you've got all the basics. You may be familiar with most of it, but it's a decent refresher on lingo and Black-Scholes. How can I use options to establish some cash flow from long standing investments while minimizing capital gains expenses? This question seems designed to get people to talk about covered calls. Essentially, you sell call contracts: you let people buy things you already have at a price in the future, at their whim. They pay you for this option, though usually not much if the options aren't in the money. You can think of this as trading any return above the call option for a bit of extra cash. I don't invest with taxable accounts, but there are significant tax consequences for options. Because they expire, there will be turnover in your portfolio, and up front income when you take the sell side. So if you trade in options with close expiration dates, you'll probably end up with a lot of short-term capital gains, which are treated as normal income. One strategy is to trade in broad-based stock index options, which have favorable tax treatments. Some people have abused this though to disguise normal income as capital gains, so it could go away. Obviously the easy approach is to just use a tax advantaged account for options trading. An ETF might also be able to handle the turnover on your behalf, for example VIX is a series of options on S&P500 options. A second strategy I've heard of is buying calls and puts at a given strike price. For example, if you bought Dec '13 calls and puts on SPX @ 115 today, it would cost you about $35 dollars. If the price moves more than 35 dollars away from 115 by DEC '13 (in either direction), you've made a profit. If you reflect on that for a bit, you'll see why VIX is considered a volatility index. I guess I should mention that shorting a stock and buying a put option at the market price are very similar, with the exception that your loss is limited to the price of the option. Is there ever an instance where options investing is not speculative? The term 'speculative' is not well defined. For many people, the answer is no. It's very easy to just buy put options and wait for prices to fall, or call options and wait for prices to rise. Moreover, the second strategy above essentially gives you similar performance to a stock without paying full price. These all fall under the headline of increasing a risk portfolio rather than decreasing it, which I figure is a decent definition of speculation. On the other hand, there are ways to use options minimize risk rather than increase it. You can buy underwater options as portfolio insurance, if your portfolio drops below a certain amount, you still have the right to sell it at a higher one. And the Case-Schiller index is run in part, on the hopes that one day there might be a thriving market for real estate options (or futures). When you buy a home or lend money to someone to buy one, you could buy regional Case-Schiller options to protect you if the regional market tanks. But in all of these cases, it's required for someone else to take the opposite trade. Risk isn't reduced, it's traded around. So technically, there is a speculative element to these as well. I think the proper question here is whether speculation is present, but whether speculation can be put to good ends. Without speculators, the already very thin market for options would shrivel faster. |
Why is gold not a good investment? | I think what the person meant to say is that Gold is not a one stop solution. There's nothing wrong with having Gold in an otherwise diversified portfolio but you need to be aware about the potential downsides: The problem with gold is that its value nowadays depends mainly on investor confidence, or the lack of it (actual demand for gold cannot explain the rise in value gold had after the crisis). If people are afraid the world and currencies with it will go to hell, the gold price will go up. Why? Because if currencies seize to exist, Gold will still be accepted. It can replace currencies. What many people tend to forget: let's consider the extreme example and currencies really cease to exist and all hell breaks lose. What good are gold bars at the bank, or even at home, for that matter? You'll be better off with gold coins to use in barter and to pay off marauders. But that's not about investing anymore, that's survivalism. |
Is it possible to quantify the probability of sudden big movements for a high-volume stock? | Certainly no one knows in advance how much a stock is going to swing around. However, there are measures of how much it has swung around in the past, and there are people who will estimate the probability. First of all, there's a measure of an individual stock's volatility, commonly referred to as "beta". A stock with a beta of 1 tends to rise and fall about as much as the market at large. A stock with a beta of 2, in the meantime, would rise 10% when the market is up 5%. These are, of course, historical averages. See Wikipedia: http://en.wikipedia.org/wiki/Beta_(finance) Secondly, you can get an implied measure of volatility expectations by looking at options pricing. If a stock is particularly volatile, the chance of a big price move will be baked into the price of the stock options. (Note also that other things affect options pricing, such as the time value of money.) For an options-based measure of the volatility of the whole market, see the Volatility Index aka the "Fear Gauge", VIX. Wikipedia: http://en.wikipedia.org/wiki/VIX Chart: http://finance.yahoo.com/q?s=%5EVIX Looking at individual stocks as a group (and there's an oxymoron for you), individual stocks are definitely much more likely to have big moves than the market. Besides Netflix, consider the BP oil spill, or the Tokyo Electric Power Company's Fukushima incident (yow!). I don't have any detailed statistics on quantitatively how much, mind you, but in application, a standard piece of advice says not to put more than 5% of your portfolio in a single company's stock. Diversification protects you. (Alternatively, if you're trying to play Mr. Sophisticated Stock-Picker instead of just buying an index fund, you can also buy insurance through stock options: hedging your bets. Naturally, this will eat up part of your returns if your pick was a good one). |
Are there cons to paying monthly bills with a rewards card and then paying it off monthly? | There are a few potential downsides but they are minor: If you forget to make the payment the interest hit the following month could be significant. With many cards the new charges will be charged interest from the start if the previous payment was late/missed. Just make sure you don't forget to pay the entire bill. If the $5K in monthly bills is a large portion of the credit limit for that credit card you could run into a problem with the grace period. During the three weeks between when the monthly bill closes and the payment is due, new charges will keep rolling in. Plan on needing a credit limit for the card of 2x the monthly bills. Of course you don't have to wait for the due date. Just go online and pay the bill early. If the monthly bills are a significant portion of the total credit limit for all credit cards, it can decrease your credit score because of the high utilization rate. The good news is that over time the credit card company will increase your credit limit thus reducing the downsides of the last two items. Also keep in mind you generally can't pay a credit card bill or loan with a credit card, but many of the other bills each month can be handled this way. |
Should I buy or lease a car given that its not a super luxury car and I only drive 15 miles/d on avg? | If you lease a car, you are paying for the depreciation of a certain number of miles, even if you don't actually use those miles. Since you know you will be well under the standard number of miles when your lease is up, and you already know that you want to keep the car, buying is better than leasing. |
How are days counted when funding a new account within 10 days | If the wording is "within 10 days" then its 10 days. Calendar days. Otherwise they would put "10 business days", for example. Usually, if you need to do something within 10 days from today, the first day to count is today. I would expect "within" to mean that you can fund in any of the days up to the 10th. But that's me, trying to read English as English. Why don't you call the bank and ask them? |
How to find out the amount of preferred stock of Coca Cola Company? | They were issued in 1919 and eliminated in 1926. This means that Coca-Cola redeemed them in 1926 and either converted the preferred's to common stock or paid the preferred investor's back their full par value and took them off the books. |
Earning salary from USA remotely from New Zealand? | Yes. You must register for GST as well, if you will be making over the threshold (currently $60,000). That's probably a bonus for you, as your home office expenses will mostly include GST, but your income will most likely be zero-rated. Check with an accountant or with the IRD directly. Just be certain to put aside enough money from each payment to cover income tax, GST and ACC. You will get a very large bill in your second year of business. |
Payment default penalties on annuities | I don't know how annuities work it's all smoke and mirrors to me. This is a huge red flag to me. I would ask the agent what the penalty is to cancel this contract, and see ho much you can get back. If done right, you should be able to transfer these funds to an IRA or other pretax account. To be clear, I'd make a similar remark if you said your were in a S&P ETF or any investment you don't understand. "Appropriate investment" means little if the investor has no understanding of what they are buying. Update in repose to comments - |
Shared groceries expenses between roommates to be divided as per specific consumption ratio and attendance | So your whole approach, and the attempt to scale this is flawed. You will alienate roomates, provoke arguments, and make everyone's life more difficult. There are too many variables and unforeseen possibilities. For instance: "Why should I have to pay for Joe to go buy the expensive organic milk when I'm fine with the cheap stuff?" "I planned on being here for 20 days, but was gone that long weekend, recalculate everything please." "I already paid for this month, but now you're asking for more because James wanted to recalculate for a long weekend?" The right way to do this is to set up loose, reasonable agreement among the participants and treat that as a contract, but with some flexibility/mercy on small dollar amount items. For instance: There are 5 of us, so everyone provides food (and shops/cooks) one night a week. We're solo on Friday and Saturday (people eat out more then anyway), and everyone puts in $10/week (or whatever) for breakfast cereal, snacks, etc. If you can't be here on your night, work out to trade with someone. If you miss out on a meal... oh well. As long as people feel like they have a say in the discussion generating this and it's not dictated to them, then most of the time this is far superior. If people need this level of detail, then perhaps those people should live alone or move in with Sheldon Cooper from "The Big Bang Theory". |
Reinvesting dividends and capital gains | I have found The DRiP Investing Resource Center to be a useful resource for more information about DRIP investing. Moneypaper.com offers a list of companies offering both direct purchase options and dividend reinvestment plans. For those offering dividend reinvestment plans, but not direct purchase, you have the option of using a service to purchase your first shares to enroll in the DRIP program. The tax paperwork for DRIPs is a pain due to the partial shares purchased over time when you have to figure out your own cost basis upon sale of shares , but a spreadsheet and a FIFO (first in first out) approach makes it not too much of a headache. -MU |
What is the incentive for a bank to refinance a mortgage at a lower rate? | The big one is to keep you from refinancing it with someone else to get a better rate. There may also be some funny-money reasons having to do with being able to count this as a new sale. |
How to read bond yield quotes? What do the time, coupon, price, yield, and time mean? | The 1 month and 1 year columns show the percentage change over that period. Coupon (coupon rate) is the amount of interest paid on the bond each period (as specified on the coupon itself. Price is the normalised price of the bond; the price of taking a position of $100 worth of the principal in the bond. Yield is the interest rate that you would receive by buying at that price (this is the inverse of the price). The time is the time of the quote presented. |
If a stock is selling for less than book value, is the company headed for bankruptcy? | An answer can be found in my book, "A Modern Approach to Graham and Dodd Investing," p. 89 http://www.amazon.com/Modern-Approach-Graham-Investing-Finance/dp/0471584150/ref=sr_1_1?s=books&ie=UTF8&qid=1321628992&sr=1-1 "If a company has no sustained cash flow over time, it has no value...If a company has positive cash flow but economic earnings are zero or less, it has a value less than book value and is a wasting asset. There is enough cash to pay interim dividends, bu the net present value of the dividend stream is less than book value." A company with a stock trading below book value is believed to be "impaired," perhaps because assets are overstated. Depending on the situation, it may or may not be a bankruptcy candidate. |
How to get into real estate with a limited budget | You are neglecting a few very important things around real estate transactions in Belgium So in the end a 300K building may cost you more than 340K, let's take some unexpected costs into account and use 350K for remainder of calculation. Even worse if it's newly built (which I doubt) the first percentage is 21% (VAT) instead of 10%. All these costs can be checked on the useful site www.hoeveelkostmijnhuis.be Now, aside from that most banks will and actually have to demand you pay part of all this yourself. So you can't do 5*60K (or 5*70K now). Mostly banks will only finance up to about 90% of the value of the building, so 90% of 300K, which is 270K (5*54K), the other 80K (5*16K) you have to pay yourselves. But it could be the bank goes as low as 80%. Another part to complicate the loan is how much you can pay a month. Since the mortgage crisis they're very strict on this. There are lots of banks that will not allow you to make monthly payments of more than 33% of your monthly income when you are going to live there. This is a nuisance even when buying one house, you want to buy 2. Odds seem low they'll accept high monthly payments because you either need an additional loan or need to pay rent, so don't count on a 5y deal. Now this is all based on a single loan, it will probably be a bit different with multiple loans. However, it is unlikely any bank will accept this, even if all loans are with the same bank. You need to consider the basics of a real-estate loan: A bank trusts you can pay it off and if not they can seize the real-estate hoping to regain their initial investment. It's very hard to seize a complete asset if only one out of 5 loan-takers defected. You could maybe do this with another less restrictive/higher risk type of loan but rates will be a lot higher (think 5-6% instead of 1.5%). And don't underestimate the running costs: for that price and 5 rooms in that city you're likely looking at an older building. Expect lots of cost for maintenance and keeping the building according to code. Also expect costs for repairs (you rent to students...). You'll also have to pay quite a bit of money on insurances and of course on real estate taxes (which are average in Ghent). Also factor in that currently there is not a housing shortage for Ghent students so you might not always have a guaranteed occupation. Also take into account responsibility: if a fire breaks out or the house collapses or a gas leak occurs, you might be sued. It doesn't matter if you're at fault, it's costly and a big nuisance. Simply because you didn't think of any of this: don't do this. It's better to invest in real estate funds. But if you still think you can do better then all the landlords Ghent is riddled with, don't do it as a personal investment. Create a BVBA, put some investment in here (like 10-20K each), approach a bank with a serious business plan to get the rest of the money as a loan (towards a single entity - your BVBA) and get things going. When the money comes in you can either give yourselves a salary or pay out profits on the shares. You may be confused about how rich you can become because we as a nation tend to overestimate the profitability of real estate. It's really not that much better than other investments (otherwise everybody would only invest in real estate funds). There are a few things that skew our vision however: |
What Did Benjamin Graham Mean by Earnings Stability in The Intelligent Investor? | Yes - this is exactly what it means. No losses (negative earnings). With today's accounting methods, you might want to determine whether you view earnings including or excluding extraordinary items. For example, a company might take a once-off charge to its earnings when revising the value of a major asset. This would show in the "including" but not in the "excluding" figure. The book actually has a nice discussion in Chapter 12 "Things to Consider About Per-Share Earnings" which considers several additional variables to consider here too. Note that this earnings metric is different from "Stock Selection for the Defensive Investor" which requires 10 years. PS - My edition (4th edition hardback) doesn't have 386 pages so your reference isn't correct for that edition. I found it on page 209 in Chapter 15 "Stock Selection for the Enterprising Investor". |
Buy securities at another stock exchange | In a simple statement, no doesn't matter. Checked on my trade portal, everything lines up. Same ISIN, same price(after factoring in FX conversions, if you were thinking about arbitrage those days are long gone). But a unusual phenomenon I have observed is, if you aren't allowed to buy/sell a stock in one market and try to do that in a different market for the same stock you will still not be allowed to do it. Tried it on French stocks as my current provider doesn't allow me to deal in French stocks. |
What to bear in mind when considering a rental home as an investment? | Started to post this as a comment, but I think it's actually a legitimate answer: Running a rental property is neither speculation nor investment, but a business, just as if you were renting cars or tools or anything else. That puts it in an entirely different category. The property may gain or lose value, but you don't know which or how much until you're ready to terminate the business... so, like your own house, it really isn't a liquid asset; it's closer to being inventory. Meanwhile, like inventory, you need to "restock" it on a fairly regular basis by maintaining it, finding tenants, and so on. And how much it returns depends strongly on how much effort you put into it in terms of selecting the right location and product in the first place, and in how you market yourself against all the other businesses offering near-equivalent product, and how you differentiate the product, and so on. I think approaching it from that angle -- deciding whether you really want to be a business owner or keep all your money in more abstract investments, then deciding what businesses are interesting to you and running the numbers to see what they're likely to return as income, THEN making up your mind whether real estate is the winner from that group -- is likely to produce better decisions. Among other things, it helps you remember to focus on ALL the costs of the business. When doing the math, don't forget that income from the business is taxed at income rates, not investment rates. And don't forget that you're making a bet on the future of that neighborhood as well as the future of that house; changes in demographics or housing stock or business climate could all affect what rents you can charge as well as the value of the property, and not necessarily in the same direction. It may absolutely be the right place to put some of your money. It may not. Explore all the possible outcomes before making the bet, and decide whether you're willing to do the work needed to influence which ones are more likely. |
How to account for startup costs for an LLC from personal money? | An LLC is a pass-through entity in the USA, so profits and losses flow through to the individual's taxes. Thus an LLC has a separate TIN but the pass-through property greatly simplifies tax filings, as compared to the complicated filings required by C-corps. |
Do I need to pay taxes in India? | Do I need to pay taxes in India in this scenario? For India tax purposes, you would still qualify as "Resident Indian". As a resident Indian you have to pay taxes on Global income. It is not relevant whether you transfer the money back to India to keep in US. The income is generated and taxable. Depending on your contract, presumably you are working as a free lance; certain expenses are allowed to be deducted from your income, for example if you purchase equipment to help carry out the work, stay / entertainment costs, etc. Consult a professional CA who should be able to guide you on what is eligible and what is not. The balance along with your other income will be taxed as per tax brackets. There is exemption for certain category of workers, mostly in entertainment industry where such income is not taxable. This does not apply to your case. |
Is there a debit card that earns miles (1 mile per $1 spent) and doesn't have an annual fee? | I don't know of any that are comparable to credit cards. There's a reason for that. Debit cards, being newer, have a much lower interchange rate. Since collecting on debt is risky and less predictable, rewards / miles are paid from those interchange fees. This means with a debit card there's less money to pay you with. So what can you do? Assuming your credit isn't terrible, you can just open a credit card account and pay in full for purchases by the grace period. I don't know how all cards work, but my grace period allows me to pay in full by the billing date (roughly a month from purchase) and incur no finance charges. In effect, I get a small 30 day loan with no interest, and a cash back incentive (I dislike miles). You're also less liable for fraud via CC than debit. |
Growth of unrealized gains in tax-managed index funds | I don't know that I can answer the question fully, but 2 points. The percent that represent capital gains certainly can't exceed 100. Did you mean 50% but the 500% is a typo? More important, funds held in retirement accounts have no issue with this, Cap Gains are meaningless within tax deferred accounts. I don't know the ratio of stocks held in these accounts vs outside, just that the 2011 year end total retirement account worth was $17 trillion. (That's 12 zeros) This strikes me as a high ratio, although more numbers digging is in order. |
Clarify on some Stocks Terminology | Yep, you have it pretty much right. The volume is the number of shares traded that day. The ticker is giving you the number of shares bought at that price in a given transaction, the arrow meaning whether the stock is up or down on the day at that price. Institutional can also refer to pensions, mutuals funds, corporates; generally any shareholder that isn't an individual person. |
Can I invest in gold through Vanguard (Or another instrument that should perform well in financial crisis)? | In 2008, 10 year treasuries were up 20.1%, to gold's 4.96%. Respectfully, if I were certain if a market drop, I'd just short the market, easily done by shorting SPY or other index ETFs. If you wish to buy gold, the easiest and least expensive way is to buy an ETF, GLD to be specific. It trades like a stock, for what that's worth. There are those who would suggest this is not like buying gold, it's just 'paper'. I believe otherwise. It's a non leveraged, fully backed ETF. I try not to question other's political or religious beliefs or as it pertains to this ETF, their conspiracy theories. |
Do I need to write the date on the back of a received check when depositing it? | You do not need to write anything on the second line. There are a variety of helpful things that you can add, e.g.: For Deposit Only. This tells the bank to deposit the check into your account and ignore other signatures. Your account number. Especially useful when added to "For Deposit Only". A countersignature. This tells the bank to pay the check to someone other than you. Countersigned checks used to be much more common than they are now. Someone who didn't have a bank account might ask someone who did to cash a check for them. See also: Four ways to endorse a check which gives the correct format for endorsing a check in these ways. |
Negative Balance from Automatic Options Exercise. What to do? | Automatic exercisions can be extremely risky, and the closer to the money the options are, the riskier their exercisions are. It is unlikely that the entire account has negative equity since a responsible broker would forcibly close all positions and pursue the holder for the balance of the debt to reduce solvency risk. Since the broker has automatically exercised a near the money option, it's solvency policy is already risky. Regardless of whether there is negative equity or simply a liability, the least risky course of action is to sell enough of the underlying to satisfy the loan by closing all other positions if necessary as soon as possible. If there is a negative equity after trying to satisfy the loan, the account will need to be funded for the balance of the loan to pay for purchases of the underlying to fully satisfy the loan. Since the underlying can move in such a way to cause this loan to increase, the account should also be funded as soon as possible if necessary. Accounts after exercise For deep in the money exercised options, a call turns into a long underlying on margin while a put turns into a short underlying. The next decision should be based upon risk and position selection. First, if the position is no longer attractive, it should be closed. Since it's deep in the money, simply closing out the exposure to the underlying should extinguish the liability as cash is not marginable, so the cash received from the closing out of the position will repay any margin debt. If the position in the underlying is still attractive then the liability should be managed according to one's liability policy and of course to margin limits. In a margin account, closing the underlying positions on the same day as the exercise will only be considered a day trade. If the positions are closed on any business day after the exercision, there will be no penalty or restriction. Cash option accounts While this is possible, many brokers force an upgrade to a margin account, and the ShareBuilder Options Account Agreement seems ambiguous, but their options trading page implies the upgrade. In a cash account, equities are not marginable, so any margin will trigger a margin call. If the margin debt did not trigger a margin call then it is unlikely that it is a cash account as margin for any security in a cash account except for certain options trades is 100%. Equities are convertible to cash presumably at the bid, so during a call exercise, the exercisor or exercisor's broker pays cash for the underlying at the exercise price, and any deficit is financed with debt, thus underlying can be sold to satisfy that debt or be sold for cash as one normally would. To preempt a forced exercise as a call holder, one could short the underlying, but this will be more expensive, and since probably no broker allows shorting against the box because of its intended use to circumvent capital gains taxes by fraud. The least expensive way to trade out of options positions is to close them themselves rather than take delivery. |
Are wash sale rules different for stocks and ETFs / Mutual Funds? | The IRS rules are actually the same. 26 U.S. Code § 1091 - Loss from wash sales of stock or securities In the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities, then no deduction shall be allowed... What you should take away from the quote above is "substantially identical stock or securities." With stocks, one company may happen to have a high correlation, Exxon and Mobil come to mind, before their merger of course. With funds or ETFs, the story is different. The IRS has yet to issue rules regarding what level of overlap or correlation makes two funds or ETFs "substantially identical." Last month, I wrote an article, Tax Loss Harvesting, which analyses the impact of taking losses each year. I study the 2000's which showed an average loss of 1% per year, a 9% loss for the decade. Tax loss harvesting made the decade slightly positive, i.e. an annual boost of approx 1%. |
Are you preparing for a possible dollar (USD) collapse? (How?) | Invest in other currencies and assets that have "real" value. And personally I don't count gold as something of real value. Of course its used in the industry but besides that its a pretty useless metal and only worth something because everybody else thinks that everybody thinks its worth something. So I would buy land, houses, stocks, ... |
How is Butterfly Trade Strategy good if the mid Strike price is already past? | One way to look at a butterfly is to break it into two trades. A butterfly is actually made up of two verticals... One is a debit vertical: buy 490 put and sell the 460 put. The other is a credit vertical: sell a 460 put and buy a 430 put. If someone believes Apple will fall to 460, that person could do a few things. There are other strategies but this just compares the three common ones: 1) Buy a put. This is expensive and if the stock only goes to 460 you overpay for it. 2) Buy a put vertical. This is less expensive because you offset the price of your put. 3) Buy a butterfly. This is cheapest of the three because you have the vertical in #2 as well as a credit vertical on top of that to offset your cost. The reason why someone would use the butterfly is to pay less upfront while capitalizing on a fall to 460. Of the three, this would be the better strategy to use if that happens. But REMEMBER that this only applies if the trader is right and it goes to 460. There is always a trade off for every strategy that the trader must be aware of. If the trader is wrong, and Apple goes to say 400, the put (#1) would make the most money and the butterfly(#3) would lose money while the vertical (#2) would still gain. So that is what you're sacrificing to get the benefits of the butterfly. Also helps to draw a diagram to compare the strategies. |
How do I protect myself from a scam if I want to help a relative? | Since you mentioned that it is your close relative, he has never done enything dodgy and is wise with his money, then I would take it that you have some implicit trust in him. Now your options in this case are limited to either saying an outright no, which may impact familial ties adversely or to do as he has requested. One way could be to ask him for a mail requesting a short term loan and then transfer the money to his account. Then after a few days/weeks he repays the money back to your account. Now, this may or may not be 100% black & white depending on the legalities of your country but in most countries/cultures giving and taking of personal loans between friends/families is quite common. |
Protecting Gains: Buying a Put vs. Leveraged Bear Market vs. Liquidating Long Positions? | Buying a put is hedging. You won't lose as much if the market goes down, but you'll still lose capital: lower value of your long positions. Buying an ultrashort like QID is safer than shorting a stock because you don't have the unlimited losses you could have when you short a stock. It is volatile. It's not a whole lot different than buying a put; it uses futures and swaps to give the opposing behavior to the underlying index. Some places indicate that the tax consequences could be severe. It is also a hedge if you don't sell your long positions. QID opposes the NASDAQ 100 which is tech-heavy so bear (!) that in mind. Selling your long positions gets you out of equities completely. You'll be responsible for taxes on capital gains. It gets your money off of the table, as opposed to playing side bets or buying insurance. (Sorry for the gambling analogy but that's a bit how I feel with stock indices now :) ). |
If one owns 75% of company shares, does that mean that he would have to take upon himself 75% of the company's expenses? | You can look at the company separately from the ownership. The company needs money that it doesn't have, therefore it needs to borrow money from somewhere or go bankrupt. And if they can't get money from their bank, then they can of course ask people related to the company, like the two shareholders, for a loan. It's a loan, like every other loan, that needs to be repaid. How big the loan is doesn't depend on the ownership, but on how much money each one is willing and capable of giving. The loan doesn't give them any rights in the company, except the right to get their money back with interest in the future. Alternatively, such a company might have 200 shares, and might have given 75 to one owner and 25 to the other owner, keeping 100 shares back. In that case, the shareholders can decide to sell some of these 100 shares. I might buy 10 shares for $1,000 each, so the company has now $10,000 cash, and I have some ownership of the company (about 9.09%, and the 75% and 25% shares have gone down, because now they own 75 out of 110 or 25 out of 110 shares). I won't get the $10,000 back, ever; it's not a loan but the purchase of part of the company. |
How does a lender compute equity requirement for PMI? | Do you have any legal options? Not really. Citi is under no obligation to refinance your loan on your terms. But that goes both ways, and you are under no obligation to refinance with Citi! Get more quotes from another lender. It'll feel really good when you find a lender that wants your business. You might get a better deal. And think how good it will feel to cut ties with Citi! |
Can a company stop paying dividends? | Dividends are supposed to be paid from company profits (in the current or previous financial years), there are nuances around what profits mean from country to country, but the link is the UK definition from the HMRC. Profits from previous financial years are commonly called retained earnings. There are a few items around this |
Bank will not accept loose change. Is this legal? | Is this even legal? How can a bank refuse to deposit legal tender in the United States? Legal for all debts, public or private, doesn't mean quite what I used to think, either. Per The Fed: This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise. Yes, they can refuse loose change. Also, they aren't refusing your deposit, just requiring that it be rolled. What do I do with my change? I do not want to spend the time rolling it, and I am not going to pay a fee to cash my change. There aren't many other options, change is a nuisance. I believe Coinstar machines reduce/remove their fee if you exchange coins for gift cards, so that might be the best option for convenience and retaining value. |
operating income | Sedar is I guess the Canadian equivalent of EDGAR. You can find the company's filings there. Here's a picture from their filings. Can't post the link, if you go and find the filing through Sedar you'll know why (it's not as nice a site as EDGAR). The 4.8 million is from unrealized gain on biological assets. So that's what it is. The reason, I think, as to why Operating Income is a positive 2.67 even though Operating Expense and Gross Profit are both negative is because Google Finance backed into Operating Expense. Operating Income is the same between the two sources, it's just the unrealized gain that moves. |
Exercise an out of the money option | For listed options in NYSE,CBOE, is it possible for an option holder to exercise an option even if it is not in the money? Abandonment of in-the-money options or the exercise of out-of-the-money options are referred as contrarian instructions. They are sometimes forbidden, e.g. see CME - Weekly & End-of-Month (EOM) Options on Standard & E-mini S&P 500 Futures (mirror): In addition to offering European-style alternatives (which by definition can only be exercised on expiration day), both the weekly and EOM options prohibit contrarian instructions (the abandonment of in-the-money options, or the exercise of out-of-the-money options). Thus, at expiration, all in-the-money options are automatically exercised, whereas all options not in-the-money are automatically abandoned. |
Section 179 vs depreciation of laptop | The CPA's mention of $2,500 is probably referring to the recently increased de minimis safe harbor under the final tangible property regulations (used to be $500) without an applicable financial statement. The IRS will not challenge your choice of expense or capitalization on amounts on or below $2500 if you elect the de minimis safe harbor election on your return. However, you must follow whatever you're doing for your books. (So if you are capitalizing your laptops for book purposes, you would also need to capitalize for tax purposes). Section 179 allows you to expense property that you would have otherwise have had to capitalize and depreciate. Section 179 can be annoying, especially if your LLC is treated as a passthrough, because there are recapture provisions when you dispose of the asset too early. For the tax return preparer, it makes the return preparation much more simple if there are no fixed assets to account for in the first place, which is quite possible if you are expensive all items/invoices less than $2,500. |
Paying off loans early, or is there some way to reduce extortionate interest charges? | My husband made a similar car loan decision when he was younger and didn't have an established credit history / favourable credit rating. As a result, he ended up paying triple what the car was worth, because of the interest. When we consolidated our finances, this ugly loan was first on our list of priorities to change, convert, eliminate, but unfortunately, in our case, the terms of the loan were such that only the lender benefited. There was no incentive to pay off the loan early, in fact, we would have to have paid all the future interest at once, without saving a penny. So check the terms of your loan - hopefully you're better off than we were. In our case, the only upside we could figure was the lesson of "live and learn"! |
How can I calculate interest portion of income when selling a stock? | Their interest expense was $17M. Where you see $5.14/sh in Key Statistics, any daily interest received is more than canceled out by the expense paid at the same time. I understand your concern, but this company is not "sitting on cash" as are Apple, Google, etc. Short term rates are well below 1%, 1yr tbill looks like about .2%. So strictly speaking, each share might have 1 cent interest you need to concern yourself with. Disclaimer to other readers - This has nothing to do with taxes. OP is asking about a specific part of the company cash flow. His worst case is $1 per 100 shares. |
Income tax on international income with money not deposited in India | Three points for you to keep in mind. 1. In the very first year, you should have 182 days outside India. So that in the year when you start your consultancy, you will not have any liability to pay tax on earning abroad. 2. Although you may be starting a consultancy abroad, if you do any services in India, there will be withholding tax depending on the country in which you have started the consultancy business. 3. Whatever money you repatriate is not taxable in India. However, if you you repatriate the money as gift to anyone who is not a relative, will be taxed in his/her hand. |
Do companies that get taken-over have to honour the old gift card/certificate? | It depends completely on the nature of the takeover. When a business is bought, the new owner takes on the obligations of the prior owner, the debts don't just go away. When a business files for bankruptcy, its debts may get discharged, and gift card holders can easily be the first ones to get nothing back. A case in point was Sharper Image who stopped honoring gift cards even while the doors were open as they filed for bankruptcy. |
How to pay bills for one month while waiting for new job? | The first thing I would try is to take out a loan from a local credit union. If you don't know of any that you're eligible for, start looking at the National Credit Union Administration's Credit Union Locator. You should be able to get a good rate since your credit is so good. If for whatever reason you can't get the credit union loan, I would open another credit card. Try hard to get the loan though, because using a credit card will most likely be significantly more expensive. If you can't cover your cash-only expenses with cash you already have, make sure that you can get cash from the card. For example, one of my cards regularly sends me checks that I could write to myself to get cash, but be careful with this strategy. Usually the interest is much higher than normal purchases. Either way, until you've paid off this emergency debt and built up an emergency fund of 3-6 months of expenses, cut your expenses as much as possible. This Experian article has some good tips: |
Health insurance lapsed due to employer fraud. How to get medications while in transition? | Your doctor may also have free samples available. You could call, explain your situtation and ask to see if they have any free samples. |
If banksimple.com is not a bank, what is it? | I don't see how this concept takes off. First and foremost, BankSimple is NOT a bank but a tech company masquerading as one. BankSimple leaves industry regulation and treasury management -- the CORE of banking, to outside parties. Call me old fashioned, but I prefer to have as few stops between me and my money as possible. If not for a fear of losing it in a robbery and inability to earn interest, I'd shove it under a mattress. So why would I want to bank with an intermediary, who admittently doesn't understand how the process works? How is that "looking out for my interests"? And how is your security better than other institutions that offer 128-bit encryption and multiple security questions to test a customer's identity? I'd like to add that not charging overdraft fees and providing lines of credit to help customers out in the event they spend more than they have is nice in concept, but what happens when those same customers do not make deposits to cover their shortfalls? When it comes to money, people will take advantage of any opportunities they have to circumvent the system. Especially if funds are tight. |
Is it a good idea to get an unsecured loan to pay off a credit card that won't lower a high rate? | Go where your money is treated best. If you can lower your APR, great. It should help a little bit with getting a mortgage if you can reduce your payment. Your debt-to-income ratio would go down. |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.