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Upcoming company merger with company I have stock in, help me interpret what is happening | The "par value" is a technicality that you can ignore in this case, and it has nothing directly to do with the merger. When a company issues stock, it puts a "par value" on the shares. If it later issues more shares, they cannot be issued at less than par value. The rest of the notice seems to be as you said: If you hold until the merger takes effect, they are going to give you $25/share and your shares will be gone. As always, you can try to sell on the open market before that time instead, although you can bet that not too many people are going to want to give you more than $25/share at this point. |
How should I prepare for the next financial crisis? | Those ‘crises’ are only an issue if you need your savings during the time of crisis. If you have time to sit it out, you should just do that, and come out of the crisis with a gain. People that lose money during a crisis lose it because they sell their investments during the crisis, either because they had to or because they thought they should. If you look at historic values of investments, the market overall always recovers and goes over the orignal value some time after the crisis. Investing even more right in the crisisis the best way to make a lot of money. |
Free service for automatic email stock alert when target price is met? | You can do it graphically at zignals.com and freestockcharts.com. |
Comparing IRA vs 401K's rate-of-return with dollar cost averaging | The number you are trying to calculate is called the Internal Rate of Return (IRR). Google Spreadsheets (and excel) both have an XIRR function that can do this for you fairly simply. Setup a spreadsheet with 1 column for dates, 1 column for investment. Mark your investments as negative numbers (payment to invest). All investments will be negative. Mark your last row with today's date and today's valuation (positive). All withdrawals will be positive, so you are pretending to withdrawal your entire account for the purpose of calculation. Do not record dividends or other interim returns unless you are actually withdrawing money. The XIRR function will calculate your internal rate of return with irregularly timed investments. Links: Article explaining XIRR function (sample spreadsheet in google docs to modify) |
Over the long term, why invest in bonds? | Bonds provide protections against stock market crashes, diversity and returns as the other posters have said but the primary reason to invest in bonds is to receive relatively guaranteed income. By that I mean you receive regular payments as long as the debtor doesn't go bankrupt and stop paying. Even when this happens, bondholders are the first in line to get paid from the sale of the business's assets. This also makes them less risky. Stocks don't guarantee income and shareholders are last in line to get paid. When a stock goes to zero, you lose everything, where as a bondholder will get some face value redemption to the notes issue price and still keep all the previous income payments. In addition, you can use your bond income to buy more shares of stock and increase your gains there. |
Am I considered in debt if I pay a mortgage? | Yes, a mortgage is debt. It's unique in that you have a house which should be worth far more than the mortgage. After the mortgage crisis, many found their homes under water i.e. worth less than the mortgage. The word debt is a simple noun for money owed, it carries no judgement or negative connotation except when it's used to buy short lived items with money one doesn't have. Aside from my mortgage, I get a monthly credit card bill which I pay in full. That's debt too, only it carried no interest and rewards me with 2% cash back. Many people would avoid this as it's still debt. |
Confused about employee stock options: How do I afford these? | Stock options represent an option to buy a share at a given price. What you have been offered is the option to buy the company share at a given price ($5) starting a given date (your golden handcuffs aka vesting schedule). If the company's value doubles in 1 year and the shares are liquid (i.e. you can sell them) then you've just made $125k of profit. If the company's value has gone to zero in 1 year then you've lost nothing other than your hopes of getting rich. As others have mentioned, the mechanics of exercising the option and selling the shares can typically be accomplished without any cash involved. The broker will do both in a single transaction and use the proceeds of the sale to pay the cost of buying the shares. You should always at least cover the taxable portion of the transaction and typically the broker will withhold that tax anyways. Otherwise you could find yourself in a position where you have actually lost money due to tax being owed while the shares decline in value below that tax. You don't have to worry about that right now. Again as people have mentioned options will typically expire 10 years from vesting or 90 days from leaving your employment with the company. I'm sure there are some variations on the theme. Make sure you ask and all this should be part of some written contract. I'm sure you can ask to see it if you wish. Also typical is that stock option grants have to be approved by the board which is normally a technicality. Some general advice: |
At what point does it become worth it to file an insurance claim? | We learned the hard way on this one. First, our area was hit with what was called an "inland hurricane" where we forced to file a claim as our home received extensive damage. Within the same year, we also incurred an electrical surge which took out our older big screen tv (one of those big monstrosities that sits on the floor). We were granted full replacement with a more modern flat screen TV, TV stand, and DVD player. It seemed like a no brainer. We quickly found it as our premium went up that it wasn't that sweet. It wasn't a huge increase, but it definitely has us truly evaluate if it's really necessary filing a claim. |
Online Personal finance with QIF import | Unfortunately I don't think any of the online personal finance applications will do what you're asking. Most (if not all) online person finance software uses a combination of partnerships with the banks themselves and "screen scraping" to import your data. This simplifies things for the user but is typically limited to whenever the service was activated. Online personal finance software is still relatively young and doesn't offer the depth available in a desktop application (yet). If you are unwilling to part with historical data you spent years accumulating you are better off with a desktop application. Online Personal Finance Software Pros Cons Desktop Personal Finance Software Pros Cons In my humble opinion the personal finance software industry really needs a hybrid approach. A desktop application that is synchronized with a website. Offering the stability and tools of a desktop application with the availability of a web application. |
What to do if a state and federal refund is denied direct deposit? | Publication 17 Your Income Tax top of page 14 If the direct deposit cannot be done, the IRS will send a check instead. When your girlfriend gets the check, she can endorse it over to you for deposit into your account. |
Why do consultants or contractors make more money than employees? | The benefits and taxes thing, in my opinion is the biggie. Most people don't realize that the cost to the company for a full-time employee with benefits can be 2x or even 3x the amount they see in their paycheck. Health plans are extremely expensive. Even if you are having money taken from your check for health insurance, it is often just a fraction of the total cost, and the employer is subsidizing the rest. More expensive benefits that contractors don't typically get are 401K matches and paid vacation days. When contractors call in sick or don't work because it is a national holiday, they don't get paid for that day. Also, see that line on your paycheck deducting for Social security and Medicare? That is only half of the tax. The employer pays an equal amount that is not shown on that statement. Also, they pay taxes that go towards unemployment benefits , and may be required to pay higher taxes if they churn through a lot of full-time employees. You can usually let contractors go with relative impunity . For the unemployment tax reasons, not paying for people's days off or benefits, a lot less paperwork, and less risk to the business associated with committing to full-time employees all provide value to the company. Thus companies are willing to pay more because they are getting more. Think of it like a cell phone-contract. If you commit to a three year contract it can be a pain/expensive to get out of the deal early, but you will probably get a better rate in exchange for the risk being shifted to your end of the deal. |
Which banks have cash-deposit machines in Germany? | HypoVereinsbank (member of UniCredit group), a few savings banks ("Sparkasse") and VR Banks offer cash (bill) deposit machines. However, it can take a few business days until the deposit is credited to your checking account, which has to be with the same bank. Google for "Bargeldeinzahlungsautomat" (=cash deposit machine). As Duffbeer stated correctly, HSBC Trinkaus which is the German arm of the HSBC group does not operate any ATMs in Germany. In addition they do not share the same bank accounts. So I would recommend going with the classic banks mentioned above. |
Total price of (AAPL option strike price + option cost) decreases with strike price. Why? | Think about it this way. If the strike price is $200, and cost of the option is $0.05. $200 + $0.05 is $200.05. That does not mean that the price of buying the option is more. Neither is the option writer going to pay you $70 to buy the contract. When you are buying options, you can only have a limited downside and that is the premium that you pay for it. In case of the $115 contract, your total loss could be a maximum of $19.3. In case of the $130 contract, your total loss could be a maximum of $9.3. This is due to the fact that the chances of AAPL going to hit $130 is less than the chance of AAPL hitting $115. Therefore, option writers offer the lower probability contracts at a lower price. Long story short, you do not pay for the Strike price. You only pay the premium and that premium keeps getting lower with and increase in Strike price(Or decrease if it is a put option). Strike price is just a number that you expect the stock or index to break. I would suggest you to read up a little more on pricing from here |
I have about 20 000 usd. How can invest them to do good in the world? | Shariah compliant investments attempt to achieve your "ethical investing" ideals. Many countries around the world have a long list of shariah compliant investments and lots of journalists will go great lengths to reveal when a company is not really shariah compliant. Standard & Poors (S&P), an American financial services company, hosts a Shariah compliant index too, but on the Toronto Stock Exchange in Canada due to the Islamaphobia rampant in the United States. But of course, international companies are indifferent to any single country's social problems, and in your new pastime as an international speculator you will get the same luxury too and exemption from the political spectrum. S&P/TSX 60 information can be found here: http://web.tmxmoney.com/tmx_indices.php?section=tsx&index=%5ETXSI Business sectors prohibited from the Shariah index include: Gambling, Pornography, Tobacco, amongst others. In the United States, the concept has been renamed "B-Corporation" (a play on the federal term C-Corporation and S-Corporation), and has garnered enough of a movement that several states have created these as entities people can actually register them with the state, but these are not recognized as "B-Corporations" to the federal government. Shariah compliant investments will be easier to find worldwide, due to the popularity of the associated religion. |
Can I get a mortgage from a foreign bank? | Simple answer YES you can, there are loads here are some links : world first , Baydon Hill , IPF Just googling "foreign currency mortgage", "international mortgage", or "overseas mortgage" gets you loads of starting points. I believe its an established and well used process, and they would be "classified" as a "normal" mortgage. The process even has its own wiki page Incidentally I considered doing it myself. I looked into it briefly, but the cost of fee's seemed to outweigh the possible future benefits of lower interest rates and currency fluctuations. |
My friend wants to put my name down for a house he's buying. What risks would I be taking? | Wrong way round. Transitional arrangements are non-binding guidelines that the lenders can observe if they choose to. The borrower - like your friend - doesn't get to choose whether to use them or not. Your friend obviously can't afford the property, so if you do this, all I can say is congratulations on buying your new house, and I hope you got a deal on the mortgage. |
Advice on strategy for when to sell | It's impossibly difficult to time the market. Generally speaking, you should buy low and sell high. Picking 25% as an arbitrary ceiling on your gains seems incorrect to me because sometimes you'll want to hold a stock for longer or sell it sooner, and those decisions should be based on your research (or if you need the money), not an arbitrary number. To answer your questions: If the reasons you still bought a stock in the first place are still valid, then you should hold and/or buy more. If something has changed and you can't find a reason to buy more, then consider selling. Keep in mind you'll pay capital gains taxes on anything you sell that is not in a tax-deferred (e.g. retirement) account. No, it does not make sense to do a wash sale where you sell and buy the same stock. Capital gains taxes are one reason. I'm not sure why you would ever want to do this -- what reasons were you considering? You can always sell just some of the shares. See above (and link) regarding wash sales. Buying more of a stock you already own is called "dollar cost averaging". It's an effective method when the reasons are right. DCA minimizes variance due to buying or selling a large amount of shares at an arbitrary single-day price and instead spreads the cost or sale basis out over time. All that said, there's nothing wrong with locking in a gain by selling all or some shares of a winner. Buy low, sell high! |
Why are credit cards preferred in the US? | Credit card fraud protection (by law), credit card cash back programs (provided by most CC issuers), and debit card fees (commonly imposed by the merchant). The crux is that with CC transactions, a small percentage is remitted to the issuing bank. Since the banks are already making money hand over fist on CC's, they incentivize people to use them. CC security is also lax because the merchant is responsible for fraudulent charges instead of the bank. If the merchant fails to check a signature, they are held liable for all charges if the card holder reports a fraudulent transaction. |
Where can you find historical PEs of US indices? | Internet sites Books Academic |
Brief concept about price movement of a particular stock [duplicate] | The problem with predicting with accuracy what a stock price will do in any given situation is that there are two main factors that affect a stocks price. The first factor is based somewhat in math as it takes into account numbers such as supply and demand, earnings per share, expected earnings, book value, debt ratio and a wide variety of other numbers. You can compile all those numbers into a variety of formulas and come up with a rational estimate of what the stock should sell for. This is all well and good and if the market were entirely rational it would rarely make news because it would be predictable and boring. This is where our second factor throws a wrench in the works. The second factor affecting stock price is emotional. There are many examples of people's emotions affecting stock price but if you would like a good example look up the price fluctuations of Apple (AAPL) after their last couple earnings reports. Numerically their company looks good, their earnings were healthy, their EPS is below average yet their price fell following the report. Why is that? There really isn't a rational reason for it, it is driven by the emotions behind unmet expectations. In a more general sense sometimes price goes down and people get scared and sell causing further decline, sometimes people get excited and see it as opportunity to buy in and the price stabilizes. It is much more difficult to anticipate the reaction the market will have to people's emotional whims which is why predicting stock price with accuracy is near impossible. As a thought along the same line ask yourself this question; if the stock market were entirely rational and price could be predicted with accuracy why is there such a wide range of available strike prices available in the options market? It seems that if stock price could be predicted with anything remotely reassembling accuracy the options market need a much smaller selection of available strike prices. |
In a reverse split, what happens to odd lots? | There are two reasons to do a reverse split. Those partial shares will then be turned into cash and returned to the investors. For large institutional investors such as mutual funds or pension funds it results in only a small amount of cash because the fund has merged all the investors shares together. If the company is trying to meet the minimum price level of the exchange they have little choice. If they don't do the reverse split they will be delisted. If the goal is to reduce the number of investors they are using one of the methods of going private: A publicly held company may deregister its equity securities when they are held by less than 300 shareholders of record or less than 500 shareholders of record, where the company does not have significant assets. Depending on the facts and circumstances, the company may no longer be required to file periodic reports with the SEC once the number of shareholders of record drops below the above thresholds. A number of kinds of transactions can result in a company going private, including: |
How to take advantage of home appreciation | There might just not be anything useful for you to do with that 'value'. As others mentioned, HELOCs have their risks and issues too. There is no risk-less way to take advantage of the value (outside of selling) It is similar to owning a rare stamp that is 'worth a million' - what good does it do you if you don't sell it? nothing. It is just a number on a sheet of paper, or even only on some people's minds. |
When does Ontario's HST come into effect? | It looks like the HST will be in effect in Ontario on July 1st, 2010. As to whether it will replace GST with HST for all services, it looks like some sectors may get special treatment: Ontario may exempt mutual funds from HST (National Post). But it doesn't look final yet. However, I would suggest that most service-based businesses in Ontario need to prepare to start charging 13% HST instead of 5% GST. It will be the law. On the "goods" side of the new harmonized tax, it looks like certain goods will still be exempt from the provincial portion. Here's a quote from the Ontario Budget 2009 News Release: "Books, diapers, children's clothing and footwear, children's car seats and car booster seats, and feminine hygiene products would be exempt from the provincial portion of the single sales tax." Here's some additional information on the introduction of the HST, from the province: General Transitional Rules for Ontario HST. And finally, another interesting article from the Ottawa Business Journal: Preparing For Ontario Sales Tax Harmonization – It's Not Too Early UPDATE: I just received an insert from Canada Revenue Agency included with my quarterly GST statement. Titled "Harmonization of the Sales Tax in Ontario and British Columbia", it contains a section titled "What this means for you" (as in, you the business owner). Here's an excerpt: [...] All Ontario and B.C. registrants would need to update their accounting and point-of-sale systems to accomodate the change in rate and new point-of-sale rebates for the implementation date of July 1, 2010. The harmonization of the sales tax in Ontario and B.C. may affect the filing requirements of registrants outside of these two provinces. Registrants will report their HST according to their current GST filing frequency. As a result of the harmonization, there will be changes to the rebates for housing and public service bodies. More information will be released as it becomes available. Visit the CRA web site often, at www.cra.gc.ca/harmonization, for the most up-to-date information on the harmonization of the sales tax and how it may affect you. [...] Last, I found some very detailed information on the HST here: NOTICE247 - Harmonized Sales Tax for Ontario and British Columbia - Questions and Answers on General Transitional Rules for Personal Property and Services. Chances are anything you want to know is in there. |
Any reason to be cautious of giving personal info to corporate fraud departments? | I can't address the psychology of trust involved in your question, but here are some common sense guidelines for dealing with your issue. Make sure you know who you are talking to. Call the company you need to speak to via a publicly available phone number. An email or something you got in a letter might be from a different source. If you use a website, you should be sure you are on the correct website. Keep careful records. Make good notes of each phone call and keep all emails and letters forever. Note the time, name and/or ID of the person you spoke to and numbers called in addition to keeping notes on what actions should be done. Keep your faxing transmission receipts and shipping tracking numbers too. If you are nervous, ask them why they want the info. The fraud department should be able to explain it to you. For example, they probably want your social because that is how your credit report is identified. If they are going to fix a credit report, they will need a social. It is doubtful they would have a good explanation why they need your mother's maiden name. Ask for secure transmission, or confirm they have it. Postal mail isn't so secure, but I'll go out on a limb and say most fax machines today are not really fax machines, but software that deals in PDFs. At some point you will have to realize you will have to transmit something. No method is perfect, but you can limit your exposure. Help them do their jobs. If you are (understandably) nervous, consider their motivations: corporate profit. BUT that could very well mean not running afoul of the law and (with any luck) treating customers the best way they know to earn business. If you stymy the fraud department, how can they help you? If the ID theft was serious enough, document your issue for future law enforcement so you getting pulled over for speeding doesn't result in you going to jail for whatever crime the other person did. Perhaps the fraud department you are dealing with can assist there. Finally, while you work with fraud departments to clear up your name and account, work on the other end to limit future damage. Freeze your credit. See if you bank or credit card have monitoring. Use CreditKarma.com or a similar if you cannot find a free service. (Please don't ever pay for credit monitoring.) |
When should I walk away from my mortgage? | The worth of a credit score (CS) is variable. If you buy your stuff outright with 100% down then your CS is worthless. If you take a loan to buy stuff then it is worth exactly what you save in interest versus a poor score. But there is also the "access" benefit of CS where loans will no longer be available to you, forcing you to rent. If you consider rent as money down teh tiolet then this could factor in. The formula for CS worth is different for everyone. Bill Gates CS is worth zero to him. Walking away from a mortage is not the same as walking away from a loan. A mortage has collateral. There are 2 objects: the money, and the house. If you walk away the bank gets the house as a fair trade. They keep all money you put against the house to boot! Sometimes the bank PROFITS when you walk away. So in a good market you could consider walking away to be the Moral Michael thing to do. :) |
Is paying off your mortage a #1 personal finance priority? | The answer depends entirely on your mortgage terms - is the interest rate low, how many years left? Questions like this are about Cost of Capital. If your mortgage has a low interest for a lot of years, you have a low cost of capital. By paying it off early, you are dumping that low cost of capital. Use the extra money to start a business, invest in something or even buy another property (rental). Whenever you have a low cost of capital, don't rush to get rid of it. Of course, if there are no other investment/business opportunities available and the extra money is going into a low return savings account, you might as well pay down your debt. Or if you lack the self discipline to use the extra money properly - buying flat screens and meals out - then yeah just pay down your debt. But if you're disciplined with the extra money, use it to get access to more capital and make that new capital work for you. |
What would happen if the Euro currency went bust? | I'd have anything you would need for maybe 3-6 months stored up: food, fuel, toiletries, other incidentals. What might replace the currency after the Euro collapses will be the least of your concerns when it does collapse. |
What are the risks of Dividend-yielding stocks? | No stock is risk-free. Some of the biggest companies in the country, that seemed incredibly stable and secure, have suffered severe downturns or gone out of business. Twenty or thirty years ago Kodak ruled the camera film market. But they didn't react quickly enough when digital cameras came along and today they're a shadow of their former self. Forty years ago IBM owned like 90% of the computer market -- many people used "IBM" as another word for computer. Sears used to dominate the retail department store market. Etc. |
Should I set a stop loss for long term investments? | My broker offers the following types of sell orders: I have a strategy to sell-half of my position once the accrued value has doubled. I take into account market price, dividends, and taxes (Both LTgain and taxes on dividends). Once the market price exceeds the magic trigger price by 10%, I enter a "trailing stop %" order at 10%. Ideally what happens is that the stock keeps going up, and the trailing stop % keeps following it, and that goes on long enough that accrued dividends end up paying for the stock. What happens in reality is that the stock goes up some, goes down some, then the order gets cancelled because the company announces dividends or something dumb like that. THEN I get into trouble trying to figure out how to re-enter the order, maintaining the unrealized gain in the history of the trailing stop order. I screwed up and entered the wrong type of order once and sold stock I didn't want to. Lets look at an example. a number of years ago, I bought some JNJ -- a hundred shares at 62.18. - Accumulated dividends are 2127.75 - My spreadsheet tells me the "double price" is 104.54, and double + 10% is 116.16. - So a while ago, JNJ exceeded 118.23, and I entered a Trailing Stop 10% order to sell 50 shares of JNJ. The activation price was 106.41. - since then, the price has gone up and down... it reached a high of 126.07, setting the activation price at 113.45. - Then, JNJ announced a dividend, and my broker cancelled the trailing stop order. I've re-entered a "Stop market" order at 113.45. I've also entered an alert for $126.07 -- if the alert gets triggered, I'll cancel the Market Stop and enter a new trailing stop. |
Does high frequency trading (HFT) punish long-term investment? | Not really. High frequency traders affect mainly short term investors. If everyone invested long-term and traded infrequently, there would be no high frequency trading. For a long term investor, you by at X, hold for several years, and sell at Y. At worst, high frequency trading may affect "X" and "Y" by a few pennies (and the changes may cancel out). For a long term trader that doesn't amount to a "hill of beans" It is other frequent traders that will feel the loss of those "pennies." |
How do government bond yields work? | Imagine a $1,000 face value bond paying 10% interest semi-annually. That means every 6 months there is $50 being paid. Now, if the price of that bond doubled to $2,000, what is the yield? It is still paying $50 every 6 months but now sports a 5% yield as the price went up a great deal. Similarly, if the price of the bond was cut in half to $500, now it is yielding 20% because it is still paying out the $50 every 6 months. The dollar figure is fixed. What percentage of the price it is can vary and that is why there is the inverse relationship between prices and yields. Note that the length of the bond isn't mentioned here where while usually longer bonds will have higher yields, there can be inverted yield curves as well as calls on some bonds. Also, inflation-indexed and convertible bonds could have different calculations used as principal adjustments or possible conversion to stock can change a perception on the overall return. |
Which type of investments to keep inside RRSP? | Everything else can be held inside or outside your registered account depending on your investment or tax needs |
Are mutual funds safe from defaults? | There is a measure of protection for investors. It is not the level of protection provided by FDIC or NCUA but it does exist: Securities Investor Protection Corporation What SIPC Protects SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash. Most customers of failed brokerage firms when assets are missing from customer accounts are protected. There is no requirement that a customer reside in or be a citizen of the United States. A non-U.S. citizen with an account at a brokerage firm that is a member of SIPC is treated the same as a resident or citizen of the United States with an account at a brokerage firm that is a member of SIPC. SIPC protection is limited. SIPC only protects the custody function of the broker dealer, which means that SIPC works to restore to customers their securities and cash that are in their accounts when the brokerage firm liquidation begins. SIPC does not protect against the decline in value of your securities. SIPC does not protect individuals who are sold worthless stocks and other securities. SIPC does not protect claims against a broker for bad investment advice, or for recommending inappropriate investments. It is important to recognize that SIPC protection is not the same as protection for your cash at a Federal Deposit Insurance Corporation (FDIC) insured banking institution because SIPC does not protect the value of any security. Investments in the stock market are subject to fluctuations in market value. SIPC was not created to protect these risks. That is why SIPC does not bail out investors when the value of their stocks, bonds and other investment falls for any reason. Instead, in a liquidation, SIPC replaces the missing stocks and other securities when it is possible to do so. |
Are there any risks from using mint.com? | Mint.com uses something called OFX (Open Financial Exchange) to get the information in your bank account. If someone accessed your mint account they would not be able to perform any transactions with your bank. All they would be able to do is view the same information you do, which some of it could be personal <- that's up to you. Generally the weakest point in security is with the user. An "attacker" is far more likely to get your account information from you then he is from the site your registered with. Why you're the weakest point: When you enter your account information, your password is never saved exactly how you enter it. It's passed through what is called a "one way function", these functions are easy to compute one way but given the end-result is EXTREMELY difficult to compute in reverse. So in a database if someone looked up your password they would see it something like this "31435008693ce6976f45dedc5532e2c1". When you log in to an account your password is sent through this function and then the result is checked against what is saved in the database, if they match you are granted access. The way an attacker would go about getting your password is by entering values into the function and checking the values against yours, this is known as a brute force attack. For our example (31435008693ce6976f45dedc5532e2c1) it would take someone 5 million years to decry-pt using a basic brute force attack. I used "thisismypassword" as my example password, it's 12 characters long. This is why most sites urge you to create long passwords with a mix of numbers, uppercase, lowercase and symbols. This is a very basic explanation of security and both sides have better tools then the one explained but this gives you an idea of how security works for sites like these. You're far more likely to get a virus or a key logger steal your information. I do use Mint. Edit: From the Mint FAQ: Do you store my bank login information on your servers? Your bank login credentials are stored securely in a separate database using multi-layered hardware and software encryption. We only store the information needed to save you the trouble of updating, syncing or uploading financial information manually. Edit 2: From OFX About Security Open Financial Exchange (OFX) is a unified specification for the electronic exchange of financial data between financial institutions, businesses and consumers via the Internet. This is how mint is able to communicate with even your small local bank. FINAL EDIT: ( This answers everything ) For passwords to Mint itself, we compute a secure hash of the user's chosen password and store only the hash (the hash is also salted - see http://en.wikipedia.org/wiki/Sal... ). Hashing is a one-way function and cannot be reversed. It is not possible to ever see or recover the password itself. When the user tries to login, we compute the hash of the password they are attempting to use and compare it to the hashed value on record. (This is a standard technique which every site should use). For banking credentials, we generally must use reversible encryption for which we have special procedures and secure hardware kept in our secure and guarded datacenter. The decryption keys never leave the hardware device (which is built to destroy the key material if the tamper protection is attacked). This device will only decrypt after it is activated by a quorum of other keys, each of which is stored on a smartcard and also encrypted by a password known to only one person. Furthermore the device requires a time-limited cryptographically-signed permission token for each decryption. The system (which I designed and patented) also has facilities for secure remote auditing of each decryption. Source: David K Michaels, VP Engineering, Mint.com - http://www.quora.com/How-do-mint-com-and-similar-websites-avoid-storing-passwords-in-plain-text |
Brokerage account for charity | If the charity accepts stock, you can avoid the tax on the long term cap gain when you donate it. e.g. I donate $10,000 in value of Apple. I write off $10,000 on my taxes, and benefit with a $2500 refund. If I sold it, I'd have nearly a $1500 tax bill (bought long enough ago, the basis is sub $100). Any trading along the way, and it's on you. Gains long or short are taxed on you. It's only the final donation that matters here. Edit - to address Anthony's comment on other answer - I sell my Apple, with a near $10,000 gain (it's really just $9900) and I am taxed $1500. Now I have $8500 cash I donate and get $2125 back in a tax refund. By donating the stock I am ahead nearly $375, and the charity, $1500. |
Relationship between liquidity and an efficient market | Liquidity is highly correlated to efficiency primarily because if an asset's price is not sampled during the time of a trade, it's price is unknown therefore inefficient. Past prices can be referenced, but they are not the price of the present. Prices of substitutes are even worse. SPY is extremely efficient for an equity. If permitted, it could easily trade with much lower ticks and still have potential for a locked market. Ideal exchange An ideal exchange has no public restrictions on trade. This is not to say that private restrictions would need to be put in place for various reasons, but one would only do that if it were responsible for its own survival instead of being too big to fail. In this market, trades would be approximately continuous for the largest securities and almost always locked because of continuous exchange fee competition with ever dropping minimum ticks. A market that can provide continuous locked orders with infinite precision is perfectly efficient from the point of view of the investor because the value of one's holdings are always known. EMH In terms of the theory the Efficient Market Hypothesis this is irrelevant to the rational investor. The rational investor will invest in the market at large of a given asset class, only increasing risk as wealth increases thus moving to more volatile asset classes when the volatility can be absorbed by excess wealth. Here, liquidity is also helpful, the "two heads are better than one" way of thinking. The more invested in an asset class, the lower the class's variance and vice versa. Bonds, the least variant, dwarf equities which dwarf options, all in order of the least variance. Believe it or not, there was a day when bonds were almost as risky as equities. For those concerned with EMH, liquidity is also believed to increase efficiency in some forms because liquidity is proportional to the number of individuals invested thus reducing the likelihood of an insufficient number of participants. External inefficiency In the case of ETFs that do not perfectly track their underlying index less costs at all times between index changes, this is because they are forbidden from directly trading in the market on their own behalf. If they were allowed and honest, the price would always be perfect and much more liquid than it otherwise should be since the combined frequency of all index members is much higher than any one alone. If one was dishonest, it would try to defraud with higher or lower numbers; however, if insider trading were permitted, both would fail due to the prisoner's dilemma that there is no honor among thieves. Here, the market would detect the problem much sooner because the insiders would arbitrage the false price away. Indirect internal efficiency Taking emerging market ETFs as an example, the markets that those are invested into are heavily restricted, so their ETF to underlying price inefficiencies are more pronounced even though the ETFs are actually working to make those underlying markets more efficient because a price for them altogether is known. |
In Australia, how to battle credit card debt? | JoeTaxpayer mentioned a budget. Staying on top of your spending will be the result of getting out from under this debt. You may have Excel on your PC now, if not Open Office is free which has a program that handles finance applications. There is budgeting software for free out there. Youneedabudget.com is a lot better but cost a little. It keeps me from spending money I don't necessarily have as I can see a result month to month from having outflow of cash. As Joe mentioned - no more lattes in the near future which will help you pay off this debt which will be a bigger relief than a fashion statement. Having used budgeting software and attempted to stay in budget has been useful. I still over spend a little on food and can see the ramifications immediately. In short, try creating and sticking to a budget no matter the urge. As far as insolvency is concerned I'd struggle with paying it down before I do that. The thought passed my mind but I bit the bullet. DO NOT walk away from the debt however. That isn't a good idea Either. Budget and bite. |
Using simple moving average in Equity | One of the most obvious uses of SMAs is the detection of a trend reversal. A trend reversal happens when a short term SMA crosses over a longer term SMA. For example, if a 20 day moving average was, previously, above a 200 day moving average, but has crossed over the 200 day and is currently below the 200 day then the security has performed a 'death cross' and the trend is for lower and lower prices. Stockcharts.com has excellent 'chart school' for the beginning chart user. They also provide excellent charts. Here is a link: http://stockcharts.com/school/doku.php?id=chart_school I like to use a 20 day SMA, a 200 day SMA, and a 21 day EMA. |
Will a credit card issuer cancel an account if it never incurs interest? | I've got a card that I've had for about 25 years now. The only time they charged me interest I showed it was their goof (the automatic payment failed because of their mistake) and they haven't cancelled it. No annual fee, a bit of cash back. The only cards I've ever had an issuer close are ones I didn't use. |
Why would you ever turn down a raise in salary? | I once turned down a raise because I didn't agree with the employee review that supposedly substantiated the raise. I felt the review to be superficial and incomplete. Then I refused to sign it, or take the accompanying raise, due to that fact. |
What is quotational loss in stock market? | https://www.fool.com/investing/general/2013/07/30/2-types-of-risk-2-types-of-bubbles.aspx (mirror): The Wall Street Journal reviews: What Mr. Bernstein calls "shallow risk" is a temporary drop in an asset's market price; decades ago, the great investment analyst Benjamin Graham referred to such an interim decline as "quotational loss." "Deep risk," on the other hand, is an irretrievable real loss of capital, meaning that after inflation you won't recover for decades -- if ever. So quotational loss = loss not explained by change of actual value of a firm. |
Is there any instrument with real-estate-like returns? | nan |
“Occupation” field on IRS Form 1040 | It doesn't generally matter, and I'm not sure if it is in fact in use by the IRS other than for general statistics (like "this year 20% of MFJ returns were with one spouse being a 'homemaker'"). They may be able to try and match the occupation and the general levels and types of income, but for self-employed there's a more precise and reliable field on Schedule C and for employees they don't really need to do this since everything is reported on W2 anyway. So I don't think they even bother or give a lot of value to such a metric. So yes, I'm joining the non-authoritative "doesn't matter" crowd. |
Why would a central bank or country not want their currency to appreciate against other currencies? | It would essentially make goods from other countries more cheaper than goods from US. And it would make imports from these countries to China more expensive. The below illustration is just with 2 major currencies and is more illustrative to show the effect. It does not actually mean the goods from these countries would be cheaper. 1 GBP = 1.60 USD 1 EUR = 1.40 USD 1 CNY = 0.15 USD Lets say the above are the rates for GBP, EUR, CNY. The cost of a particular goods (assume Pencils) in international market is 2 USD. This means for the cost of manufacturing this should be less than GBP 1.25 in UK, less than 1.43 in Euro Countires, less than 13.33 CNY in China. Only then export would make sense. If the real cost of manufacturing is say 1.4 GBP in UK, 1.5 EUR in Euro countires, clearly they cannot compete and would loose. Now lets say the USD has appreciated by 20% against other currencies. The CNY is at same rate. 1 GBP = 1.28 USD 1 EUR = 1.12 USD 1 CNY = 0.15 USD Now at this rate the cost of manufacturing should be less than GBP 1.56 GBP, less than 1.78 EUR in Euro Countires. In effect this is more than the cost of manufacturing. So in effect the goods from other countires have become cheaper/compatative and goods from China have become expensive. Similarly the imports from these countires to China would be more expensive. |
Is it true that 90% of investors lose their money? | The game is not zero sum. When a friend and I chop down a tree, and build a house from it, the house has value, far greater than the value of a standing tree. Our labor has turned into something of value. In theory, a company starts from an idea, and offers either a good or service to create value. There are scams that make it seem like a Vegas casino. There are times a stock will trade for well above what it should. When I buy the S&P index at a fair price for 1000 (through an etf or fund) and years later it's 1400, the gain isn't out of someone else's pocket, else the amount of wealth in the world would be fixed and that's not the case. Over time, investors lag the market return for multiple reasons, trading costs, bad timing, etc. Statements such as "90% lose money" are hyperbole meant to separate you from your money. A self fulfilling prophesy. The question of lagging the market is another story - I have no data to support my observation, but I'd imagine that well over 90% lag the broad market. A detailed explanation is too long for this forum, but simply put, there are trading costs. If I invest in an S&P ETF that costs .1% per year, I'll see a return of say 9.9% over decades if the market return is 10%. Over 40 years, this is 4364% compounded, vs the index 4526% compounded, a difference of less than 4% in final wealth. There are load funds that charge more than this just to buy in (5% anyone?). Lagging by a small fraction is a far cry from 'losing money.' There is an annual report by a company named Dalbar that tracks investor performance. For the 20 year period ending 12/31/10 the S&P returned 9.14% and Dalbar calculates the average investor had an average return of 3.83%. Pretty bad, but not zero. Since you don't cite a particular article or source, there may be more to the story. Day traders are likely to lose. As are a series of other types of traders in other markets, Forex for one. While your question may be interesting, its premise of "many experts say...." without naming even one leaves room for doubt. Note - I've updated the link for the 2015 report. And 4 years later, I see that when searching on that 90% statistic, the articles are about day traders. That actually makes sense to me. |
Is it ok to have multiple life time free credit cards? | Do you need it? It doesn't sound like it - you seem to be able to manage with just the cards you have. Will it hurt anything? Probably not either, unless it entices you to spend more than you make. Another downside might be that you would spend more than you normally would just to have activity on every card. So all in all, I don't see much upside. |
How do I adjust to a new social class? | And specifically regarding prices of housing, what factors drive prices in that regard? I mean, the houses are roughly the same... but almost 3 times as expensive. Rent, like so many things, is tied to supply and demand. On the demand side, rent is tied to income. People tend to buy as much house as they can afford, given that mortgage interest is deductible and public schools, financed through property tax, performs better in valuable neighborhoods. Raise the minimum wage and economists expect rents to go up accordingly. When employers and pensions offer COLA adjustments, it feeds into a price loop. During the past ten years, there was also some "animal spirits" / irrational behavior present; people feared that if they didn't buy now, home prices would outpace their growth in income. So even though it didn't make sense at the time, they bought because it would make even less sense later (if you assume prices only go up). There's also the whole California has nicer weather angle to explain why people move to SF or LA. On the supply side, it's all about housing stock. In your old town, you could find vacant lots or farmland in less than 5 minute's drive from anywhere. There's far less room for growth in say, the SF Bay area or NYC. There's also building codes that restrict the growth in housing stock. I'm told Boulder, CO is one such place. You would think that high prices would discourage people from moving or working there, but between the university and the defense contractors triangle, they seem to have an iron grip on the market. (Have you ever seen a cartoon where a character gets a huge bill at a restaurant, and their eyes shoot out of their eye sockets and they faint? Yeah... that's how I felt looking at some of the places around here...) Remember, restaurants have to cover the same rent problem you do. And they have higher minimum wages, and taxes, etc. Moreover, food has to be imported from miles away to feed the city, likely even from out of state. In California, there's also food regulations that in effect raise the prices. If people are footing those higher bills, I wouldn't be surprised if they're racking up debt in the process, and dodging the collectors calling about their Lexus, or taking out home equity loans to cover their lifestyle. |
New car price was negotiated as a “cash deal”. Will the price change if I finance instead? | So there are a few angles to this. The previous answers are correct in saying that cash is different than financing and, therefore, the dealer can rescind the offer. As for financing, the bank or finance company can give the dealership a "kickback" or charge a "fee" based on the customer's credit score. So everyone saying that the dealers want you to finance....well yes, so long as you have good credit. The dealership will make the most money off of someone with good credit. The bank charges a fee to the dealership for the loan to a customer with bad credit. Use that tactic with good credit...no problem. Use that tactic with bad credit.....problem. |
Why would you elect to apply a refund to next year's tax bill? | If you expect your taxes to be higher next year, it saves you the trouble of sending estimates or changing the withholding levels. But yes, its basically a free loan you're giving to the government. |
Employee stock option plan with undefined vesting? | An option without the vesting period and the price at which one can exercise the option is of not much value. If vesting is determined by board, then at any given point in time they can change the vesting period to say 3, 5, 10 years any number. The other aspect is at what price you are allowed to exercise the option, ie if the stock is of value 10, you may be given an option to buy this at 10, 20 or 100. This has to be stated upfront for you to know the real value. On listing if the value is say 80, then if you have the option to exercise at 10, or 20 you would make money, else at 100 you loose money and hence choose not to exercise the option. However your having stuck around the company for "x" years in anticipation of making money would go waste. Without a vesting period or the price to exercise the option, they are pretty much meaningless and would depend on the goodwill of the founders |
Should I charge my children interest when they borrow money? | If they have borrowed money without paying it back, what makes you think you could get interest paid? The problem that you face first is to make clear to them that a loan is a loan. As long as they can get free money off you, they will keep borrowing. |
Canadian Citizen and Non Resident for tax purposes | However, you might have to pay taxes on capital gains if these stocks were acquired during your prior residency. |
Is the need to issue bonds a telltale sign that the company would have a hard time paying coupons? | One more scenario is when the company already has maturing debt. e.g Company took out a debt of 2 billion in 2010 and is maturing 2016. It has paid back say 500 million but has to pay back the debtors the remaining 1.5 billion. It will again go to the debt markets to fund this 1.5 billion maybe at better terms than the 2010 issue based on market conditions and its business. The debt is to keep the business running or grow it. The people issuing debt will do complete research before issuing the debt. It can always sell stock but that results in dilution and affects shareholders. Debt also affects shareholders but when interest rates are lower, companies tend to go to debt markets. Although sometimes they can just do a secondary and be done with it if the float is low. |
What's the benefit of opening a Certificate of Deposit (CD) Account? | 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 address the comment about liquidity. In addition to my emergency savings I keep plain vanilla savings accounts for miscellaenous sudden expenses. To me "emergency" means lost job, not new water pump for my car; I have other budgeted savings for that but would spend it on a credit card and reimburse myself anyway so liquidity there isn't even that important. The 18 month CDs I use are barely less liquid than vanilla savings and the penalty is just a couple months of the accrued interest. When you compare a possible early distribution penalty against the years of increased yield you're likely to come out ahead after years of never touching your emergency savings, unless you're budgeted such that a car insurance deductible is an emergency expense. Emergency funds should be guaranteed and non-volatile. If I lose my job, 90 days of accrued interest isn't a hindrance to breaking open some of my CDs, and the process isn't so daunting that I'd meaningfully harm my finances. Liquidity in 2017 and liquidity in whatever year a text book was initially written are two totally different animals. My "very illiquid" brokerage account funds are only one transaction and 3 settlement days less liquid than my "very liquid" savings account. There's no call the bank, sell the security, wait for it to clear, my brokerage cuts a check, mail the check, cash the check, etc. I can go from Apple stock on Monday to cash in my hand on like Thursday. On the web portal for the bank that holds my CDs I can instantly transfer the funds from a CD to my checking account there net of a negligible penalty for early distribution. To call CDs illiquid in 2017 is silly. |
Are companies like EquityZen legitimate and useful? | Stuff I wish I had known, based on having done the following: Obtained employment at a startup that grants Incentive Stock Options (ISOs); Early-exercised a portion of my options when fair market value was very close to my strike price to minimize AMT; made a section 83b) election and paid my AMT up front for that tax year. All this (the exercise and the AMT) was done out of pocket. I've never see EquityZen or Equidate mention anything about loans for your exercise. My understanding is they help you sell your shares once you actually own them. Stayed at said startup long enough to have my exercised portion of these ISOs vest and count as long term capital gains; Tried to sell them on both EquityZen and Equidate with no success, due to not meeting their transaction minimums. Initial contact with EquityZen was very friendly and helpful, and I even got a notice about a potential sale, but then they hired an intern to answer emails and I remember his responses being particularly dismissive, as if I was wasting their time by trying to sell such a small amount of stock. So that didn't go anywhere. Equidate was a little more friendly and was open to the option of pooling shares with other employees to make a sale in order to meet their minimum, but that never happened either. My advice, if you're thinking about exercising and you're worried about liquidity on the secondary markets, would be to find out what the minimums would be for your specific company on these platforms before you plunk any cash down. Eventually brought my request for liquidity back to the company who helped connect me with an interested external buyer, and we completed the transaction that way. As for employer approval - there's really no reason or basis that your company wouldn't allow it (if you paid to exercise then the shares are yours to sell, though the company may have a right of first refusal). It's not really in the company's best interest to have their shares be illiquid on the secondary markets, since that sends a bad signal to potential investors and future employees. |
Investing for Dummys | You can't get started investing. There are preliminary steps that must be taken prior to beginning to invest: Only once these things are complete can you think about investing. Doing so before hand will only likely lose money in the long run. Figure these steps will take about 2.5 years. So you are 2.5 years from investing. Read now: The Total Money Makeover. It is full of inspiring stories of people that were able to turn things around financially. This is good because it is easy to get discouraged and believe all kind of toxic beliefs about money: The little guy can't get ahead, I always will have a car payment, Its too late, etc... They are all false. Part of the book's resources are budgeting forms and hints on budgeting. Read later: John Bogle on Investing and Bogle on Mutual Funds One additional Item: About you calling yourself a "dummy". Building personal wealth is less about knowledge and more about behavior. The reason you don't have a positive net worth is because of how you behaved, not knowledge. Even sticking a small amount in a savings account each paycheck and not spending it would have allowed you to have a positive net worth at this point in your life. Only by changing behavior can you start to build wealth, investing is only a small component. |
Which field should I use for getting the income yield of this bond ETF? | What you want is the distribution yield, which is 2.65. You can see the yield on FT as well, which is listed as 2.64. The difference between the 2 values is likely to be due to different dates of updates. http://funds.ft.com/uk/Tearsheet/Summary?s=CORP:LSE:USD |
Does gold's value decrease over time due to the fact that it is being continuously mined? | Like anything else, the price/value of gold is driven by supply and demand. Mining adds about 2% a year to the supply. Then the question is, will the demand in a given year rise by more or less than 2%. ON AVERAGE, the answer is "more." That may not be true in any given year, and was untrue for whole DECADES of the 1980s and 1990s, when the price of gold fell steadily. On the other hand, demand for gold has risen MUCH more than 2% a year in the 2000s, for reasons discussed by others. That is seen in the six-fold rise in price, from about $300 an ounce to $1800 an ounce over the past ten years. |
Why do gas stations charge different amounts in the same local area? | There are many factors. Most gas stations price their gas based on what it will cost them to replace it. So when their supplier raises the price that it charges the station the station typically raises its prices proportionality. The suppliers tend to have their own rates. The business needs to make a profit so the business sets the price where it feels it will make the most money. Some stations buy bargain gas. Many people say they find this gas to be just fine. Personally some stations gas seems to make my cars run much worse. I can say that my mileage can vary by as much as 4 miles to the gallon based on where I get my gas. So I pay more to go to those stations that consistently have provided me good gasoline. However higher prices do not necessarily mean better gas. We have a BP just down the street that seems to have bad gas while one about a half a mile away that I prefer because I have never had a bad tank of gas. Both are priced about the same. Also some localities have special tax zones. These are local taxes levied based on the location. We have 4 different zones here in Peoria IL (150k pop). That does not take into account the smaller cities around us. |
Which forex brokerage should I choose if I want to fund my account with over a million dollars? | Oanda.com is a very respectable broker. They don't offer ridiculous leverage options of 200 to 1 that prove the downfall of people starting out in Forex. When I used them a few years back, they had good customer service and some nice charting tools. |
On claiming mileage and home office deductions | Can she claim deductions for her driving to and from work? Considering most people use their cars mostly to commute to/from work, there must be limits to what you can consider "claimable" and what you can't, otherwise everyone would claim back 80% of their mileage. No, she can't. But if she's driving from one work site to another, that's deductible whether or not either of the work sites is her home office. Can she claim deductions for her home office? There's a specific set of IRS tests you have to meet. If she meets them, she can. If you're self-employed, reasonably need an office, and have a place in your house dedicated to that purpose, you will likely meet all the tests. Can I claim deductions for my home office, even though I have an official work place that is not in my home? It's very hard to do so. The use of your home office has to benefit your employer, not just you. Can we claim deductions for our home internet service? If the business or home office uses them, they should be a deductible home office expense in some percentage. Usually for generic utilities that benefit the whole house, you deduct at the same percentage as the home office is of the entire house. But you can use other fractions if more appropriate. For example, if you have lots of computers in the home office, you can deduct more of the electricity if you can justify the ratio you use. Run through the rules at the IRS web page. |
What traditionally happens to bonds when the stock market crashes? | The short answer is if you own a representative index of global bonds (say AGG) and global stocks (say ACWI) the bonds will generally only suffer minimally in even the medium large market crashes you describe. However, there are some caveats. Not all bonds will tend to react the same way. Bonds that are considered higher-yield (say BBB rated and below) tend to drop significantly in stock market crashes though not as much as stock markets themselves. Emerging market bonds can drop even more as weaker foreign currencies can drop in global crashes as well. Also, if a local market crash is caused by rampant inflation as in the US during the 70s-80s, bonds can crash at the same time as markets. There hasn't been a global crash caused by inflation after countries left the gold standard, but that doesn't mean it can't happen. Still, I don't mean to scare you away from adding bond exposure to a stock portfolio as bonds tend to have low correlations with stocks and significant returns. Just be aware that these correlations can change over time (sometimes quickly) and depend on which stocks/bonds you invest in. |
What happens when the bid and ask are the same? | In simple terms, this is how the shares are traded, however most of the times market orders are placed. Consider below scenario( hypothetical scenario, there are just 2 traders) Buyer is ready to buy 10 shares @ 5$ and seller is ready to sell 10 shares @ 5.10$, both the orders will remain in open state, unless one wish to change his price, this is an example of limit order. Market orders If seller is ready to sell 10 shares @ 5$ and another 10 shares @5.05$, if buyer wants to buy 20 shares @ market price, then the trade will be executed for 10 shares @ 5$ and another 10 shares @ 5.05$ |
Do stock prices really go down by the amount of the dividend? | Here is one study http://rfs.oxfordjournals.org/content/7/4/711.short I quote from the abstract "In a variety of tests, marginal price drop is not significantly different from the dividend amount. Thus, over the last several decades, one-for-one marginal price drop has been an excellent (average) rule of thumb." |
Where is “Cash Credit from Unsettled Activity” coming from? | The Cash Credit from Unsettled Activity occurs because AGG issued a dividend in the past week. Since you purchased the ETF long enough before the record date (June 5, 2013) for that trade to settle, you qualified for a dividend. The dividend distribution was $0.195217/share for each of your six shares, for a total credit of $1.17 = 6 * 0.195217. For any ETF, the company's website should tell you when dividends are issued, usually under a section titled "Distributions" or something similar. If you look in your Fidelity account's History page, it should show an entry of "Dividend Received", which confirms that the cash credit is coming from a dividend distribution. You could look up your holdings and see which one(s) recently issued a dividend; in this case, it was AGG. |
At what percentage drop should you buy to average down | Only average down super blue chips with a long history or better still, ETFs or index type funds. I do it with income producing funds as I'm a retiree. Other people may have much shorter horizins. |
How to estimate federal and state taxes likely to be due on my side income? | Most states that have income tax base their taxes on the income reported on your federal return, with some state-specific adjustments. So answering your last question first: Yes, if it matters for federal, it will matter for state (in most cases). For estimating the tax liability, I would not use the effective rate but rather use the rate for your highest tax bracket and apply that to your estimated hobby income, assuming that you primary job income won't be wildly higher or lower than last year. As @keshlam noted in a comment, this income is coming on top of whatever else you earn, so it will be taxed at your top rate. Finally, I'd check again whether this is really "hobby" income or if it is "self-employment" income. Self-employment income will be subject to self-employment tax, which comes on top of the regular income tax. |
How and Where can I easily pull data for the Dow 30? | The current Dow divisor is in Historical Divisor Changes. The OpenOffice GetQuote function offers fields for current dividend either in dollars or yield. |
What would I miss out on by self insuring my car? | One way to look at insurance is that it replaces an unpredictable expenses with a predictable fees. That is, you pay a set monthly amount ("premium") instead of the sudden costs associated with a collision or other covered event. Insurance works as a business, which means they intend to make a substantial profit for providing that service. They put a lot of effort in to measuring probabilities, and carefully set the premiums to get make a steady profit*. The odds are in their favor. You have to ask yourself: if X happened tomorrow, how would I feel about the financial impact? Also, how much will it cost me to buy insurance to cover X? If you have a lot of savings, plenty of available credit, a bright financial future, and you take the bus to work anyway, then totaling your car may not be a big deal, money wise. Skip the insurance. If you have no savings, plenty of debt, little prospects for that improving, and you depend on your car to get to work just so you can pay what you already owe, then totaling your car would probably be a big problem for you. Stick with insurance. There is a middle ground. You can adjust your deductible. Raise it as high as you can comfortably handle. You cover the small stuff out of pocket, and save the insurance for the big ticket items. *Insurance companies also invest the money they take as premiums, until they pay out a claim. That's not relevant to this discussion, though. |
Is there an advantage to a traditional but non-deductable IRA over a taxable account? [duplicate] | The most common use of non-deductible Traditional IRA contributions these days, as JoeTaxpayer mentioned, is as an intermediate step in a "backdoor Roth IRA contribution" -- contribute to a Traditional IRA and then immediately convert it to a Roth IRA, which, if you had no previous pre-tax money in Traditional or other IRAs, is a tax-free process that achieves the same result as a regular Roth IRA contribution except that there are no income limits. (This is something you should consider since you are unable to directly contribute to a Roth IRA due to income limits.) Also, I want to note that your comparison is only true assuming you are holding tax-efficient assets, ones where you get taxed once at the end when you take it out. If you are holding tax-inefficient assets, like an interest-bearing CD or bond or a stock that regularly produces dividends, in a taxable account you would be taxed many times on that earnings, and that would be much worse than with the non-deductible Traditional IRA, where you would only be taxed once at the end when you take it out. |
What happens to all of the options when they expire? | Options that are not worth exercising just expire. Options that are worth exercising are typically exercised automatically as they expire, resulting in a transfer of stock between the entity that issued the option and the entity that holds it. OCC options automatically exercise when they expire if the value of the option exceeds the transaction cost for the stock transfer (1/4 point to 3/4 point depending). |
How can I transfer and consolidate my 401k's and other options? | Every plan administrator has their own procedures for rollovers. In any case, you would start by browsing their website or calling them seeking information on rollover. You will need to arrange it with both your current and prior administrators. Usually the administrator will send the money directly to your current plan provider, keeping you out of the chain and minimizing any risks of tax complications. It may happen, though, that they have to send the check to you. In that case you will have a limited amount of time to provide it to your current plan. |
What is a “fiat” currency? Are there other types of currency? | There's two types of categories at play that define currency types - but I think the first is more like what you are after. The first is there are essentially three currency types now recognised - see them described here: http://finance.mapsofworld.com/money/types/ The second is currencies can be categorised by the type of economy from which they are generated (reserve/commodity/etc) - see them described here: http://www.forextraders.com/learn-forex-trading-course/major-currency-pairs.html |
Depositing a check with a DBA on the title | Assuming it's your business, endorse the check as yourself and your DBA name, payable to your personal account |
Credit card issued against my express refusal; What action can I take? | As far as the banker himself goes, it's a customer service issue. WF is not going to tell you about their internal discipline (or oughtn't, anyway), other than potentially to confirm that the banker does or does not still work there; that's the closest they should get to telling you about it. I'm a (very) former retail manager, and that's absolutely the most I'd ever do in a case like this; and trust me, even with good customer service reps, you get requests to fire someone a lot, sometimes valid, sometimes not. You did the correct thing from your end: you brought the issue to their attention. Despite the quota, it's (hopefully) not permitted to sign people up without their permission (since that's illegal!), and I can say that in my retail experience, with these promotions with great incentive to cheat in this manner, one of the main things our loss prevention department did was to monitor data to see if people were illicitly signing people up for cards or otherwise cheating the system. That could be a very bad thing from a customer service point of view and from a legal point of view. What you should have done (or possibly did, but it's not clear in your post) is, after you reported the issue, asked for a re-contact on a particular date in the future - not "after you've looked into it", but "Next friday I would like to get a call from you to discuss the resolution." Again, they're not going to tell you the discipline, but they should tell you at least that they've investigated it and will make sure it doesn't happen again, or similar. It's possible they will want more information from you at this point, and this is a useful way to make sure that request doesn't fall off of their plate. They should be able to, at least, tell you if there was a perceived issue on their end - it might be something meaningless to you, like "He thought you said to sign up", or something more descriptive, like "He pushed the button to send you a notice, but our computer system screwed that up and made it an application". You never know these days how easy it is to screw these things up. Now, they certainly should have fixed the issues on your end. Hopefully they did whatever you needed them to do banking-wise, or else you withdrew your money and went somewhere else. If not, follow up with that supervisor's supervisor, or go up a level or two to a regional director or equivalent. They may not be able to cancel the card for you, but the other banking-related things they certainly should fix. The card you probably just have to cancel and be done with. As far as the misuse of personal information, one thing I'd consider doing is placing a freeze on your credit report. Then this could never have happened - you would have to lift it to have your report pulled to be given the card. This is not free, though, so consider this before doing this. |
Is there difference in risk between physical or synthetic replication of an index by an ETF? | First, make sure you understand the objective of an ETF. In some cases, they may use leverage to get a multiple of the index's return that is different than 1. Some may be ultra funds that go for double the return or double the inverse of the return and thus will try to apply the appropriate leverage to achieve that return. Those that use physical replication can still have a small portion be used to try to minimize the tracking error as there is something to be said for what kind of tracking error do you accept as the fund's returns may differ from the index by some measure. Yes. For example, if you were to have a fund that had a 50% and -50% return in back to back periods, what would your final return be? Answer: -25%, which if you need to visualize this, take $1 that then becomes $1.50 by going up 50% and then becomes $.75 by going down 50% in a compounded fashion. This is where you have to be careful of the risks of leverage as those returns will compound in a possibly negative way. |
When to sell stock losers | If you have someplace to put the money which you think will yield significantly better returns, by all means sell and buy that. On the other hand, if you think this stock is likely to recover its value, you might want to hold it, or even buy more as a "contrarian" investment. Buy low, sell high, as much as possible. And diversify. You need to make a judgement call about the odds. We can point out the implications, but in the end whether to sell, buy, hold or hedge is your decision. (This also suggests you need to sit down and draw up a strategy. Agonizing over every decision is not productive. If you have a plan, you make this sort of decision before you ever put money into the stock in the first place.) |
Bank will not accept loose change. Is this legal? | The bank certainly doesn't have to take it for a deposit; that's not a debt. There have been several cases where disgruntled debtors have attempted deliberately annoying ways to pay their debts; the apocryphal example being pennies. Courts are not likely to support such efforts since it's obvious that a) the action is malicious and (relevant to you) b) it's really on you to maintain your money in a wieldy form. If you allow your money to become unwieldy, nobody owes you anything. I wonder about the meta-meaning of that. And whether, in that light it really makes sense to worry about 5% or rolling. As far as getting rid of it, when I bought out a girlfriend's piggybank at par, I just made sure to walk out of the house with $5 in change in my pocket and unload $2-3 at every retailer, none ever objected and some appreciated. Quarters were traded to coin laundry users. When going on transit I brought a bunch, the machines never grumbled. I burned through the cache much faster than expected. |
how can a US citizen buy foreign stocks? | it looks like using an ADR is the way to go here. michelin has an ADR listed OTC as MGDDY. since it is an ADR it is technically a US company that just happens to be a shell company holding only shares of michelin. as such, there should not be any odd tax or currency implications. while it is an OTC stock, it should settle in the US just like any other US OTC. obviously, you are exposing yourself to exchange rate fluctuations, but since michelin derives much of it's income from the US, it should perform similarly to other multinational companies. notes on brokers: most US brokers should be able to sell you OTC stocks using their regular rates (e.g. etrade, tradeking). however, it looks like robinhood.com does not offer this option (yet). in particular, i confirmed directly from tradeking that the 75$ foreign settlement fee does not apply to MGDDY because it is an ADR, and not a (non-ADR) foreign security. |
How much more than my mortgage should I charge for rent? | I think you are trying to figure out what will be a break-even rental rate for you, so that then you can decide whether renting at current market rates is worth it for you. This is tricky to determine because future valuations are uncertain. You can make rough estimates though. The most uncertain component is likely to be capital appreciation or depreciation (increase or decrease in the value of your property). This is usually a relatively large number (significant to the calculation). The value is uncertain because it depends on predictions of the housing market. Future interest rates or economic conditions will likely play a major role in dictating the future value of your home. Obviously there are numerous other costs to consider such as maintenance, tax and insurance some of which may be via escrow and included in your mortgage payment. Largest uncertainty in terms of income are the level of rent and occupancy rate. The former is reasonably predictable, the latter less so. Would advise you make a spreadsheet and list them all out with margins of error to get some idea. The absolute amount you are paying on the mortgage is a red herring similar to when car dealers ask you what payment you can afford. That's not what's relevant. What's relevant is the Net Present Value of ALL the payments in relation to what you are getting in return. Note that one issue with assessing your cost of capital is, what's your opportunity cost. ie. if you didn't have the money tied up in real estate, what could you be earning with it elsewhere? This is not really part of the cost of capital, but it's something to consider. Also note that the total monthly payment for the mortgage is not useful to your calculations because a significant chunk of the payment will likely be to pay down principal and as such represents no real cost to you (its really just a transfer - reducing your bank balance but increasing your equity in the home). The interest portion is a real cost to you. |
Is it a good idea to teach children that work is linearly related to income? | As a parent I think you absolutely have to teach them that income is related to work because (for most people at least) it's a more fundamental principle than budgeting, investments, interest, etc. Once they've learned that the primary source of income is work, then you can start teaching them what to do with it, i.e. how to budget, economise, save, invest, etc. |
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: |
Credit report - Not able to establish identity | The suggestion may be very delayed, have you personally gone to the Experian Office with all the documentation (in xerox copy and in original)? If not, please do so, there is always a difference between dealing with govt/semi-govt institutions over electronic channels and in person. |
Will the stock market continue to grow forever? | The answer to your question depends on what you mean when you say "growth". If you mean a literal increase in the aggregate market capitalization of companies, across the entire market, then, no, this sort of growth is not possible without concomitant economic growth. The reason why is that the market capitalization of each company is proportional to its gross revenue, and the sum of all revenue from selling "final goods" (i.e., things purchased and used by consumers) is, apart from a few technicalities, the definition of GDP. The exact multiplier might fluctuate up or down depending on investors' expectations about how sales will grow or decline going forward, but in a zero-growth economy this multiplier should be stable over the long run. It might, however, still fluctuate over the short term, but more about that in a minute. Note that all of this applies to aggregate growth across all firms. Individual firms can still grow, of course, but as they must do this by gaining market share from other companies such growth would be balanced by a decline for some other firm. Also, I've assumed zero net exports (that's one of the "technicalities" I mentioned above) because obviously you could have export-driven growth even if the domestic economy were stationary. However, often when people talk about "growth" in the market, what they really mean is "return". That is, how much does your investment earn for you. This isn't really the same thing as growth, but people often think of it that way, particularly in the saving phase of their investing career, when they are reinvesting their returns, and therefore their account balances are growing. It is possible to have a positive return, averaged across the market, even in a stationary economy. The reason why is that there are really only two things a firm can do with its net profits. One possibility is that it could invest it in growing the business. However, there is not much point in doing that in a stationary economy because by assumption no increase in aggregate consumption (and therefore, in the long run, aggregate production) are possible. Therefore, firms are left with only the second option, which is to pay them out to investors as dividends. Those dividends provide a return that is independent of economic growth. Would the stock market still be a good investment in such an economy? Yes. Well, sort of. The rate of return from firms' dividend payouts will depend on investors' demand (in aggregate) for returns on their investments. Stock prices will rise or fall, causing returns to respectively fall or rise, to find that level. If your personal desire for returns is lower than the average across the investing public, then the stock market would look like a good investment. If your desired return is higher than the average, then it will look like a poor investment. The marginal investor will, of course be indifferent. The practical upshot of this is that the people who invest in the stock market in this scenario will be precisely the ones for whom the stock market is a good investment, given their personal propensity to save and desire for returns, and so forth. Finally, you mentioned that in your scenario the GDP stagnation is due to declining population. I am less certain what this means for investment, but my first thought is that you would have a large retired population selling its investments to fund late-life consumption, and you would have a comparatively small (relative to history) working population buying those assets. This would lead to low asset prices, and therefore high rates of return. However, that's assuming that retirees need to sell assets to fund their retirement consumption. If the absolute returns on retirees' assets are large enough to fund their retirement consumption then you would wind up with relatively few sellers, resulting in high prices and therefore relatively low rates of return. It's not obvious to me which effect would dominate, and so it's hard to say whether or not the resulting returns would look attractive to the working-age population. |
Market Making vs Market Taking (Quotes vs Orders) | This is too lengthy for a comment. The following quoted passages are excerpted from this Money SE post. Before electronic trading and HFTs specifically, trading was thin and onerous. No. The NYSE and AMEX were deep, liquid and transparent for nearly 75 years prior to high frequency trading (HFT), in 2000 or so. The same is true for NASDAQ, but not for as many years, as NASDAQ is newer, being an electronic market. The point is that it existed, and thrived, prior to HFT. The NASDAQ can be active and functional, WITH or WITHOUT high frequency trading. This is not historically true, nor is it true now: Without a bid or ask at any given time, there could be no trade... Market makers, also known as specialists, were responsible for hitting the bid and taking the offer on whatever security they covered. They had a responsibility assigned to them by the exchange. Yes, it was lucrative! There was risk, and they were rewarded for bearing it. There is a trade-off though. Specialists provided greater stability on a systemic level, although other market participants paid for that cost. Prior to HFT, traders who were not market makers were often bounded by, boxed in, by the toll paid to market makers. Market makers had different, much higher capital and solvency requirements than other traders. Most specialists/market makers had seats, or shared a seat on the NYSE or AMEX. Remember that market makers/specialists are specific to stock markets, whereas HFT is not. If this is true, then we are in trouble: HFTs have supplanted the traditional market maker Why? Because trading volume is LOWER now than it was in the 1990's! EDIT In the comments, I noticed that OP was asking about the difference between I suggest reading this very accurate, well-written answer to a related question, The spread goes to the market maker, is the market maker the exchange? That explains the difference between |
Why are daily rebalanced inverse/leveraged ETFs bad for long term investing? | Fund rebalancing typically refers to changing the investment mix to stay within the guidelines of the mutual fund objective. For example, lets say a fund is supposed to have at least 20% in bonds. Because of a dramatic increase in stock price and decrease in bond values it finds itself with only 19.9% in bonds at the end of the trading day. The fund manager would sell sufficient equities to reduce its equity holdings and buy more bonds. Rebalancing is not always preferential because it could cause capital gain distribution, typically once per year, without selling the fund. And really any trading within the fun could do the same. In the case you cite the verbiage is confusing. Often times I wonder if the author knows less then the reader. It might also be a bit of a rush to get the article out, and the author did not write correctly. I agree that the ETFs cited are suitable for short term traders. However, that is because, traditionaly, the market has increased in value over the long term. If you bet it will go down over the long term, you are almost certain to lose money. Like you, I cannot figure out how rebalancing makes this suitable only for short term traders. If the ETFs distribute capital gains events much more frequently then once per year, that is worth mentioning, but does not provide a case for short versus long term traders. Secondly, I don't think these funds are doing true rebalancing. They might change investments daily for the most likely profitable outcome, but that really isn't rebalancing. It seems the author is confused. |
Offer Price for my stock not shown on quote and a subsequent sale higher than my offer | Many exchanges trade the same securities. An order may be posted to a secondary exchange, but if the National Best Bid and Offer data provider malfunctions, only those with data feeds from that exchange will see it. Only the data provider for the primary exchange where a stock is listed provides the NBBO. Missing orders are very common with the NBBO data providers. NASDAQ's order consolidator has had many failures over the past few years, and the data provider's top executive has recently resigned. Brokers have no control over this system. A broker may be alerted to a malfunction by an accountholder, but a broker may only inform the relevant exchange and the relevant data provider. |
Am I doing the math for this covered call/long put strategy correctly? What risks do I run with this strategy? | FYI: GM has an earnings announcement on April 24th. I think you were trying to create a safe trade by profiting if GM's price fell within a probable range. The chart of the Iron Condor captures just about a standard deviation of movement. So as long as GM is between 31.28 - 37.22 in 34 days you keep the max profit of $110. Note this trade is a net credit, when placing it you get $110 less fees. Also by selling the deep in the money call I take it you were trying to make the most of your capital. The chart below shows a standard covered call compared to short put vertical. Note the short put vertical simulates the covered call position and it is a net credit trade as well. When you drop the order you get $111 less fees. |
How can I find out what factors are making a stock's price rise? | A few days ago they launched Fannie Mae Guaranteed Multifamily Structures (link) but who knows? It's a penny stock now. Google Finance is pretty good at marking news right on the chart for a particular stock. That's how I tracked that piece of news down. Can't say that it precipitated a lot of people buying the stock, but Google Finance isn't a bad place to start looking. |
What are the advantages of a Swiss bank account? | For an American it nearly impossible to open a Swiss bank account. Even a Swiss person want to open a bank account, we have to fill out a document, which asks us if we have a greencard or other relationships with the united states. Some Swiss banks have transferred the money of Americans to Singapore to protect their clients. So you see, the Swiss banks do very much for their clients. And yes, we don't ask very much about money ;) And we are a politically neutral country, but we like the United States more than Russia and of course we have enemies, like the ISIS |
UK Resident exploring freelance work for a Swiss Company | If the firm treats you as an employee then they are treated as having a place of business in the UK and therefore are obliged to operate PAYE on your behalf - this rule has applied to EU States since 2010 and the non-EU EEA members, including Switzerland, since 2012. If you are not an employee then your main options are: An umbrella company would basically bill the client on your behalf and pay you net of taxes and NI. You potentially take home a bit less than you would being 100% independent but it's a lot less hassle and potentially makes sense for a small contract. |
Foolish to place orders before the market opens? | More on a technical note, but the spread on an ETF tends to be worst at market open and near market close. (assuming the ETF constituents are traded on a synchronous basis.) If possible, it's often best to let market makers get up and running before allowing your order to flow into market. |
Is it worth trying to find a better minimum down payment for a first time home buyer? | It's worthwhile to try and find a better minimum down-payment. When I bought my home, I got an FHA loan, which drastically reduced the minimum down-payment required (I think the minimum is 3% under FHA). Be aware that any down-payment percentage under 20% means that you'll have to pay for private mortgage insurance (PMI) as part of your monthly mortgage. Here's a good definition of it. Part of the challenge you're experiencing may be that banks are only now exercising the due diligence with borrowers for mortgages that they should have been all along. I hope you're successful in finding the right payment. Getting a mortgage to reduce your spending on housing relative to rent is a wise move. In addition to fixing your monthly costs at a consistent level (unlike rent, which can rise for reasons you don't control), the mortgage interest deduction makes for a rather helpful tax benefit. |
Effective interest rate for mortgage loan | With the $2000 downpayment and interest rate of 11.5% nominal compounded monthly the monthly payments would be $970.49 As you state, that is a monthly rate of 0.9583% Edit With the new information, taking the standard loan equation where Let Now setting s = 98000, with d = 990.291 solve for r |
Class of shares specifically for retirement accounts with contribution limits | The fair price of a stock is the present value of its future payments. That means the stock you have described would have a "fair" value that is quite high and you wouldn't be able to put much of it in your 401(k) or IRA. The IRS requires that "fair value" be used for calculating the value of IRA and 401(k) assets. Of course, if the stock is not publicly traded, then there's not an obvious price for it. I'm sure in the past people have said they spent a small amount of money for assets that are actually worth much more in order to get around IRS limits. This is illegal. The IRS can and sometimes will prosecute people for this. In order to address abuses of the system by inclusion of hard to value assets in retirement accounts, the IRS has additional reporting requirements for these assets (nonpublic stock, partnerships, real estate, unusual options, etc.) and those reporting requirements became more stringent in 2015. In other words, they are trying to clamp down on it. There are also likely problems with prohibitions against "self-dealing" involved here, depending on the specifics of the situation you are describing. |
What's the best way to manage all the 401K accounts I've accumulated from my past jobs? | 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 what I wanted to invest it in and that was that. No tax penalty or early withdrawal penalty. The key to avoiding penalties is to have your past employers send the money directly to another retirement fund, not send a check to you. |
How do I deduct payments to others out of a single payment to the group for contract work? | You send the proper form to the other person for the amount you gave him, and file it as your business expense on your Schedule C. |
Which U.S. online discount broker is the best value for money? | I've never used them myself, but Scottrade might be something for you to look at. They do $7 internet trades, but also offer $27 broker assisted trades (that's for stocks, in both cases). Plus, they have brick-and-morter storefronts all over the US for that extra "I gotta have a human touch". :-) Also, they do have after hours trading, for the same commission as regular trading. |
Is there a difference between buying few shares of an expensive stock vs many shares of an inexpensive one? | Before the prevalence of electronic trading, trading stocks was very costly, dropping from ~15c in the late 1970s to less than a nickel per share today. Exchange fees for liquidity takers are ~0.3c per share, currently. When orders were negotiated exclusively by humans, stocks used to be quoted in fractions rather than decimal, such as $50 1/2 instead of something more precise like $50.02. That necessary ease of negotiation for humans to rapidly trade extended to trade size as well. Traders preferred to handle orders in "round lots", 100 shares, for ease of calculation of the total cost of the trade, so 100 shares at $50 1/2 would have a total cost of $5,050. The time for a human to calculate an "odd lot" of 72 shares at $50.02 would take much longer so would cost more per share, and these costs were passed on to the client. These issues have been negated by electronic trading and simply no longer exist except for obsolete brokerages. There are cost advantages for extremely large trades, well above 100 shares per trade. Brokerage fees today run the gamut: they can be as insignificant as what Interactive Brokers charges to as high as a full service broker that could charge hundreds of USD for a few thousand USD trade. With full service brokerages, the charges are frequently mystifying and quoted at the time a trade is requested. With discount brokerages, there is usually a fee per trade and a fee per share or contract. Interactive Brokers will charge a fee per share or option only and will even refund parts of the liquidity rebates exchanges provide, as close as possible to having a seat on an exchange. Even if a trader does not meet Interactive Brokers' minimum trading requirement, the monthly fee is so low that it is possible that a buy and hold investor could benefit from the de minimis trade fees. It should be noted that liquidity providing hidden orders are typically not rebated but are at least discounted. The core costs of all trades are the exchange fees which are per share or contract. Over the long run, costs charged by brokers will be in excess of charges by exchanges, and Interactive Brokers' fee schedule shows that it can be reduced to a simple markup over exchange fees. Exchanges sometimes have a fee schedule with lower charges for larger trades, but these are out of reach of the average individual. |
What should I do about proxy statements? | You own a fractional share of the company, maybe you should care enough to at least read the proxy statements which explain the pro and con position for each of the issues you are voting on. That doesn't seem like too much to ask. On the other hand, if you are saying that the people who get paid to be knowledgeable about that stuff should just go make the decisions without troubling you with the details, then choose the option to go with their recommendations, which are always clearly indicated on the voting form. However, if you do this, it might make sense to at least do some investigation of who you are voting onto that board. I guess, as mpenrow said, you could just abstain, but I'm not sure how that is any different than just trashing the form. As for the idea that proxy votes are tainted somehow, the one missing piece of that conspiracy is what those people have to gain. Are you implying that your broker who has an interest in you making money off your investments and liking them would fraudulently cast proxy votes for you in a way that would harm the company and your return? Why exactly would they do this? I find your stance on the whole thing a bit confusing though. You seem to have some strong opinions on corporate Governance, but at the same time aren't willing to invest any effort in the one place you have any control over the situation. I'm just sayin.... Update Per the following information from the SEC Website, it looks like the meaning of a proxy vote can vary depending on the mechanics of the specific issue you are voting on. My emphasis added. What do "for," "against," "abstain"and "withhold" mean on the proxy card or voter instruction form? Depending on what you are voting on, the proxy card or voting instruction form gives you a choice of voting "for," "against," or "abstain," or "for" or "withhold." Here is an explanation of the differences: Election of directors: Generally, company bylaws or other corporate documents establish how directors are elected. There are two main types of ways to elect directors: plurality vote and majority vote. A "plurality vote" means that the winning candidate only needs to get more votes than a competing candidate. If a director runs unopposed, he or she only needs one vote to be elected, so an "against" vote is meaningless. Because of this, shareholders have the option to express dissatisfaction with a candidate by indicating that they wish to "withhold" authority to vote their shares in favor of the candidate. A substantial number of "withhold" votes will not prevent a candidate from getting elected, but it can sometimes influence future decisions by the board of directors concerning director nominees. A "majority vote" means that directors are elected only if they receive a majority of the shares voting or present at the meeting. In this case, you have the choice of voting "for" each nominee, "against" each nominee, or you can "abstain" from voting your shares. An "abstain" vote may or may not affect a director's election. Each company must disclose how "abstain" or "withhold" votes affect an election in its proxy statement. This information is often found toward the beginning of the proxy statement under a heading such as "Votes Required to Adopt a Proposal" or "How Your Votes Are Counted." Proposals other than an election of directors: Matters other than voting on the election of directors, like voting on shareholder proposals, are typically approved by a vote of a majority of the shares voting or present at the meeting. In this situation, you are usually given the choice to vote your shares "for" or "against" a proposal, or to "abstain" from voting on it. Again, the effect of an "abstain" vote may depend on the specific voting rule that applies. The company's proxy statement should again disclose the effect of an abstain vote. |
Subsets and Splits