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Should I save for my children's university education in Canada, or am I better off paying off loans and gaining debt room?	[ "589208" ]	[ "At the very least I'd look closely at what you could get from the RESP (Registered Education Savings Plan). Depending on your income the government are quite generous with grants and bonds you can get over $11,000 of 'free' money if you qualify for everything CESG - Canada Education Savings Grant By applying for ...
Is a credit card deposit a normal part of the vehicle purchase process	[ "261673" ]	[ "\"Unfortunately, it's not unusual enough. If you're looking for a popular car and the dealer wants to make sure they aren't holding onto inventory without a guarantee for sale, then it's a not completely unreasonable request. You'll want to make sure that the deposit is on credit card, not cash or check, so you ...
How will I pay for college?	[ "335429", "10006", "348878", "128878", "302829" ]	[ "\"First, it's clear from your story that you very likely should be able to receive some financial aid. That may be in the form of loans or, better, grants in which you just get free money to attend college. For example, a Pell grant. You won't get all you'd need for a free ride this way, but you can really make...
What are futures and how are they different from options?	[ "357324", "302164" ]	[ "Cart's answer is basically correct, but I'd like to elaborate: A futures contract obligates both the buyer of a contract and the seller of a contract to conduct the underlying transaction (settle) at the agreed-upon future date and price written into the contract. Aside from settlement, the only other way either p...
How exactly do dividend reinvestment plans (DRIPs) work?	[ "61787" ]	[ "I think Wikipedia offers a very good explanation: A dividend reinvestment program or dividend reinvestment plan (DRIP) is an equity investment option offered directly from the underlying company. The investor does not receive quarterly dividends directly as cash; instead, the investor's dividends are directly rein...
Should I talk about my stocks?	[ "411536", "409086" ]	[ "I like your question and think it is a pretty good one. Generally speaking I would not suggest talking about your stock picks or wealth. Here is why: 1) Most people are broke. Seventy-eight percent of the US population report living paycheck to paycheck. More than a majority do not have enough in savings to c...
Can a company control its stock through contracts with stockholders?	[ "177648" ]	[ "Your first scenario, involving shareholders in a private corp being limited by a contractual agreement, is common in practice. Frequent clauses include methods of valuing the shares if someone wants to sell, first right of refusal [you have to attempt to sell to the other shareholders, before you can sell to a 3rd...
Should I move my money market funds into bonds?	[ "97793", "34925", "559927", "500815", "148541", "498848" ]	[ "It depends how much risk you're prepared to accept. The short-term risk-free rate of return at present is something in the vicinity of 0.1% (three month US treasuries are currently yielding 0.08%), so anything paying a higher rate on money that's accessible quickly will involve some degree of risk -- the higher th...
Whole life insurance - capped earnings	[ "93332", "218484", "272590" ]	[ "\"The question that I walk away with is \"\"What is the cost of the downside protection?\"\" Disclaimer - I don't sell anything. I am not a fan of insurance as an investment, with rare exceptions. (I'll stop there, all else is a tangent) There's an appeal to looking at the distribution of stock returns. It looks a...
How are startup shares worth more than the total investment funding?	[ "34437", "225459", "593003" ]	[ "\"What littleadv said is correct. His worth is based on the presumed worth of the total company value (which is much greater than all investment dollars combined because of valuation growth)*. In other words, his \"\"worth\"\" is based on the potential return for his share of ownership at a rate based on the late...
Is it better to buy put options or buy an inverse leveraged ETF?	[ "30427", "171784", "294688" ]	[ "You don't have to think it is going down, it is currently trending down as on a weekly chart there are lower lows and lower highs. Until there is a higher low with confirmation of a higher high, the downtrend will continue. The instrument you use to profit from a market drop depends on your risk profile, the time...
Interest payments for leveraged positions	[ "543811" ]	[ "\"I think to some extent you may be confusing the terms margin and leverage. From Investopedia Two concepts that are important to traders are margin and leverage. Margin is a loan extended by your broker that allows you to leverage the funds and securities in your account to enter larger trades. In order to use ma...
How much principal do I get back with a target-maturity ETF?	[ "331108" ]	[ "Adding a couple more assumptions, I'd compute about $18.23 would be that pay out in 2018. This is computed by taking the Current Portfolio's Holdings par values and dividing by the outstanding shares(92987/5100 for those wanting specific figures used). Now, for those assumptions: Something to keep in mind is that...
Receiving partial payment of overseas loan/company purchase?	[ "489044" ]	[ "\"Is it equity, or debt? Understanding the exact nature of one's investment (equity vs. debt) is critical. When one invests money in a company (presumably incorporated or limited) by buying some or all of it — as opposed to lending money to the company — then one ends up owning equity (shares or stock) in the comp...
Why is the bid-ask spread considered a cost?	[ "151391", "580364", "79766" ]	[ "Your assets are marked to market. If you buy at X, and the market is bidding at 99.9% * X then you've already lost 0.1%. This is a market value oriented way of looking at costs. You could always value your assets with mark to model, and maybe you do, but no one else will. Just because you think the stock is worth...
What to do with south african currency free fall	[ "592251", "255769" ]	[ "Use other currencies, if available. I'm not familiar with the banking system in South Africa; if they haven't placed any currency freezes or restrictions, you might want to do this sooner than later. In full crises, like Russian and Ukraine, once the crisis worsened, they started limiting purchases of foreign cur...
Over how much time should I dollar-cost-average my bonus from cash into mutual funds?	[ "403226", "535732", "268772", "250530" ]	[ "The OP invests a large amount of money each year (30-40k), and has significant amount already invested. Some in the United States that face this situation may want to look at using the bonus to fund two years worth of IRA or Roth IRA. During the period between January 1st and tax day they can put money into a IRA...
Is there any data that shows how diversifying results in better returns than just sticking to an all-stock portfolio?	[ "569849" ]	[ "\"This paper by a Columbia business school professor says: The standard 60%/40% strategy outperforms a 100% bond or 100% stock strategy over the 1926-1940 period (Figure 5) and over the 1990-2011 period (Figure 6). This is based on actual market data from those periods. You can see the figures in the PDF. These ...
How some mutual funds pay such high dividends	[ "101188" ]	[ "Look at their dividend history. The chart there is simply reporting the most recent dividend (or a recent time period, in any event). GF for example: http://www.nasdaq.com/symbol/gf/dividend-history It's had basically two significant dividends and a bunch of small dividends. Past performance is not indicative o...
401K - shift from agressive investment to Money Market	[ "39566", "129997" ]	[ "If you look at history, it shows that the more people predict corrections the less was the chance they came. That doesn't prove it stays so, though. 2017 is not any different than other years in the future: Independent of this, with less than ten years remaining until you need to draw from your money, it is a good...
Good books for learning about tax strategy/planning	[ "549401", "399203" ]	[ "Keep in mind that chasing after tax savings tends to not be a good way of saving money. What is a good strategy? Making sure that you take all the deductions you are entitled to. What is a bad strategy: You asked for a book recommendation. The problem is that I don't know of any books that cover all these topics....
Are warehouse clubs like Costco and Sam's Club worth it?	[ "218149", "454111", "231660", "202116", "53531", "150721", "512108" ]	[ "We were members at costco, but decided not to renew. Meat was a definite cost savings, and laundry detergent as well. Diapers used to be a huge savings, but loblaws seems to be pricing things better now. We did by a bunch of Kirkland brand diapers and wipes before the membership ended. The problem we had was th...
Costs around a modern crowd-sourced hedge fund	[ "65782" ]	[ "\"Your inference in #1 is incorrect. The million dollars he has contributed is going to be part of the assets of the fund. This is common practice and is a way for the founder to express confidence that the fund will make money. He wants you to come up with a model that he can then use to trade those assets. P...
How is initial stock price (IPO) of a stock determined	[ "386364" ]	[ "Who determines company value at IPO? The Owners based on the advice from Lead Bankers and other Independent auditors who would determine the value of the company at the time of listing. At times instead of determining a fixed price a range is given [lower side and higher side]. The Market participants [FI / Instit...
Money transfer from India to USA	[ "203889", "553205" ]	[ "We have a house here in India worth Rs. 2 Crores. We want to sell it and take money with us. Selling the house in India will attract Capital Gains Tax. Essentially the price at which you sell the property less of the property was purchased [or deemed value when inherited by you]. The difference is Capital Gains. ...
Renters Liability in Case of Liability Claims for Property Damage or Fire	[ "215066", "153285" ]	[ "\"The truth is anyone can sue anyone for anything. So yes you could be sued, but the more important part to measure is the probability of success. While this is probably more of a legal stack exchange question, in order for a successful suit there has to be proven at least some negligence on your part in the si...
Planning to invest in stock, age 16	[ "383532", "219995" ]	[ "\"First of all, since you're 16 - you will not invest in anything. You cannot, you're a minor. You cannot enter contracts, and as such - you cannot transact in property. Your bank accounts are all UGMA accounts. I.e.: your guardian (or someone else who's the trustee on the account) will be the one transacting, not...
Why would a company issue a scrip dividend and how will this issue affect me?	[ "217006", "162454" ]	[ "Am I correct in understanding that a Scrip Dividend involves the issue of new shares instead of the purchase of existing shares? Yes. Instead of paying a cash dividend to shareholders, the company grants existing shareholders new shares at a previously determined price. This allows shareholders who join the progra...
Can you step up your cost basis indefinitely via the 0% capital gains rate?	[ "67276", "290317" ]	[ "\"Your real question, \"\"why is this not discussed more?\"\" is intriguing. I think the media are doing a better job bringing these things into the topics they like to ponder, just not enough, yet. You actually produced the answer to How are long-term capital gains taxed if the gain pushes income into a new tax ...
Deductions greater than Income : Traditional IRA to Roth Conversion?	[ "30037", "152354" ]	[ "\"Yes. A most emphatic yes. I suggest you look at your 2014 return and project what 2015 will look like. I'd convert enough to \"\"top off\"\" the 15% bracket. Note, if you overshoot it, and in April 2016, see that you are say $5K into the 25% rate, you can just recharacterize the amount you went over and nail th...
What happens if a Financial Services Company/Stockbroker goes into administration in the UK?	[ "370212", "24306" ]	[ "Nothing. Stockbrokers set up nominee accounts, in which they hold shares on behalf of individual investors. Investors are still the legal owners of the shares but their names do not appear on the company’s share register. Nominee accounts are ring-fenced from brokers’ other activities so they are financially secur...
I spend too much money. How can I get on the path to a frugal lifestyle?	[ "515440", "325973", "464753", "264530", "340009", "546911", "17448", "210302", "91093", "66744", "129975", "573725", "289483", "423035", "241599", "543691", "407218" ]	[ "\"My father imparted this advice to me when I was a teenager, and it hasn't failed me yet. > Pay yourself first What this means is that the first \"\"bill\"\" you pay should always be your savings. Preferably in a way that automatically comes out of your paycheck or account without requiring you to take an active ...
Is there any reason to choose my bank's index fund over Vanguard?	[ "189868", "520963", "453542", "544236" ]	[ "That expense ratio on the bank fund is criminally high. Use the Vanguard one, they have really low expenses.", "\"Your bank's fund is not an index fund. From your link: To provide a balanced portfolio of primarily Canadian securities that produce income and capital appreciation by investing primarily in Canadia...
What are these fees attached to mutual fund FSEMX?	[ "89297", "155797" ]	[ "Annual-report expense ratios reflect the actual fees charged during a particular fiscal year. Prospectus Expense Ratio (net) shows expenses the fund company anticipates will actually be borne by the fund's shareholders in the upcoming fiscal year less any expense waivers, offsets or reimbursements. Prospectus Gro...
Is there a way to buy raw oil today and sell it in 1 year time?	[ "542051", "459825", "234115" ]	[ "There are many ways of investing either directly or indirectly in oil: all of these options are ways to invest in an expected change in the price of oil at various degrees of directness and risk profiles. Investing in derivative or derivative-like products such as futures and CFDs is very risky and requires a good...
How to know if two ETFs are 'substantially identical' according to wash sale rules?	[ "530631", "209996" ]	[ "\"It sounds like this is an entirely unsettled question, unfortunately. In the examples you provide, I think it is safe to say that none of those are 'substantially identical'; a small overlap or no overlap certainly should not be considered such by a reasonable interpretation of the rule. This article on Kitces ...
Market Making vs Market Taking (Quotes vs Orders)	[ "69197", "186392" ]	[ "Quote driven markets are the predecessors to the modern securities market. Before electronic trading and HFTs specifically, trading was thin and onerous. Today, the average investor can open up a web page, type in a security, and buy at the narrowest spread permitted by regulators with anyone else who wants to ta...
What are the best options for an RESP for my 2 year old kid?	[ "509608" ]	[ "Since your child is 2, he has a long time horizon for investment. Assuming the savings will be used at age 19, that's 17 years. So, I think your best bet is to invest primarily in equities (i.e. stock-based funds) and inside an RESP. Why equities? Historically, equities have outperformed debt and cash over long...
Question about MBS and how it pays	[ "186127", "27425" ]	[ "A security is a class of financial instrument you can trade on the market. A share of stock is a kind of security, for example, as is a bond. In the case of your mortgage, what happens: You take out a loan for $180k. The loan has two components. a. The payment stream (meaning the principal and the interest) fro...
Is it smarter to buy a small amount of an ETF every 2 or 3 months, instead of monthly?	[ "263784", "48678", "254910" ]	[ "I personally invest in 4 different ETFs. I have $1000 to invest every month. To save on transaction costs, I invest that sum in only one ETF each month, the one that is most underweight at the time. For example, I invest in XIC (30%), VTI (30%), VEA (30%), and VWO (10%). One month, I'll buy XIC, next month VTA,...
What cost basis accounting methods are applicable to virtual currencies?	[ "274278" ]	[ "\"The only \"\"authoritative document\"\" issued by the IRS to date relating to Cryptocurrencies is Notice 2014-21. It has this to say as the first Q&A: Q-1: How is virtual currency treated for federal tax purposes? A-1: For federal tax purposes, virtual currency is treated as property. General tax principles ap...
Did I get screwed in taxes on a mutual fund dividend payment?	[ "545491", "379357" ]	[ "\"How is that possible?? The mutual fund doesn't pay taxes and passes along the tax bill to shareholders via distributions would be the short answer. Your basis likely changed as now you have bought more shares. But I gained absolutely nothing from my dividend, so how is it taxable? The fund has either realized ...
How does it work when the same ETF is listed on several stock exchanges?	[ "1577" ]	[ "If I buy VUSA from one exchange, can I sell it in a different exchange, assuming my brokerage account lets me trade in both exchanges? Or is it somehow tied to the exchange I bought it from? This doesn't happen for all securities and between all stock exchanges. So that is dependent on broker and country. I checke...
Exchange rate $ ETF,s	[ "161201" ]	[ "Your assumption that funds sold in GBP trade in GBP is incorrect. In general funds purchase their constituent stocks in the fund currency which may be different to the subscription currency. Where the subscription currency is different from the fund currency subscriptions are converted into the fund currency befor...
Does Warren Buffett really have a lower tax rate than his secretary?	[ "118878" ]	[ "\"The scenario you mention regarding capital gains is pretty much the core of the issue. Here's a run-down from PolitiFact.com that explains it a bit. It's important to focus on it being the tax rate, not the tax amount (which I think you get, but I want to reinforce that for other readers). Basically, most of Bu...
What's the best way to manage all the 401K accounts I've accumulated from my past jobs?	[ "516777", "323934", "221117" ]	[ "I rolled mine over from the company I was at into my own brokerage house. You can't roll them into a Roth IRA, so I needed to setup a traditional IRA. There is paperwork your old jobs can provide you. I had to put in some mailing addresses, some account numbers and turn them in. My broker received it, I chose w...
How does cash ISA & share ISA mix together	[ "318823" ]	[ "\"There are two different types of ISA; the \"\"Cash ISA\"\" for cash savings, and the \"\"Stocks and Shares ISA\"\" for stock market investing. You can transfer funds between these two different types of ISA. If your current cash ISA provider does not provide stocks and shares ISAs, then there may be a fee invo...
Are there any other considerations for bonus sacrifice into Pension (UK)	[ "15121" ]	[ "\"The pension is indeed the clear winner and you haven't missed anything. It's easiest to just compare everything in current numbers as you've done and ignore investment opportunities. Given you expect to pay off your student loan in full, you should consider the repayment as a benefit for you too, so the balance ...
If a mutual fund did really well last year, then statistically speaking, is it likely going to do bad this year?	[ "264237", "170815", "259955" ]	[ "\"This can be answered by looking at the fine print for any prospectus for any stock, bond or mutual fund. It says: \"\"Past performance is not an indicator of future performance.\"\". A mutual fund is a portfolio of common stocks, managed by somebody for a fee. There are many factors that can drive performance of...
Why would a passive investor buy anything other than the market portfolio + risk free assets?	[ "382384" ]	[ "\"Investing is always a matter of balancing risk vs reward, with the two being fairly strongly linked. Risk-free assets generally keep up with inflation, if that; these days advice is that even in retirement you're going to want something with better eturns for at least part of your portfolio. A \"\"whole market\...
Any tips for asset allocation across multiple retirement accounts?	[ "454102", "198572" ]	[ "I have a similar plan and a similar number of accounts. I think seeking a target asset allocation mix across all investment accounts is an excellent idea. I use excel to track where I am and then use it to adjust to get closer (but not exactly) to my target percentages. Until you have some larger balances, it ma...
What is the psychology behind the Dead Cat Bounce Pattern and how can it be traded?	[ "486768" ]	[ "You are correct, a possible Dead Cat Bounce is forming on the stock markets. If it does form it will mean that prices have not reached their bottom, as this pattern is a bearish continuation pattern. For a Dead Cat Bounce to form prices will need to break through support formed by the lows last week. If prices bou...
What's the benefit of opening a Certificate of Deposit (CD) Account?	[ "21468", "481442", "290505", "62051", "592679" ]	[ "\"If you've already got emergency savings sufficient for your needs, I agree that you'd be better served by sending that $500 to your student loan(s). I, personally, house the bulk of my emergency savings in CDs because I'm not planning to touch it and it yields a little better than a vanilla savings account. To a...
What is the difference between shares and ETF?	[ "454224" ]	[ "A mutual fund has several classes of shares that are charged different fees. Some shares are sold through brokers and carry a sales charge (called load) that compensates the broker in lieu of a fee that the broker would charge the client for the service. Vanguard does not have sales charge on its funds and you do...
What happens if a bank loses your safe deposit box?	[ "506826" ]	[ "Unfortunately assets placed in a safety deposit box are not covered under the Federal Deposit Insurance Program (FDIC). Unless the bank is found to be negligent in the way it handled or protected your safety deposit box, neither them nor their private insurance company will reimburse you for the loss. Find out if ...
How is “The People's Trust” not just another Investment Trust?	[ "205280", "500460" ]	[ "\"According to what little information is available currently, this fund is most akin to an actively managed exchange traded fund rather than an investment trust. An investment trust is an actively managed, closed-end fund that is tradeable on the stock market. \"\"Closed-end\"\" means that there are a fixed numb...
What's an Exchange-Traded Fund (ETF)?	[ "357979", "473658" ]	[ "Wikipedia has a fairly detailed explanation of ETFs. http://en.wikipedia.org/wiki/Exchange-traded_fund", "ETFs offer the flexibility of stocks while retaining many of the benefits of mutual funds. Since an ETF is an actual fund, it has the diversification of its potentially many underlying securities. You can f...
Pros/cons for buying gold vs. saving money in an interest-based account?	[ "529715", "463230", "57564", "31004" ]	[ "\"As Michael McGowan says, just because gold has gone up lots recently does not mean it will continue to go up by the same amount. This plot: shows that if your father had bought $20,000 in gold 30 years ago, then 10 years ago he would have slightly less than $20,000 to show for it. Compare that with the bubble i...
Does keeping 'long-term' safety net in bonds make sense?	[ "343693", "304804" ]	[ "\"The answer to your question depends very much on your definition of \"\"long-term\"\". Because let's make something clear: an investment horizon of three to six months is not long term. And you need to consider the length of time from when an \"\"emergency\"\" develops until you will need to tap into the money. ...
Fund equalisation / dividend	[ "1034", "39407" ]	[ "\"What you are describing is a very specific case of the more general principle of how dividend payments work. Broadly speaking, if you own common shares in a corporation, you are a part owner of that corporation; you have the right to a % of all of that corporation's assets. The value in having that right is ulti...
Should I pay more into company pension, or is there a better way to save?	[ "325113", "536374" ]	[ "In the UK you have an allowance of £40,000 per annum for tax relief into a pension. This amount includes both your and your employer's contributions. If you earn more than £150,000 per annum this allowance starts to reduce and if you earn less than the allowance, your allowance is limited to what you earn. You can...
Should I Pay Off my Student Loan Debts First or Invest in an Index Fund?	[ "257016", "451457", "235036" ]	[ "You are on the right track with your math, but be wary of your assumptions. If you can borrow money at x% (and can afford to make payments on the debt), and you can get a return of > x% from investing, then you would make more money by keeping the debt and investing your savings. Another way to think of it: by pay...
$700 guaranteed to not be touched for 15 years+, should I put it anywhere other than a savings account?	[ "585269", "538282", "287764" ]	[ "\"(Since you used the dollar sign without any qualification, I assume you're in the United States and talking about US dollars.) You have a few options here. I won't make a specific recommendation, but will present some options and hopefully useful information. Here's the short story: To buy individual stocks, you...
If Bernie Madoff had invested in Berkshire Hathaway, would the ponzi actually have succeeded?	[ "14997" ]	[ "I could be wrong, but I doubt that Bernie started out with any intention of defrauding anyone, really. I suspect it began the first time he hit a quarter when his returns were lower than everyone else's, or at least not as high as he'd promised his investors they'd be, so he fudged the numbers and lied to get pas...
Forex vs day trading for beginner investor	[ "506078", "555639", "413015" ]	[ "Forex vs Day Trading: These can be one and the same, as most people who trade forex do it as day trading. Forex is the instrument you are trading and day trading is the time frame you are doing it in. If your meaning from your question was comparing trading forex vs stocks, then it depends on a number of things. F...
Is investing in an ETF generally your best option after establishing a Roth IRA?	[ "524612", "188524", "369251" ]	[ "ETFs are a type of investment, not a specific choice. In other words, there are good ETFs and bad. What you see is the general statement that ETFs are preferable to most mutual funds, if only for the fact that they are low cost. An index ETF such as SPY (which reflects the S&P 500 index) has a .09% annual expense,...
What is the process through which a cash stock transaction clears?	[ "293389" ]	[ "\"This is the sad state of US stock markets and Regulation T. Yes, while options have cleared & settled for t+1 (trade +1 day) for years and now actually clear \"\"instantly\"\" on some exchanges, stocks still clear & settle in t+3. There really is no excuse for it. If you are in a margin account, regulations per...
Can a self-employed person have a Health Savings Account?	[ "588399", "42814" ]	[ "\"Whether you can establish an HSA has nothing to do with your employment status or your retirement plan. It has to do with the type of medical insurance you have. The insurance company should be able to tell you if your plan is \"\"HSA compatible\"\". To be HSA compatible, a plan must have a \"\"high deductible\...
Not paying cash for a house	[ "107350", "439420", "269368" ]	[ "The common opinion is an oversimplification at best. The problem with buying a house using cash is that it may leave you cash-poor, forcing you to take out a home equity loan at some point... which may be at a higher rate than the mortgage would have been. On the other hand, knowing that you have no obligation to ...
Should we buy a house, or wait?	[ "108399", "314163", "115408" ]	[ "Some highly pessimistic things worth noting to go alongside all the stability and tax break upside that homes generally provide: Negative equity is no joke and basically the only thing that bankrupts the middle classes consistently en masse. The UK is at the end of a huge housing bull run where rents are extremely...
Small investing for spending money?	[ "59468", "359510", "155493", "4044" ]	[ "First thing to know about investing is that you make money by taking risks. That means the possibility of losing money as well as making it. There are low risk investments that pretty much always pay out but they don't earn much. Making $200 a month on $10,000 is about 26% per year. That's vastly more than you a...
Where can I find a company's earnings history for free?	[ "151221", "524050", "168347" ]	[ "www.earnings.com is helpful thinkorswim's thinkDesktop platform has a lot of earnings information tied with flags on their charts they are free.", "Regulators? SEC, in the US. Its public records for public companies.", "I was going to comment above, but I must have 50 reputation to comment. This is a question ...
Remit money to India from balance transfer of credit card	[ "156721", "247199" ]	[ "Is this transaction legal Yes it is. Are there any tax implications in US? The interest is taxable in US. From what I understand, there are no tax implications in India. Yes this is right. The question you haven't asked is does this makes sense? So you are paying 3% upfront. Getting 8% at end of one year. You can...
Do I need to own all the funds my target-date funds owns to mimic it?	[ "549188", "562305", "158075" ]	[ "\"If you read Joel Greenblatt's The Little Book That Beats the Market, he says: Owning two stocks eliminates 46% of the non market risk of owning just one stock. This risk is reduced by 72% with 4 stocks, by 81% with 8 stocks, by 93% with 16 stocks, by 96% with 32 stocks, and by 99% with 500 stocks. Conclusion...
Extended family investment or pay debt and save	[ "166531", "464405", "472051" ]	[ "I would suggest, both as an investor and as someone who has some experience with a family-run trust (not my own), that this is probably not something you should get involved with, unless the money is money you're not worried about - money that otherwise would turn into trips to the movies or something like that. ...
Couch Potato Portfolio for Europeans?	[ "526422" ]	[ "\"The question is asking for a European equivalent of the so-called \"\"Couch Potato\"\" portfolio. \"\"Couch Potato\"\" portfolio is defined by the two URLs provided in question as, Criteria for fund composition Fixed-income: Regardless of country or supra-national market, the fixed-income fund should have holdin...
In what order should I save?	[ "161230" ]	[ "This is a bit of an open-ended answer as certain assumptions must be covered. Hope it helps though. My concern is that you have 1 year of university left - is there a chance that this money will be needed to fund this year of uni? And might it be needed for the period between uni and starting your first job? If th...
What bonds do I keep and which do I cash, why is the interest so different	[ "590364" ]	[ "Bonds released at the same time have different interest rates because they have different levels of risks and liquidity associated. Risk will depend on the company / country / municipality that offers the bond: their financial position, and their resulting ability to make future payments & avoid default. Riskier ...
Why would I want a diversified portfolio, versus throwing my investments into an index fund?	[ "144261", "508540", "568624" ]	[ "\"Index funds are well-known to give the best long-term investment. Not exactly. Indexes give the best long term performance when compared to actively managing investments directly in the underlying stocks. That is, if you compare an S&P500 index to trying to pick stocks that are part of it, you're more likely to ...
When the market crashes, should I sell bonds and buy equities for the inevitable recovery?	[ "107751", "22941", "405212" ]	[ "When the market moves significantly, you should rebalance your investments to maintain the diversification ratios you have selected. That means if bonds go up and stocks go down, you sell bonds and buy stocks (to some degree), and vice versa. Sell high to buy low, and remember that over the long run most things re...
Is there anything I can do to prepare myself for the tax consequences of selling investments to buy a house?	[ "468047", "431268", "321637" ]	[ "Don't let tax considerations be the main driver. That's generally a bad idea. You should keep tax in mind when making the decision, but don't let it be the main reason for an action. selling the higher priced shares (possibly at a loss even) - I think it's ok to do that, and it doesn't necessarily have to be FIF...
How can I profit on the Chinese Real-Estate Bubble?	[ "265267", "39041" ]	[ "\"Perhaps buying some internationally exchanged stock of China real-estate companies? It's never too late to enter a bubble or profit from a bubble after it bursts. As a native Chinese, my observations suggest that the bubble may exist in a few of the most populated cities of China such as Beijing, Shanghai and Sh...
What is a trust? What are the different types of trusts?	[ "534290", "449081", "31182" ]	[ "Trusts are a way of holding assets with a specific goal in mind. At its simplest, a trust can be used to avoid probate, a sometimes lengthy process in which a will is made public along with the assets bequeathed. A trust allows for fast transfer and no public disclosure. Depending on the current estate tax laws (t...
Basic index fund questions	[ "44617" ]	[ "\"There are no guarantees in the stock market. The index fund can send you a prospectus which shows what their results have been over the past decade or so, or you can find that info on line, but \"\"past results are not a guarantee of future performance\"\". Returns and risk generally trade off against each other...
Is the Yale/Swenson Asset Allocation Too Conservative for a 20 Something?	[ "81304", "248799", "226944", "31954" ]	[ "You can look the Vanguard funds up on their website and view a risk factor provided by Vanguard on a scale of 1 to 5. Short term bond funds tend to get their lowest risk factor, long term bond funds and blended investments go up to about 3, some stock mutual funds are 4 and some are 5. Note that in 2008 Swenson h...
Clarification on 529 fund	[ "466084", "547087" ]	[ "Yes, maybe. The 529 is pretty cool in that you can open an account for yourself, and change the beneficiary as you wish, or not. In theory, one can start a 529 for children or grandchildren yet unborn. Back to you - a 529 is not deductible on your federal return. It grows tax deferred, and tax free if used for a...
How do you save money on clothes and shoes for your family?	[ "378319", "41829", "265877", "77312" ]	[ "\"I feel the same way too! With two kids, I feel like I am spending what it would cost to run a small country just on clothes, shoes, jackets, replacing everything as it is grown out of! A few things I do: I shop in affordable places and check out sales, and look for the cutest things I can find there in a reaso...
Is it wise to switch investment strategy frequently?	[ "356623", "277", "296583" ]	[ "I understand you're trying to ask a narrow question, but you're basically asking whether you should time the market. You can find tons of books saying you shouldn't try it, and tons more confirming that you can. Both will have data and anecdotes to back them up. So I'll give you my own opinion. Market timing, e...
Lump sum annuity distribution — do I owe estate tax?	[ "17633", "156181", "566383" ]	[ "There can be Federal estate tax as well as State estate tax due on an estate, but it is not of direct concern to you. Estate taxes are paid by the estate of the decedent, not by the beneficiaries, and so you do not owe any estate tax. As a matter of fact, most estates in the US do not pay Federal estate tax at al...
How much house can a retired person afford	[ "65835", "519534" ]	[ "\"Consider property taxes (school, municipal, county, etc.) summing to 10% of the property value. So each year, another .02N is removed. Assume the property value rises with inflation. Allow for a 5% after inflation return on a 70/30 stock bond mix for N. After inflation return. Let's assume a 20% rate. An...
Should I overpay to end a fixed-rate mortgage early? [duplicate]	[ "351044", "111580" ]	[ "I would strongly encourage you to either find specifically where in your written contract the handling of early/over payments are defined and post it for us to help you, or that you go and visit a licensed real estate attorney. Even at a ridiculously high price of 850 pounds per hour for a top UK law firm (and I s...
Using property to achieve financial independence	[ "129149", "327737", "542024" ]	[ "I wrote this in another thread but is also applicable here. In general people make some key mistakes with property: Not factoring in depreciation properly. Houses are perpetually falling down, and if you are renting them perpetually being trashed by the tenants as well - particularly in bad areas. Accurate depreci...
Incorporating real-world parameters into simulated(paper) trading	[ "588481", "69696" ]	[ "\"I think you're on the wrong track. Getting more and more samples from the real world does not make your backtest more accurate, it just confirms that your strategy can withstand one particular sample path of a stochastic process. The reason why you find it simple to incorporate fees, commissions, taxes, etc. is...
Is real (physical) money traded during online trading?	[ "374410", "211428", "214969", "83638", "478724", "17906" ]	[ "\"With Forex trading - physical currency is not involved. You're playing with the live exchange rates, and it is not designed for purchasing/selling physical currency. Most Forex trading is based on leveraging, thus you're not only buying money that you're not going to physically receive - you're also paying with ...
Pensions, annuities, and “retirement”	[ "132601", "147730", "522438", "407726" ]	[ "\"There are broadly two kinds of pension: final salary / defined benefit, and money purchase. The text you quote above, where it talks about \"\"pension\"\" it is referring to a final salary / defined benefit scheme. In this type of scheme you earn a salary of £X during your working life, and you are then entitle...
What does it mean to a life insurance policy holder to convert from a stock to mutual insurance company?	[ "131224" ]	[ "\"A stock insurance company is structured like a “normal” company. It has shareholders (that are the company's investors), who elect a board of directors, who select the senior executive(s), who manage the people who run the actual company. The directors (and thus the executives and employees) have a legal respons...
Can capital loss in traditional IRA and Roth IRA be used to offset taxable income?	[ "424427", "150878" ]	[ "Edited in response to JoeTaxpayer's comment and OP Tim's additional question. To add to and clarify a little what littleadv has said, and to answer OP Tim's next question: As far as the IRS is concerned, you have at most one Individual Retirement Account of each type (Traditional, Roth) though the money in each I...
Selling a stock for gain to offset other stock loss	[ "518310" ]	[ "Long term gains are taxed at 15% maximum. Losses, up to the $3K/yr you cited, can offset ordinary income, so 25% or higher, depending on your income. Better to take the loss that way. With my usual disclaimer: Do not let the tax tail wag the investing dog." ]

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