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[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "if accepting more than $10k in cash for a used boat, should i worry about counterfeiting?", "role": "user" }, { "content": "i'd be a bit concerned about someone who wanted to transact that large of a transaction in cash. also consider what you are going to do with the funds, if you deposit it, you will need to tell the bank where it comes from. why does the bank want to know, because most legal businesses don't transact business with large sums of currency.. what does that tell you about the likelihood the person you are about to do business with is a criminal or involved in criminal affairs? the lower bill of sale price might be more than just to dodge taxes, it could be part of money laundering.. if they can turn right around and 'sell' the boat for $10k, or trade it in on a bigger boat for the same amount, and have a bill than says $4k, then they have just come up with a legal explanation for how they made 6 grand. and you could potentially be considered an accomplice if someone is checking up on their finances. really, is it worth the risk.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "where should i invest my savings?", "role": "user" }, { "content": "basically the first thing you should do before you invest your money is to learn about investing and learn about what you want to invest in. another thing to think about is that usually low risk can also mean low returns. as you are quite young and have some savings put aside you should generally aim for higher risk higher return investments and then when you start to reach retirement age aim for less risky lower return investments. in saying that, just because an investment is considered high risk does not mean you have to be exposed to the full risk of that investment. you do this by managing your risk to an acceptable level which will allow you to sleep at night. to do this you need to learn about what you are investing in. as an example about managing your risk in an investment, say you want to invest $50,000 in shares. if you put the full $50,000 into one share and that share price drops dramatically you will lose a large portion of your money straight away. if instead you spent a maximum of $10,000 on 5 different shares, even if one of them falls dramatically, you still have another 4 which may be doing a lot better thus minimising your losses. to take it one step further you might say if anyone of the shares you bought falls by 20% then you will sell those shares and limit your losses to $2000 per share. if the worst case scenario occurred and all 5 of your shares fell during a stock market crash you would limit your total losses to $10,000 instead of $50,000. most successful investors put just as much if not more emphasis on managing the risk on their investments and limiting their losses as they do in selecting the investments. as i am not in the us, i cannot really comment whether it is the right time to buy property over there, especially as the market conditions would be different in different states and in different areas of each state. however, a good indication of when to buy properties is when prices have dropped and are starting to stabilise. as you are renting at the moment one option you might want to look at is buying a place to live in so you don't need to rent any more. you can compare your current rent payment with the mortgage payment if you were to buy a house to live in. if your mortgage payments are lower than your rent payments then this could be a good option. but whatever you do make sure you learn about it first. make sure you spend the time looking at for sale properties for a few months in the area you want to buy before you do buy. this will give you an indication of how much properties in that area are really worth and if prices are stable, still falling or starting to go up. good luck, and remember, research, research and more research. even if you are to take someone elses advice and recommendations, you should learn enough yourself to be able to tell if their advice and recommendations make sense and are right for your current situation.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is my mortgage more likely to be sold if i pre-pay principal?", "role": "user" }, { "content": "there are two ways that mortgages are sold: the loan is collateralized and sold to investors. this allows the bank to free up money for more loans. of course sometime the loan may be treated like in the game of hot potato nobody want s to be holding a shaky loan when it goes into default. the second way that a loan is sold is through the servicing of the loan. this is the company or bank that collects your monthly payments, and handles the disbursement of escrow funds. some banks lenders never sell servicing, others never do the servicing themselves. once the servicing is sold the first time there is no telling how many times it will be sold. the servicing of the loan is separate from the collateralization of the loan. when you applied for the loan you should have been given a servicing disclosure statement servicing disclosure statement. respa requires the lender or mortgage broker to tell you in writing, when you apply for a loan or within the next three business days, whether it expects that someone else will be servicing your loan (collecting your payments). the language is set by the us government: [we may assign, sell, or transfer the servicing of your loan while the loan is outstanding.] [or] [we do not service mortgage loans of the type for which you applied. we intend to assign, sell, or transfer the servicing of your mortgage loan before the first payment is due.] [or] [the loan for which you have applied will be serviced at this financial institution and we do not intend to sell, transfer, or assign the servicing of the loan.] [instructions to preparer: insert the date and select the appropriate language under \"servicing transfer information.\" the model format may be annotated with further information that clarifies or enhances the model language.]", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "purchasing options between the bid and ask prices, or even at the bid price or below?", "role": "user" }, { "content": "this sometimes happens to me. it depends on how liquid the option is. normally what i see happening is that the order book mutates itself around my order. i interpret this to mean that the order book is primarily market makers. they see a retail investor (me) come in and, since they don't have any interest in this illiquid option, they back off. some other retail investor (or whatever) steps in with a market order, and we get matched up. i get a fill because i become the market maker for a brief while. on highly liquid options, buy limits at the bid tend to get swallowed because the market makers are working the spread. with very small orders (a contract or two) on very liquid options, i've had luck getting quick fills in the middle of the spread, which i attribute to mm's rebalancing their holdings on the cheap, although sometimes i like to think there's some other anal-retentive like me out there that hates to see such a lopsided book. :) i haven't noticed any particular tendency for this to happen more with puts or calls, or with buy vs sell transactions. for a while i had a suspicion that this was happening with strikes where iv didn't match iv of other strikes, but i never cared enough to chase it down as it was a minor part of my overall p/l.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how to evaluate stocks? e.g. whether some stock is cheap or expensive?", "role": "user" }, { "content": "if you are looking for numerical metrics i think the following are popular: price/earnings (p/e) - you mentioned this very popular one in your question. there are different p/e ratios - forward (essentially an estimate of future earnings by management), trailing, etc.. i think of the p/e as a quick way to grade a company's income statement (i.e: how much does the stock cost verusus the amount of earnings being generated on a per share basis?). some caution must be taken when looking at the p/e ratio. earnings can be \"massaged\" by the company. revenue can be moved between quarters, assets can be depreciated at different rates, residual value of assets can be adjusted, etc.. knowing this, the p/e ratio alone doesn't help me determine whether or not a stock is cheap. in general, i think an affordable stock is one whose p/e is under 15. price/book - i look at the price/book as a quick way to grade a company's balance sheet. the book value of a company is the amount of cash that would be left if everything the company owned was sold and all debts paid (i.e. the company's net worth). the cash is then divided amoung the outstanding shares and the price/book can be computed. if a company had a price/book under 1.0 then theoretically you could purchase the stock, the company could be liquidated, and you would end up with more money then what you paid for the stock. this ratio attempts to answer: \"how much does the stock cost based on the net worth of the company?\" again, this ratio can be \"massaged\" by the company. asset values have to be estimated based on current market values (think about trying to determine how much a company's building is worth) unless, of course, mark-to-market is suspended. this involves some estimating. again, i don't use this value alone in determing whether or not a stock is cheap. i consider a price/book value under 10 a good number. cash - i look at growth in the cash balance of a company as a way to grade a company's cash flow statement. is the cash account growing or not? as they say, \"cash is king\". this is one measurement that can not be \"massaged\" which is why i like it. the p/e and price/book can be \"tuned\" but in the end the company cannot hide a shrinking cash balance. return ratios - return on equity is a measure of the amount of earnings being generated for a given amount of equity (roe = earnings/(assets - liabilities)). this attempts to measure how effective the company is at generating earnings with a given amount of equity. there is also return on assets which measures earnings returns based on the company's assets. i tend to think an roe over 15% is a good number. these measurements rely on a company accurately reporting its financial condition. remember, in the us companies are allowed to falsify accounting reports if approved by the government so be careful. there are others who simply don't follow the rules and report whatever numbers they like without penalty. there are many others. these are just a few of the more popular ones. there are many other considerations to take into account as other posters have pointed out.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why does the share price tend to fall if a company's profits decrease, yet remain positive?", "role": "user" }, { "content": "let's use an example: you buy 10 machines for 100k, and those machines produce products sold for a total of 10k/year in profit (ignoring labor/electricity/sales costs etc). if the typical investor requires a rate of return of 10% on this business, your company would be worth 100k. in investing terms, you would have a pe ratio of 10. the immediately-required return will be lower if substantially greater returns are expected in the future (expected growth), and the immediately required return will be higher if your business is expected to shrink. if at the end of the year you take your 10k and purchase another machine, your valuation will rise to 110k, because you can now produce 11k in earnings per year. if your business has issued 10,000 shares, your share price will rise from $10 to $11. note that you did not just put cash in the bank, and that you now have a higher share price. at the end of year 2, with 11 machines, lets imagine that customer demand has fallen and you are forced to cut prices. you somehow produce only 10k in profit, instead of the anticipated 11k. investors believe this 10k in annual profit will continue into the forseable future. the investor who requires 10% return would then only value your company at 100k, and your share price would fall back from $11 to $10. if your earnings had fallen even further to 9k, they might value you at 90k (9k/0.1=$90k). you still have the same machines, but the market has changed in a way that make those machines less valuable. if you've gone from earning 10k in year one with 10 machines to 9k in year two with 11 machines, an investor might assume you'll make even less in year three, potentially only 8k, so the value of your company might even fall to 80k or lower. once it is assumed that your earnings will continue to shrink, an investor might value your business based on a higher required rate of return (e.g. maybe 20% instead of 10%), which would cause your share price to fall even further.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "value of credit score if you never plan to borrow again?", "role": "user" }, { "content": "there's many concrete answers, but there's something circular about your question. the only thing i can think of is that phone service providers ask for credit report when you want to start a new account but i am sure that could be worked around if you just put down a cash deposit in some cases. so now the situation is flipped - you are relying on your phone company's credit! who is to say they don't just walk away from their end of the deal now that you have paid in full? the amount of credit in this situation is conserved. you just have to eat the risk and rely on their credit, because you have no credit. it doesn't matter how much money you have - $10 or $10000 can be extorted out of you equally well if you must always pay for future goods up front. you also can't use that money month-by-month now, even in low-risk investments. although, they will do exactly that and keep the interest. and i challenge your assumption that you will never default. you are not a seraphic being. you live on planet earth. ever had to pay $125,000 for a chemo treatment because you got a rare form of cancer? well, you won't be able to default on your phone plan and pay for your drug (or food, if you bankrupt yourself on the drug) because your money is already gone. i know you asked a simpler question but i can't write a good answer without pointing out that \"no default\" is a bad model, it's like doing math without a zero element. by the way, this is realistic. it applies to renting in, say, new york city. it's better to be a tenant with credit who can withhold rent in issue of neglected maintenance or gross unfair treatment, than a tenant who has already paid full rent and has left the landlord with little market incentive to do their part.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how do i calculate rate of return on call options that are spread", "role": "user" }, { "content": "outside of software that can calculate the returns: you could calculate your possible returns on that leap spread as you ordinarily would, then place the return results of that and the return results for the covered call position side by side for any given price level of the stock you calculate, and net them out. (netting out the dollar amounts, not percentage returns.) not a great answer, but there ya go. software like optionvue is expensive", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "net money invested in stock indexes ended up in red", "role": "user" }, { "content": "not sure where you got the 296 crores figure. the data on the sheet shows activity by category of investors. in the end net of all buy and sell across all categories will always be zero. it has no bearing on whether the stock market goes up or goes down. if you compare only activity by certain category, say fii then there could be more sell compared to buy or vice-versa.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "should i buy a home or rent in my situation?", "role": "user" }, { "content": "my recommendation is simple. rent the fact that you have to ask the question is a clear sign that you have no business buying a home. that's not to say that it's a bad question to ask though. far more important then rather it's finically wise for you to buy a home, is the more important question of \"are you emotionally ready for the responsibility and permanence\" of a home. at best, you are tying your self to the same number of rooms, same location, and same set of circumstances for the next 5-7 years. in that time it will be very unlikely that you will be able to sell the house for a profit, get your minor equity back, or even get a second loan for any reason. you mentioned getting married soon, that means the possibility of more children, divorce, and who knows what else. you are in an emotionally and financially turblunt time in your life. now is not the right time to buy anything large. instead rent, and focus on improving your credit rating. in 5 years time you will have a much better credit rating, get much better rates and fees, and have a much better handle on where you want to be with your home/family situation. buying a house is not something you do on a weekend. for most people it's the culmination of years of work, searching, researching, and preparation. often times people that buy before they are ready, will end up in foreclosure, and generally have a crappy next 15 years, as they try to work themselves out of the issue.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why might a robo-advisor service like betterment be preferable to just buying a single well-performing index fund like spy?", "role": "user" }, { "content": "the reason diversification in general is a benefit is easily seen in your first graph. while the purple line (betterment 100% stock) is always below the blue line (s&p), and the blue line is the superior return over the entire period, it's a bit different if you retired in 2009, isn't it? in that case the orange line is superior: because its risk is much lower, so it didn't drop much during the major crash. lowering risk (and lowering return) is a benefit the closer you get to retirement as you won't see as big a cumulative return from the large percentage, but you could see a big temporary drop, and need your income to be relatively stable (if you're living off it or soon going to). now, you can certainly invest on your own in a diverse way, and if you're reasonably smart about it and have enough funds to avoid any fees, you can almost certainly do better than a managed solution - even a relatively lightly managed solution like betterment. they take .15% off the top, so if you just did exactly the same as them, you would end up .15% (per year) better off. however, not everyone is reasonably smart, and not everyone has much in the way of funds. betterment's target audience are people who aren't terribly smart about investing and/or have very small amounts of funds to invest. plenty of people aren't able to work out how to do diversification on their own; while they probably mostly aren't asking questions on this site, they're a large percentage of the population. it's also work to diversify your portfolio: you have to make minor changes every year at a minimum to ensure you have a nicely balanced portfolio. this is why target retirement date portfolios are very popular; a bit higher cost (similar to betterment, roughly) but no work required to diversify correctly and maintain that diversification.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "does high frequency trading provide economic value?", "role": "user" }, { "content": "this is a very important question and you will find arguments from both sides, in part because it is still understudied. ben golub, economics ph.d., from stanford answers \"is high-frequency trading good for the economy?\" on quoram quite well. this is an important but understudied question. there are few published academic studies on it, though several groups are working on the subject. you may be interested in the following papers: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1569067 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1361184 these document some of the phenomena that arise in high frequency trading, from a theoretical and an empirical perspective. however, a full equilibrium analysis of the unique features of high frequency trading is still missing, and until it is done, all our answers will be kind of tentative. nevertheless, there are some obvious things one can say. currently, high frequency traders are competing to locate physically closer and closer to exchanges, because milliseconds matter. thus, large amounts of money are being spent to beat other market makers by tiny fractions of a second. once many firms make these investments, the market looks like it did before in terms of competition and prices, but is a tiny bit faster. this investment is unlikely to be socially efficient: that is, the users of the market don't actually benefit from the fact that their trades are executed half a millisecond faster -- certainly not enough to cover all the investment that went into making that happen. some people who study the issue believe that high frequency trading (hft) actually exacerbates market volatility; some plots to this effect are found in the second paper linked above. there is certainly no widely accepted theory that says faster trading technology necessarily increases efficiency, and it is easy to think of algorithms that can make money (at least in the short run) but hurt most other investors, as well as the informational value of the market. one caution is that some of the complaining about hft comes from those who lose when hft gets better -- old-style market makers. they certainly have an incentive to make hft out to be very bad. so some complaints about the predatory nature of hft should be taken with a grain of salt. there is no strong economic consensus about the value of this activity. for what it's worth, my personal impression is that this is more bad than good. i'll post an update here as more definitive research comes out. you can also find a debate on high-frequency trading from the economist which gives both sides of the argument. in conclusion: regardless of how you feel about hft it seems like it's here to stay and won't be leaving in the foreseeable future. so the debate will rage on... additional resource you may finding interesting: europe begins push to ban hft high frequency trading discussion on cnbc should high frequency trading (hft) be banned ?", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "interest payments for leveraged positions", "role": "user" }, { "content": "i think to some extent you may be confusing the terms margin and leverage. from investopedia two concepts that are important to traders are margin and leverage. margin is a loan extended by your broker that allows you to leverage the funds and securities in your account to enter larger trades. in order to use margin, you must open and be approved for a margin account. the loan is collateralized by the securities and cash in your margin account. the borrowed money doesn't come free, however; it has to be paid back with interest. if you are a day trader or scalper this may not be a concern; but if you are a swing trader, you can expect to pay between 5 and 10% interest on the borrowed money, or margin. going hand-in-hand with margin is leverage; you use margin to create leverage. leverage is the increased buying power that is available to margin account holders. essentially, leverage allows you to pay less than full price for a trade, giving you the ability to enter larger positions than would be possible with your account funds alone. leverage is expressed as a ratio. a 2:1 leverage, for example, means that you would be able to hold a position that is twice the value of your trading account. if you had $25,000 in your trading account with 2:1 leverage, you would be able to purchase $50,000 worth of stock. margin refers to essentially buying with borrowed money. this must be paid back, with interest. you also may have a \"margin call\" forcing you to liquidate assets if you go beyond your margin limits. leverage can be achieved in a number of ways when investing, one of which is investing with a margin account.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "where can i lookup accurate current exchange rates for consumers?", "role": "user" }, { "content": "what you see on xe, is the rate at which it is being traded in the market. what you receive from a broker is the rate minus a fee, for the service being provided. you can check what rates are available for visa and mastercard on the following websites. visa rates mastercard rates i want to shop in the currency that will be cheapest in cad at any given time. this is a mirage and isn't going to help much. the prices you pay might be reflecting the exchange rates, difference in the product quality and other factors too. rates are fixed for a day, so any fx movement you see in the market willn't be reflected in what you pay.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "after consulting hr block, are you actually obligated to file your taxes with them, if they've found ways to save you money?", "role": "user" }, { "content": "it sounds like they want to enter you into a contract in which they are allowed to charge a flat fee for filing contingent on money saving results from a tax review service, paid in full. like those who answered before i have no legal experience. irs circular 230 defines the ethics for tax practitioners and the definition of a tax practitioner is broad enough (effective aug 2011) to include those who are not eas, ctrps, cpas as long as the person is compensated to prepare or assist in a substantial part of the preparation of a document pertaining to a taxpayer's liability for submission to the irs. section 10.27 fees: (b)(2)a practitioner may charge a contingent fee for services rendered in connection with the service’s examination of, or challenge to — (i) an original tax return paragraph c defines what a contingent fee is basically a fee that depends on the specific result attained, in this case saving you money. in the section above 'service's examination' is an audit in plain speak. if your 2013 return has not been submitted and you have not received a written notice for examination, h&r block can not charge a contingent fee, period. furthermore, h&r block cannot hold your tax documents, upon your request, they must return all original tax documents like w2s and 1099s ( they don't have to return the tax forms an employee prepared). like i said above, i'm not a lawyer, unless i missed a key detail, i don't believe they were permitted to charge you a filing fee contingent on saving you money.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how can my friend send $3k to me without using paypal?", "role": "user" }, { "content": "not to overkill the theres a few more i can think of right now", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why would you ever turn down a raise in salary?", "role": "user" }, { "content": "i would turn down a 20% raise in salary without thinking, if they would offer that i can have a 4 day work week. i even take a 10% cut for this!", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is there a term for the risk of investing in an asset with a positive but inferior return?", "role": "user" }, { "content": "i'm sorry for adding another answer @matthewflaschen but it is too long for a comment. it depends on the situation. say you buy shares of the apple inc. and want to know what is the lost opportunity cost. you need to find out what other opportunities are. in other words what are the other possible types of investments you consider. for example in theory you could try to invest in any company from s&p 500, but is it really possible (i don’t mean investing directly in index) . are you really capable of researching each company. so in your case you would consider only a few companies as alternative solutions. also after different time period each choice may be your lost opportunity cost. to measure the risk you have to: in conclusion i want to say that my goal was to picture in general how the process looks. also this is just an exemplary answer. all is about in what finance field you are interested. for example in one field you use internal rate of return and in other value at risk. opportunity cost is to vague to exactly tell how measure its risk of wrong anticipation. it connects in every finance field and in every field you have different ways do deal with it. if you specify your question more, maybe someone will provide a better answer.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "should i put more money down on one property and pay it off sooner or hold on to the cash?", "role": "user" }, { "content": "i would go with the 2nd option (put down as little as possible) with a small caveat: avoid the mortgage insurance if you can and put down 20%. holding your rental property(ies)'s mortgage has some benefits: you can write off the mortgage interest. in canada you cannot write off the mortgage interest from your primary residence. you can write off stuff renovations and new appliances. you can use this to your advantage if you have both a primary residence and a rental property. get my drift? p.s. i do not think it's a good time right now to buy a property and rent it out simply because the housing prices are over-priced. the rate of return of your investment is too low. p.s.2. i get the feeling from your question that you would like to purchase several properties in the long-term future. i would like to say that the key to good and low risk investing is diversification. don't put all of your money into one basket. this includes real estate. like any other investment, real estate goes down too. in the last 50 or so years real estate has only apprepriated around 2.5% per year. while, real estate is a good long term investment, don't make it 80% of your investment portfolio.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is candlestick charting an effective trading tool in timing the markets?", "role": "user" }, { "content": "i interned for about six months at a firm that employed a few technical analysts, so i'll try to provide what little information i can. since the bulk of the intra-day trading was decided algorithmically, technical analysts had two main functions: this basically boils down to my answer to your question. there are still enough people, trading firms, etc. who believe in candlestick charting and other visually subjective patterns that if you notice a trend, pattern, etc. before the majority of traders observing, you may be able to time the market successfully and profit. this is becoming increasingly dangerous, however, because of the steps i outlined above. over time, the charting patterns that have been proven effective (often in many firms individually since the algorithms are all proprietary) are incorporated into computer algorithms, so the \"traders\" you're competing with to see the pattern are increasingly low-latency computer clusters less than a few blocks from the exchange. summary: candlestick charting, along with other forms of subjective technical analysis, has its believers, and assuming enough of these believers trade the standard strategies based on the standard patterns, one could conceivably time the market with enough skill to anticipate these traders acting on the pattern and therefore profit. however, the marginal benefits of doing so are decreasing rapidly as computers take over more trading responsibility. caveats: i know you're in australia, where the market penetration of hf/algo traders isn't as high as in the us, so it might be a few more years before the marginal benefits cease to be profitable; that being said, if various forms of technical analysis proved wildly profitable in australia, above and beyond profits available in other markets, rest assured that large american or british trading firms would already have moved in. my experience is limited to one trading firm, so i certainly can't speak for the industry as a whole. i know i didn't address candlestick charts specifically, but since they're only one piece of visual technical analysis, i tried to address the issue as a whole. this somewhat ties into the debate between fundamental or technical analysis, which i won't get into. investopedia has a short article on the subject. as i said, i won't get into this because while it's a nice debate for small traders, at large trading firms, they don't care; they want to make profit, and any strategy that can be vetted, whether it's fundamental, technical, or astrological, will be vetted. i want to add more information to my answer to clear up some of the misconceptions in the comments, including those talking about biased studies and a lack of evidence for or against technical analysis (and candlestick charts; i'll explore this relationship further down). it's important to keep in mind that charting methods, including candlestick charts, are visually subjective ways of representing data, and that any interpretations drawn from such charts should, ideally, represent objective technical indicators. a charting method is only as good as the indicators it's used to represent. therefore, an analysis of the underlying indicators provides a suitable analysis for the visual medium in which they're presented. one important study that evaluates several of these indicators is foundations of technical analysis: computational algorithms, statistical inference, and empirical implementation by lo, mamaysky, and wang. lest anyone accuse its authors of bias, i should point out that not only is it published by the national bureau of economic research (a highly reputable organization within economics and finance), but also that the majority of its authors come from mit's sloan school, which holds a reputation second to none. this study finds that several technical indicators, e.g. head-and-shoulder, double-bottom, and various rectangle techniques, do provide marginal value. they also find that although human judgment is still superior to most computational algorithms in the area of visual pattern recognition, ... technical analysis can be improved by using automated algorithms since this paper was published in 2000, computing power and statistical analysis have gained significant ground against human ability to identify and exploit for visual pattern detection like candlestick charts. second, i suggest you look into david aaronson's book, evidence-based technical analysis: applying the scientific method and statistical inference to trading signals. he finds similar results to the lo, et. al. paper, in that some technical indicators do add value to the investment process, but those that do are those that can be represented mathematically and thus programmed directly into trading algorithms (thus bypassing visual tools like candlestick charts). he describes how studies, including lo, et al., have found that head and shoulders patterns are worse than random, i.e. you would earn higher returns if you simply traded at random. that point is worth than repeating. if a day-trader is using a candlestick chart and using head-and-shoulders patterns as part of their toolkit, he's rolling the dice when he uses that pattern and returns that come from its application come from chance. this reminds me of that old story about a company that sends out pamphlets predicting the results of sports games, complete with \"strategies\" and \"data\" to back up the predictions. the company sends out several versions of the pamphlet every game, each predicting a different winner. given a large enough sample size, by the end of the season, there are a few people who have received a pamphlet that accurately predicted the winner for every game and they're convinced the system is perfect. the others weren't so lucky, however. relying on candlestick charts and ta patterns that are relics from the pre-computerized era is reassuring to some traders and gives them a sense of control and \"beating the market,\" but how long will chance remain on your side? this is why i maintain that visual tools like candlestick charts are a slowly dying medium. they certainly still add value to some trading firms, which is why bloomberg terminals still ship with this functionality built in, but as more and more research shows, automated algorithms and statistical indicators can provide more value. it's also important to think about whether the majority of the value added by visual tools like candlestick charts comes in the form of profit or a sense of security to traders who learned the field using them over the past few decades. finally, it's extremely important to realize that the actions of retail investors in the equities market cannot begin to represent the behaviors of the market as a whole. in the equities markets alone, trading firms and institutional investors dwarf retail investors, and the difference in scale is even more vastly pronounced in derivatives and currency markets. the fact that some retail investors use candlestick charts and the technical indicators they (hope) underlie them provides nothing but minor anecdotal evidence as to their effectiveness.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what are reasonable administrative fees for an ira?", "role": "user" }, { "content": "whether or not it's reasonable is a matter of opinion, but there are certainly cheaper options out there. it does seem strange to me that your credit union charges a percentage of your assets rather than a flat fee since they shouldn't have to do any more work based on how much money you have invested. i would look into rolling over your ira to vanguard or fidelity. neither charge administrative fees, and they offer no-load and no-transaction fee funds with low expenses. if you went with fidelity directly, you'd be bypassing the middle man (your credit union) and their additional administrative fees. vanguard tends to offer even cheaper funds.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "buy us etf as foreigner a bad idea?", "role": "user" }, { "content": "here're some findings upon researches: two main things to watch out for: estate tax and the 30% tax withholding. these 2 could be get around by investing in luxembourg or ireland domiciled etf. for instance there's no tax withholding on ireland domiciled etf dividend, and the estate tax is not as high. (source: boglehead forums) some vanguard etf offered in uk stock market: https://www.vanguard.co.uk/uk/mvc/investments/etf#docstab. do note that the returns of s&p 500 etf (vusa) are adjusted after the 30% tax withholding! due to vusa's higher ter (0.09%), voo should remain a superior choice. the ftse emerging markets and all-world etfs though, are better than their us-counterparts, for non-us residents. non-us residents are able to claim back partials of the withhold tax, by filing the us tax form 1040nr. in 2013, non-us resident can claim back at least $3,900. kindly correct me if anything is inaccurate.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how to get 0% financing for a car, with no credit score?", "role": "user" }, { "content": "yes, of course it is. car dealers are motivated to write loans even more than selling cars at times. when i bought a new car for the first time in my life, in my 40's, it took longer to get the finance guy out of my face than to negotiate and buy the car. the car dealer selling you the used car would be happy to package the financing into the selling price. similar to how 'points' are used to adjust the actual cost of a mortgage, the dealer can tinker with the price up front knowing that you want to stretch the payment out a bit. to littleadv's point, 3 months isn't long, i think a used car dealer wold be happy to work with you.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how exactly does dealing in stock make me money?", "role": "user" }, { "content": "if you have money and may need to access it at any time, you should put it in a savings account. it won't return much interest, but it will return some and it is easily accessible. if you have all your emergency savings that you need (at least six months of income), buy index-based mutual funds. these should invest in a broad range of securities including both stocks and bonds (three dollars in stocks for every dollar in bonds) so as to be robust in the face of market shifts. you should not buy individual stocks unless you have enough money to buy a lot of them in different industries. thirty different stocks is a minimum for a diversified portfolio, and you really should be looking at more like a hundred. there's also considerable research effort required to verify that the stocks are good buys. for most people, this is too much work. for most people, broad-based index funds are better purchases. you don't have as much upside, but you also are much less likely to find yourself holding worthless paper. if you do buy stocks, look for ones where you know something about them. for example, if you've been to a restaurant chain with a recent ipo that really wowed you with their food and service, consider investing. but do your research, so that you don't get caught buying after everyone else has already overbid the price. the time to buy is right before everyone else notices how great they are, not after. some people benefit from joining investment clubs with others with similar incomes and goals. that way you can share some of the research duties. also, you can get other opinions before buying, which can restrain risky impulse buys. just to reiterate, i would recommend sticking to mutual funds and saving accounts for most investors. only make the move into individual stocks if you're willing to be serious about it. there's considerable work involved. and don't forget diversification. you want to have stocks that benefit regardless of what the overall economy does. some stocks should benefit from lower oil prices while others benefit from higher prices. you want to have both types so as not to be caught flat-footed when prices move. there are much more experienced people trying to guess market directions. if your strategy relies on outperforming them, it has a high chance of failure. index-based mutual funds allow you to share the diversification burden with others. since the market almost always goes up in the long term, a fund that mimics the market is much safer than any individual security can be. maintaining a three to one balance in stocks to bonds also helps as they tend to move in opposite directions. i.e. stocks tend to be good when bonds are weak and vice versa.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what is insider trading exactly?", "role": "user" }, { "content": "using inside sensitive information about corporate and using the same to deal in securities, before the exchanges are made aware of the information. its mostly used in derivatives to get maximum returns on investmens, but its illegal in all the exchanges", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "credit card purchase - 'it is the bank's money no[t] yours' ?", "role": "user" }, { "content": "yes, they're referring to the credit card dispute (chargeback) process. in the case of dispute, credit card company will refund/freeze your charge so you don't have to pay until the dispute is resolved (or at all, if resolved in your favor). if the dispute is resolved in your favor, your credit card company will charge back the merchant's service provider which in turn will charge back (if it can) the merchant itself. so the one taking the most risk in this scenario is the merchant provider, this is why merchants that are high risk pay significantly higher fees or get dropped.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is it possible to get life insurance as a beneficiary before the person insured dies?", "role": "user" }, { "content": "generally no. it does not make sense for insurance company to alter terms and if there are such rules it can be subject to misuse.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "end-of-season car sales?", "role": "user" }, { "content": "manufacturers sometimes give incentives to car dealers to ensure that the prior year models are sold out before the year is up. however, dealers are usually pretty smart on only ordering the cars they know they can sell before this happens. also, manufacturers are usually pretty good about only producing enough vehicles to cover demand. honestly, you aren't likely to see these incentives materialize unless the manufacturer really screwed up. if that happens then three things occur. first is that manufacturers give a hidden incentive to the dealers. dealers won't publicize this, even internally. if the cars are still not moving after a month, then the dealers will tell the salespeople that those cars have a specific \"bonus\" on them. if those cars still don't sell, then the bonus inflates quite a bit and dealers begin advertising that car at a deep discount on the radio. it's pretty much guaranteed to sell at that point. barring those circumstances, the deal you get on a brand new car, late in the model year, is likely to be the same you could have gotten early in the model year. honestly, if you want the best deal possible, look at the date of the inspection sticker on the car. if it is close to the 3 month mark then the dealer will bend over backwards to sell the car as the finance costs are racking up on it. they'll often sell that one at heavy discounts.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how to estimate a reasonable amount for a signing bonus?", "role": "user" }, { "content": "so you've already considered relocation. here are a few additional things to consider with respect to negotiating a signing bonus (if any): would you be leaving a position where you are eligible for an upcoming bonus, profit-share, or other special incentive payout, such as a stock option or rsu vesting date? a signing bonus can help offset the opportunity cost of leaving a previous job when an incentive payout date is near. at the new company, would you be required to wait some pre-defined period to be eligible to participate in the pension or retirement savings plan with employer basic or matching contributions? if you were receiving ongoing employer contributions in your previous company's plan and would need to wait, say, six months before participating in the new company's plan, a signing bonus can offset lost employer contributions in the interim. consider funding your own ira in that time. would you be required to give up something else of value to you that your previous employer was providing, such as an expensive laptop, that is not expected to otherwise be replaced by the new company? whether they offer a signing bonus and how much you can expect to negotiate is based on a lot of factors and you'll need to \"play it by ear.\" remember what bonus means: \"a payment or gift added to what is usual or expected, in particular.\" remember also that a signing bonus is a one time thing. in general, it's more important to consider the overall ongoing compensation package – salary and incentive plans, vacation, retirement benefits, health benefits, etc. – and whether those meet your long-term needs.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what did john templeton mean when he said that the four most dangerous words in investing are: this time its different'?", "role": "user" }, { "content": "there's an elephant in the room that no one is addressing: suckers. usually when there's a bubble, many people are fully aware that its a bubble. \"this time its different\" is a sales pitch to the outsiders. it the dotcom boom for example a lot of people knew that the p/e was ridiculous but bought objectively valueless tech stocks with the idea of unloading them later to even bigger fools. people view it like the children's game musical chairs: as long as i'm not standing when the music ends some other sucker gets left holding the bag. but once you get that first hit of easy money, its sooo tempting to keep playing the game. sometimes, if it lasts long enough, you start to drink your own kool-aid: gee maybe it really is different this time. the best way to win a crooked game is not to play*. *just in case someone thinks i'm advising against the stock market in general, i'm not: i'm advocating not buying stocks that you know are worthless with the hope of unloading them on some other sucker.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "i got my bank account closed abruptly how do i get money out?", "role": "user" }, { "content": "if you can get to a physical branch, get a cashier's check (or call them and have them send you one by mail). when they draft the cashier's check they remove the money from your account immediately and the check is drawn against the bank itself. you could hold onto that check for a little while even after your account closes and you make other arrangements for banking. if you cannot get a cashier's check, then you should try to expeditiously open a new account and do an ach from old to new. this might take more days to set up than you have left though.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "freelancing and getting taxes taken out up front instead of end of year?", "role": "user" }, { "content": "maybe i can explain a little clearer: your llc is not a person, and cannot have taxes withheld on its behalf. therefore, anyone paying your company should not withhold taxes. if they are paying you directly, and withholding taxes, they are treating you as an employee, and will probably issue a w2 instead of a 1099. put it this way: your llc is a separate company providing services to that company. they shouldn't withhold taxes any more than they would when paying their isp, or power company.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "contributing to a roth ira while income tax filing status is married filing separately?", "role": "user" }, { "content": "you must file as married for 2013 if you were married as of december 31, 2013. it is true that the roth ira contribution phaseout for married filing separately is 0 - $10k. but you can still do backdoor roth ira contribution (contribute to a traditional ira, then convert it to a roth ira; assuming you do not have any pre-tax iras, this is identical to a roth ira contribution). but you already made a roth ira contribution for 2013, and did not do the backdoor. let's assume that you want to turn it into a backdoor roth ira contribution, and that you don't have any pre-tax iras. there are two ways to do this: withdraw the roth ira you contributed (including earnings). then, do a normal backdoor roth ira contribution (contribute to a traditional ira, then immediately convert it to roth ira). the earnings you had in the roth ira that you withdrew will be treated as normal income and taxed. the conversion will not be taxable because all of the traditional ira was non-deductible when you converted. re-characterize your original roth ira contribution as a traditional ira contribution, then convert it to roth ira. it will be treated as if you made a traditional ira contribution originally, and then waited until now to convert. the earnings in the ira up till now will be taxed on conversion. so in both cases, you will need to pay income tax on the earnings in the account up to now. the difference between the two is in the amount of money in the ira now. with the first way, you can only contribute $5500 now. with the second way, you will keep the same amount of money you have in the ira now.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "high leverage inflation hedges for personal investors", "role": "user" }, { "content": "look into commodities futures & options. unfortunately, they are not trivial instruments.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is there any online personal finance software without online banking?", "role": "user" }, { "content": "savingsmap is a web-based personal finance forecasting tool that requires no bank account or personal information other than an email address. as founder of savingsmap, our goal is to forecast future cash flows based on your current budget, while using strategies to minimize us tax obligations and taking into account expected major life events.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "do retailers ever stock goods just to make other goods sell better?", "role": "user" }, { "content": "there's a concept in retail called a \"loss leader\", and essentially it means that a store will sell an item intentionally at a loss as a way of bringing in business in the hope that while consumers are in the store taking advantage of the discounted item, they'll make other purchases to make up for the loss and generate an overall profit. many times it only makes sense to carry items that enhance the value of something else the store sells. stores pay big money to study consumer behaviors and preferences in order to understand what items are natural fits for each other and the best ways to market them. a good example of what you're talking about is the fact that many grocery stores carry private label products that sell for higher margins, and they'll stock them alongside the name brands that cost much more. as a consequence (and since consumers often don't see a qualitative difference between store brands and name brands much of the time to rationalize spending more), the store's own brands sell better. i hope this helps. good luck!", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "can llc legally lend money to a friend?", "role": "user" }, { "content": "i can't say if there is anything specific that makes lending illegal, but if your company goes bankrupt, you might end up in trouble. first, it's a loan. it must be repaid. it must be in the books as a loan, and if your company couldn't pay its bills, you would have to ask for the money back. if the company goes bankrupt, your creditors will ask for the loan to be repaid. now if things are worse, your company goes bankrupt, and the person cannot pay back the money, then you could get into real trouble. creditors won't like that situation at all. they will claim that you moved that money aside to protect it from creditors. they might be able to force you personally to pay, or even start criminal charges against you if you can't pay either. in the uk (and probably elsewhere) it's criminal for the company to pay dividends if that means it cannot fulfil its financial obligations. if there is no money left because of that loan, then you can't get dividend payments from your company. so as long as your company's finances are fine, and that person's finances are fine, you will be ok (except i don't know if you would need a license), but if there are financial problems then being an llc might not protect you.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is compounding interest on investments a myth?", "role": "user" }, { "content": "compound growth isn't a myth, it just takes patience to experience. a 10% annual return will double the investment not in 10 years, but just over 7. even though a mortgage claims to use simple interest, if your loan is 5% and there's 14 years to go, $100 extra principal will knock off $200 from the final payment. the same laws of compounding and rule of 72 are at play.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "does an issue of bonus shares improve shareholder value?", "role": "user" }, { "content": "the bonus share also improves the liquidity however there is some difference in treatment. lets say a company has 100 shares, of $10 ea. the total capital of the compnay is 100*10 = 1000. assuming the company is doing well, its share is now available in the market for $100 ea. now lets say the company has made a profit of $1000 and this also gets factored into the price of $100. lets say the company decides to keep this $1000 kept as cash reserve and is not distributed as dividends. in a share split say (1:1), the book value of each share is now reduced to $5, the number of shares increase to 200. the share capital stays at 200*5 = 1000. the market value of shares come down to $50 ea. in a bonus share issue say (1:1), the funds $1000 are moved from cash reserve and transferred to share capital. the book value of each share will remain same as $10, the number of shares increase to 200. the share capital increases to 200*10 = 2000. the market value of shares come down to $50 ea. so essentially from a liquidity point of view both give the same benefit. as to why some companies issue bonus and not a split, this is because of multiple reasons. a split beyond a point cannot be done, ie $10 can be split to $1 ea but it doesn't look good to make it $0.50. the other reason is there is adequate cash reserve and you want to convert this into share holders capital. having a larger share holders capital improves some of the health ratios for the compnay. at times bouns is used to play upon that one is getting something free.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "risk and reward of a synthetic option position", "role": "user" }, { "content": "but if underlying goes to 103 at expiration, both the call and the put expire worthless if the stock closes at 103 on expiration, the 105 put is worth $2, not worthless.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "does this plan make any sense for early 20s investments?", "role": "user" }, { "content": "the plan doesn't make sense. don't invest your money. just keep it in your bank account. $5000 is not a lot, especially since you don't have a steady income stream. you only have $1000 to your name, you can't afford to gamble $4000. you will need it for things like food, books, rent, student loans, traveling, etc. if you don't get a job right after you graduate, you will be very happy to have some money in the bank. or what if you get a dream job, but you need a car? or you get a job at a suit & tie business and need to get a new wardrobe? or your computer dies and you need a new one? you find a great apartment but need $2500 first, last & security? that money can help you out much more now when you're starting out, then it will when you're ready to retire in your 60's.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "impact of extreme situations such as ww2 on legendary investors' returns?", "role": "user" }, { "content": "possibly the best answer to why america became globally dominant after ww2 was written by a frenchman, jean-jacque sergen-schreiber, le defi american (the american challenge). probably the only legendary investor of the proper age to benefit from ww2 was john templeton, who borrowed $10,000 before the war, and ended up with $40,000 afterward (both worth about ten times more in today's money). his story, and that of others, can be found in john train's, \"the money masters.\"", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is a fixed-price natural gas or electricity contract likely to save money?", "role": "user" }, { "content": "the answer to this question will vary considerably by state and how utilities are regulated in your area. in new york, escos (energy supply companies) are almost always a ripoff for consumers versus the old-style regulated utility (in ny the utility supply markups are tightly regulated, but escos are less regulated). you also need to really understand the marketplace rules for \"locking in\" a price. if you can lock in the july price for natural gas for a year, that rocks. there are other factors as well. but even then its a real bet, since weather and supply factors can have a dramatic effect on gas prices in the winter. imo, the best bet is to run with the market rates and bank the efficiency improvements that you build into your home over time. some utilities offer \"budget plans\" that smooth out your payments without interest -- i'd recommend that route if predictable bills are your goal.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what are nscc illiquid charges?", "role": "user" }, { "content": "nscc illiquid charges are charges that apply to the trading of low-priced over-the counter (otc) securities with low volumes. open net buy quantity represents the total unsettled share amount per stock at any given time during a 3-day settlement cycle. open net buy quantity must be less than 5,000,000 shares per stock for your entire firm basically, you can't hold a long position of more than 5 million shares in an illiquid otc stock without facing a fee. you'll still be assessed this fee if you accumulate a long position of this size by breaking your purchase up into multiple transactions. open net sell quantity represents the total unsettled share amount per stock at any given time during a 3-day settlement cycle. open net sell quantity must be less than 10% percent of the 20-day average volume if you attempt to sell a number of shares greater than 10% of the stock's average volume over the last 20 days, you'll also be assessed a fee. the first link i included above is just an example, but it makes the important point: you may still be assessed a fee for trading otc stocks even if your account doesn't meet the criteria because these restrictions are applied at the level of the clearing firm, not the individual client. this means that if other investors with your broker, or even at another broker that happens to use the same clearing firm, purchase more than 5 million shares in an individual otc stock at the same time, all of your accounts may face fees, even though individually, you don't exceed the limits. technically, these fees are assessed to the clearing firm, not the individual investor, but usually the clearing firm will pass the fees along to the broker (and possibly add other charges as well), and the broker will charge a fee to the individual account(s) that triggered the restriction. also, remember that when buying otc/pink sheet stocks, your ability to buy or sell is also contingent on finding someone else to buy from/sell to. if you purchase 10,000 shares one day and attempt to sell them sometime in the future, but there aren't enough buyers to buy all 10,000 from you, you might not be able to complete your order at the desired price, or even at all.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "historical company performance data", "role": "user" }, { "content": "the s&p report (aka stars report) for each company has 10 years of financial data. these reports are available free at several online brokers (like e-trade) if you have an account with the brokerage.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why would my job recruiter want me to form an llc?", "role": "user" }, { "content": "this is pretty normal. i am in the uk and currently doing the exact same thing. as some answers state there is additional tax law called ir35. but thats all it is, an additional tax law that may be applicable to your situation (it very well may not). it is all perfectly legal and common (all my university friends now do it). you will be the director of a company, and invoice the recruiters company. this has benefits and disadvantages. personally i love it, but each to their own. don't do it if you don't want to.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how does a no-limit charge card affect your credit score?", "role": "user" }, { "content": "apparently it is up to the credit card company on how they want to report your available balance. another disadvantage to the no-limit credit card may not be apparent to most people, but it is something noted by organizations like the motley fool, which is expert in many issues of finance and investment. part of your credit score, about 30%, considers the amount of money you have borrowed, and the limit on your present credit cards. a no-limit credit card company may report your limit as $0 if you have not used the card, or they may report a maximum limit available to you. they may not, nor are they obligated, to report times when you put tons of expenses on a credit card and then paid them off. while some companies will report your timely payments and paid off amounts, others simply report an extremely low limit. for instance if you spent $100 us dollars (usd), your limit might be considered $100 usd, or it may merely be reported as zero. you’ll need to check with a credit card company on how they report payments and limits on a no-limit credit card before you obtain one. some people who are scrupulous are paying off their cards at the end of each month suffer major losses to their credit score, without even realizing it, if their spending ability is rated at zero, or their payments don’t count toward showing credit worthiness. source", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "pay yourself with credit card make money with cash back [duplicate]", "role": "user" }, { "content": "the idea is old as dirt, and some millions of people had it before you. credit card swipes cost you between 2.4 and 4.5%, depending on the cards, the provider, and the amounts, plus potentially a fixed small amount per swipe. of course, a 2% cash back card cost more than 2% to swipe; and a 3% cash back card cost more than 3% to swipe; those guys are not morons.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what do i need to consider when refinancing one home to pay the down-payment of another?", "role": "user" }, { "content": "what kind of financial analysis would make you comfortable about this decision? the heloc and arm are the biggest red flags to me in your current situation. while i don't expect interest rates to skyrocket in the near future, they introduce an interest rate risk that is easy to get rid of. getting rid of the heloc and converting to a fixed mortgage would be my first priority. if you also want to upgrade to a new home at the same time (meaning buy a new home contingent on the sale of your first, paying off the heloc and mortgage), that's fine, but make sure that you can comfortably afford the payment on a fixed-rate mortgage with at least 20% down. i would not take additional cash out of your equity just to save it. you're going to pay more in interest that you're going to get in savings. from there things get trickier. while many people would keep the first property on a mortgage and rent it out, i am not willing to be a landlord for a part-time job, especially when the interest on the mortgage gouges my return on the rent. plus leverage increases the risks as well - all it takes is to go one or two months without rent and you can find yourself unable to make a mortgage payment, wrecking your credit and possibly risking foreclosure. so my options in order of precedence would be: at what point does it make sense to become a landlord? the complicated answer is when the benefits (rent, appreciation) relative to the costs (maintenance, interest, taxes, etc.) and risks (lost rent, bad renters, home value variance) give you a better return that you could find in investments of similar risk. the simple answer is when you can pay cash for it. that takes interest and lost rent out of the equation. again, some are willing to take those risks and pay 20% down on rental property. some are able to make it work. some of those go broke or lose their properties. when calculating the 20% down of a new property, does that need to be liquid funds, or can that be based on the value of the home you are selling you can make the purchase of the new home contingent on the sale of the first if you need to get the equity out of it to make the 20%. do not refinance the first just to pull out the equity to make a down payment. it's not worth the fees of a refinance.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is there a candlestick pattern that guarantees any kind of future profit?", "role": "user" }, { "content": "i love technical analysis, and use candlesticks as part of my technical analysis system for trading mutual funds in my 401k. however, i would never use a candlestick chart on its own. i use combination of candlesticks, 2 different emas, macd, bollinger bands, rsi and hand drawn trend lines that i constantly tweak. that's about as much data input as i can handle, but it is possible to graph it all at once and see it at a glance if you have the right trading platform. my approach is very personal, not very aggressive, and took me years to develop. but it's fairly effective - 90% + of my trades are winners. the big advantage of technical analysis is that it forces you to create repeatable rules around which you base your trading. a lot of the time i have little attention at all on what fund i am trading or why it is doing well in that particular market condition. it's basically irrelevant as the technical system tells when to buy and sell, and stops you trying to second guess whether housing, chemicals, gold or asian tigers are is doing well right now. if you don't keep to your own rules, you have only yourself to blame. this keeps you from blaming the market, which is completely out of your control. i explain many of my trades with anotated graphs at http://neurotrade.blogspot.com/", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "best time to buy a stock in a day", "role": "user" }, { "content": "one of the biggest laws in economics is that if an opportunity is very profitable and is very easily exploitable even by complete beginners, then it will very soon stop being profitable. that's how the market works. if you buy stock when it is at the lowest, then you are making money, but most of the time someone else is losing money. and if there was a magic hour of the day when buying would be the most profitable, then soon everybody would want to buy at that time and no one would want to sell anything, so the scheme would collapse.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how can i diversify investments across currencies in isa?", "role": "user" }, { "content": "just buy a ftse-100 tracker. it's cheap and easy, and will hedge you pretty well, as the ftse-100 is dominated by big mining and oil companies who do most of their business in currencies other than sterling.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "everyone got a raise to them same amount, lost my higher pay than the newer employees", "role": "user" }, { "content": "why do you think you are entitled to \"fairness\"? in this world you get what you get. i am pretty sure your employer is not paying you for how you \"feel\" either. and by-the-way turning up on time and not leaving early is not exceptional behaviour; it is expected behaviour. bottom line: do you add more value to your employer's business then the new hires? if so, ask for a raise, if not find a way to add more value and then ask for a raise or keep doing what you're doing and accept what you get.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is there any instance where less leverage will get you a better return on a rental property?", "role": "user" }, { "content": "quick answer when it comes to fixed income assets, whether rental real estate or government bonds, it's unusual for highly-leveraged assets to yield less than the same asset unleveraged or lowly-leveraged. this is especially so in countries where interest costs are tax deductible. if we exclude capital losses (i.e. the property sells in future at a price less than it was purchased) or net rental income that doesn't keep up with maintenance, regulatory, taxation, inflation and / or other costs, there is one primary scenario where higher leverage results in lower yields compared to lower leverage, even if rental income keeps up with non-funding costs. this occurs when variable rate financing is used and rates substantially increase. explanation borrowers and lenders in different countries have different mortgage rate customs. some are more likely to have long-term fixed rates; some prefer variable rates; and others are a hybrid, i.e. fixed for a few years and then become variable. if variable rates are used for a mortgage and the reference rates increase substantially, as they did in the us during the 1970s, the borrower can easily become \"upside-down,\" i.e. owe more on the mortgage than the property is then worth, and have mortgage service costs that exceed the net rental income. some of those costs aren't easy to pass along to renters, even when there are periodic lease renewals or base rent increases referencing inflation rates. central banks set policies for what would be the lowest short-term rates in a country that has such a bank. private sector rates are established broadly by supply and demand for credit and can thus diverge markedly from central bank rates. over time, the higher finance-carrying-cost-to-net-rental-income ratio should abate as (1) rental market prices change to reflect the costs and (2) the landlord can reinvest his net rental income at a higher rate. in the short-term though, this can result in the landlord having to \"eat\" the costs making his yield on his leveraged fixed income asset less than what he would have without leverage, even if the property was later sold at same price regardless of financing method. ========== interestingly, and on the flip side, this is one of the quirks in finance where an accounting liability can become, at least in part, an economic asset. if a landlord borrows at a high loan-to-value ratio for a fixed interest rate for the life of the mortgage and rates, variable and fixed, were to increase substantially, the difference between his original rate and the present rates accrues to him. if he's able to sell the property with the loan attached (which is not uncommon for commercial, industrial and sometimes municipal real estate), the buyer will be assuming a liability with a lower carrying cost than his present alternatives and will hence pay a higher price for the property than if it were unleveraged. with long-term rates in many economically advanced countries at historic lows, if a borrower today were to take a long-term fixed rate loan and rates shortly after increased substantially, he may have an instant profit in this scenario even if his property hasn't increased in value.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "insurance company sent me huge check instead of pharmacy. now what?", "role": "user" }, { "content": "in one of your comments you say: even if the pharmacy is not in the insurance provider network? this is why you got the check instead of your insurance company. i have blue cross/blue shield, and recently my wife underwent a procedure in the hospital, where one of the physicians involved was not in my providers network. i got a letter from the physicians office stating that since they are out of network, the standard practice was for bcbs to issue the check to me, rather than to the provider. i received the check and made the payment. the main contention is the difference in price, and that is what you need to discuss with both the pharmacy (actual billing) and your insurance company (paid benefits).", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "legal right to ask for someone bank records uk", "role": "user" }, { "content": "you might want to head on over to https://law.stackexchange.com/ and ask the same question. however from a personal finance perspective this kind of drama is somewhat common when someone is deceased and financial expectations are not met by the heirs. it sounds like the daughter was expecting a lot more in inheritance than was actually received. there was probably an overestimation of dad's net worth and an underestimation of the cost of his care toward the end of his life. its best not to participate in this drama, and i feel that you are correct that the daughter does not have a right to see the bank account statements prior to dad's passage. the question is also if she has a right to see it now. here in the us a joint account can be setup so the ownership transfers to other account holder(s) up death of an owner. so in this case your mother would own the account. if the account is setup as such, then the estate has no right to that money. you may want to check with the bank for some free advice. what is the classification of the account now that dad has passed? when a person grants someone else the power of attorney they have the ability to act as if they were that person. most of the time poas are limited in scope so if i give a person the poa to register a car in my name, they cannot apply for a credit card in my name (legally). in this case, however, the poa was probably general so pretty much your mom could do whatever she pleased. so if your mom took good care of the dad and bought herself some nice jewelry that is perfectly allowable with a general poa. i strongly doubt this daughter has any rights to the past records and may not even have the rights to the joint bank account currently.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how does start-up equity end up paying off?", "role": "user" }, { "content": "read the book, \"slicing pie: fund your company without funds\". you can be given 5% over four years and in four years, they hire someone and give him twice as much as you, for working a month and not sacrificing his salary at all. over the four years, the idiot who offered you the deal will waste investors money on obvious, stupid things because he doesn't know anything about how to build what he's asking you to build, causing the need for more investment and the dilution of your equity. i'm speaking from personal experience. don't even do this. start your own company if you're working for free, and tell the idiot who offered you 5% you'll offer him 2% for four years of him working for you for free.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what is the next step to collect money after a judgment has been ignored?", "role": "user" }, { "content": "a lawyer might be overkill for recovering a judgment. do a google search for \"judgment recovery service\" in your area. they specialize in what you're trying to do. the service will charge you a fee (usually 10%) for any monies recovered. what happens is that you assign the right to collect on the judgment to the service, and their staff can run with it from there. whoever you contract with will get as much information as possible about your ex-husband: employment, businesses, and so forth. this information can be used to have levies issued by the state, wage garnishment and so forth. there is no given timetable for how long it takes. if your ex is indigent, it would be hard to collect by way a recovery service or an attorney, because you can't collect what he doesn't have.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why is a stock dividend considered a dividend? what makes it different from a stock split?", "role": "user" }, { "content": "a stock dividend isn't exactly a split. example: you have 100 shares of stock worth $5 a share (total value $500). the company wants to distribute a dividend worth 1%. you could expect a check for $5. but if they wanted to do a stock dividend they could send you 0.01 shares for every share you own, in your case you will be given a single share worth $5. now you own 101 shares. why a share dividend? it doesn't take cash to give the dividend. it keeps the money invested in the company. some investors re-invest a cash dividend, some don't. a cash dividend is generally taxable income for the investor; a stock dividend isn't. some investors prefer one over the other, but it depends on their specific financial picture. neither a stock dividend, a cash dividend or split changes anything. the split changes the price to meet a goal. the cash dividend lowers the price by sending excess cash to the investors. the stock dividend lowers the price by creating new shares and retaining cash. it company picks the message and the method. depending on their goals and situation. remember that a company may want to give a dividend because they have a history of doing so, but not have the cash to do so. it is like a split because the number of shares you own will go up, and the price per share will go down. but a split is generally done to bring the price of a share to within a specific range. the company sees a benefit to having a stock mid priced, instead of very high or very low.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what kinds of information do financial workers typically check on a daily basis?", "role": "user" }, { "content": "google finance and yahoo! finance would be a couple of sites you could use to look at rather broad market information. this would include the major us stock markets like the dow, nasdaq, s & p 500 though also bond yields, gold and oil can also be useful as depending on which area one works the specifics of what are important could vary. if you were working at a well-known bond firm, i'd suspect that various bond benchmarks are likely to be known and watched rather than stock indices. something else to consider here is what constitutes a \"finance practitioner\" as i'd imagine several accountants and actuaries may not watch the market yet there could be several software developers working at hedge funds that do so that it isn't just a case of what kind of work but also what does the company do.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why does the calculation for percentage profit vary based on whether a position is short vs. long?", "role": "user" }, { "content": "simple math: 50-25=25, hence decline from 50 to 25 is a 50% decline (you lose half), while an advance from 25 to 50 is 100% gain (you gain 100%, double your 25 to 50). their point is that if you have more upswings than downswings - you'll gain more on long positions during upswings than on short positions during downswings on average. again - simple math.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why would selling off some stores improve a company's value?", "role": "user" }, { "content": "maybe the location isn't yet, but will soon become a new loss. for example older soon out of warranty equipment, new tax laws in the locality soon to take affect or even just declining sales over the past periods of measurement. perhaps labor disputes or other locality issues make running the store difficult. there is the possibility that the land the location occupies is worth more sold to the new big box retailer than it will be in the next 10 years of operation. in some cases, companies want to have a ton of cash on hand, or would sell assets to pay off debt.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "should i have more than one brokerage account?", "role": "user" }, { "content": "i believe the answer here is no: sipc protection of customers with multiple accounts is determined by \"separate capacity.\" each separate capacity is protected up to $500,000 for securities and cash (including a $250,000 limit for cash only). accounts held in the same capacity are combined for purposes of the sipc protection limits. so even having 2 individual accounts - you would only be covered for $500,000/$250,000. you can see more about the type of accounts that would give your more coverage here. also note: if you own a stock - the record probably exist. therefore you would not lose your ownership or shares. the sipc is there to protect the times this does not happen.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how can i profit on the chinese real-estate bubble?", "role": "user" }, { "content": "perhaps buying some internationally exchanged stock of china real-estate companies? it's never too late to enter a bubble or profit from a bubble after it bursts. as a native chinese, my observations suggest that the bubble may exist in a few of the most populated cities of china such as beijing, shanghai and shenzhen, the price doesn't seem to be much higher than expected in cities further within the mainland, such as xi'an and chengdu. i myself is living in xi'an. i did a post about the urban housing cost of xi'an at the end of last year: http://www.xianhotels.info/urban-housing-cost-of-xian-china~15 it may give you a rough idea of the pricing level. the average of 5,500 cny per square meter (condo) hasn't fluctuated much since the posting of the entry. but you need to pay about 1,000 to 3,000 higher to get something desirable. for location, just search \"xi'an, china\" in google maps. =========== i actually have no idea how you, a foreigner can safely and easily profit from this. i'll just share what i know. it's really hard to financially enter china. to prevent oversea speculative funds from freely entering and leaving china, the admin of forex (safe.gov.cn) has laid down a range of rigid policies regarding currency exchange. by law, any native individual, such as me, is imposed of a maximum of $50,000 that can be converted from usd to cny or the other way around per year and a maximum of $10,000 per day. larger chunks of exchange must get the written consent of the admin of forex or it will simply not be cleared by any of the banks in china, even hsbc that's not owned by china. however, you can circumvent this limit by using the social id of your immediate relatives when submitting exchange requests. it takes extra time and effort but viable. however, things may change drastically should china be in a forex crisis or simply war. you may not be able to withdraw usd at all from the banks in china, even with a positive balance that's your own money. my whole income stream are usd which is wired monthly from us to bank of china. i purchased a property in the middle of last year that's worth 275,000 cny using the funds i exchanged from usd i had earned. it's a 43.7% down payment on a mortgage loan of 20 years: http://www.mlcalc.com/#mortgage-275000-43.7-20-4.284-0-0-0.52-7-2009-year (in cny, not usd) the current household loan rate is 6.12% across the entire china. however, because this is my first property, it is discounted by 30% to 4.284% to encourage the first house purchase. there will be no more discounts of loan rate for the 2nd property and so forth to discourage speculative stocking that drives the price high. the apartment i bought in july of 2009 can easily be sold at 300,000 now. some of the earlier buyers have enjoyed much more appreciation than i do. to give you a rough idea, a house bought in 2006 is now evaluated 100% more, one bought in 2008 now 50% more and one bought in the beginning of 2009 now 25% more.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what is my next step with investing, given a signing bonus of restricted stock units?", "role": "user" }, { "content": "coincidentally just read a nice post on this topic: http://thefinancebuff.com/no-tax-advantage-in-rsu.html in short, sell the stock as soon as it vests and treat it as a cash bonus. assuming you're in the us and the stock is possible to sell (public company, no trading window restrictions, you have no material nonpublic information, etc.) what do you do with a cash bonus? if you have no savings, an emergency fund would be good, then start on retirement savings perhaps... it sounds a bit like you could use some broad general financial planning info, my favorite book for that is: http://www.amazon.com/smart-simple-financial-strategies-people/dp/b0013l2ed6 one exception to selling immediately could be if the company stock is hugely undervalued, but it probably isn't, and it's probably too hard to determine.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "solid reading/literature for investment/retirement/income taxes?", "role": "user" }, { "content": "you bring up some very high level stuff, each of which can be the subject of a life's work. for taxes, i first read j.k. lasser's your income tax. i actually read it cover to cover instead of using it as a reference guide. i hit topics that i'd otherwise have never looked up on purpose. once you familiarize yourself with the current tax code, keeping up on changes to the code goes pretty well. as far as investing goes, william bernstein has two titles, “the four pillars of investing” and “the intelligent asset allocator”. others have liked “personal finance for dummies” by eric tyson. these are great introductory books, the classic is “security analysis” by graham & dodd. warren buffet was a student of benjamin graham and he did fine applying these principals. for retirement, the number by lee eisenberg was a good read. i consider retirement an extension of the investing education, only the money flow is reversed, withdrawals, no new deposits. of course this is an oversimplification. in my own reading list, i include books such as “extraordinary popular delusions & the madness of crowds” by charles mackay and “the great crash 1929″ by john kenneth galbraith. understanding how these bubbles happen is critical to a complete education. i'm convinced that when it comes to investing if i can teach my daughter to understand the concept of risk and reward and to understand there are certain common alerts to such bubbles, the simplest of which is the term \"this time is different\" as though a hundred years of market dynamics can change in a matter of a few years. last, there are books like \"stop acting rich\" by dr thomas stanley. not quite investing, per se, but a good read to get an idea of how we have a distorted view of certain signs of wealth. keep reading, no harm in taking books out of the library and returning if the first chapter or two disappoints.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what's the purpose of having separate checking and savings accounts?", "role": "user" }, { "content": "a checking account is instant access. it can be tapped via check or debit card. a savings account is supposed to be used to accumulate cash for a goal that is is longer term or for an emergency. many people need to separate these funds into different accounts to be able to know if they are overspending or falling short on their savings. in the united states the federal reserve also looks at these accounts differently. money in a checking account generally can't be used to fund loans, money in a savings account can be used as a source of loans by the bank. an even greater percentage of funds in longer term accounts can be used to fund loans. this includes certificates of deposit, and retirement accounts.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "can stock market gains be better protected under an llc arrangement?", "role": "user" }, { "content": "all corporate gains are taxed at the same rate as corporate income, for the corporate entity, so this actually can be worse than the individual capital gains tax rates. there are a lot of things you can do with trading certain asset classes, like opening you up to like-kind re-investment tax perks, but i can't think of anything that helps with stocks. also, in the us there is now a law against doing things solely to avoid tax if they have no other economic purpose. so be conscious about that, you'll need to be able to rationalize at least a thin excuse for why you jumped through all the hoops.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how can schwab afford to refund all my atm fees?", "role": "user" }, { "content": "i am using my debit card regularly: in atm's with a pin, in stores with my signature, and online. but later you say but from what i recall from starting my own business (a long time ago), for debit cards there's only a per-transaction fee of like $0.25, not a percentage cut. only pin transactions have just a per-transaction fee paid by you to the merchant (and you are reimbursed by schwab). if you use your card with just a signature or online without a pin, then it is a credit transaction from the merchant's perspective. the merchant pays a fee and schwab gets its cut of that. so for two of the transaction types that you describe, the merchant pays schwab (indirectly) out of your payment. only when you enter your pin does it process as a debit transaction where schwab pays the merchant. because check cards withdraw the money from your account immediately, you don't even get the twenty to fifty day grace period. so those merchant fees are pure profit for schwab, offsetting the loss from the atm fees. you claim $4-5k in fees at $.25 each. that's sixteen to twenty thousand transactions. assuming that several is four to five years, that's more than ten transactions a day. that seems like a lot. i can see three for meals, one for miscellaneous, and maybe some shopping. but if i go shopping one day, i don't normally go again for a while. i have trouble seeing a consistent average of five or more transactions a day. even if we use just the higher atm fees (e.g. $2), that's still more than a transaction a day. that's an extreme level of usage, particularly for someone who also makes frequent purchases via card. i haven't done any other business with them. i find this confusing. how does money get into your account? at some point, you must have deposited money into the account. you can't debit from an account without a positive balance. so you must have done or be doing some kind of business with them. if nothing else, they can invest the balance that you deposit. note that they make a profit off such investments. they share some of that profit with you in the form of interest, but not that much really. of course, schwab may still be losing money on your transactions. we can't really tell without more information on how much of each transaction type you do and how much of a balance you maintain. perhaps they are hoping that you will do other, more profitable, activities in the future. i doubt there are that many schwab customers like you describe yourself. as best i've been able to see, they advertise their banking services just to investment customers. so it's unlikely that many customers who don't use their investment services use their banking services just for atm reimbursements.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what emergencies could justify a highly liquid emergency fund?", "role": "user" }, { "content": "emergency funds are defined in terms of months of tightened-belt living -- that's according to the usual gurus such as suze orman, dave ramsey etc. they aren't for short-term emergencies like a blown transmission. use other money for those. why? people with bad financial habits have short-term emergencies all the time, and that emergency fund doesn't have a chance of lasting. this is just their financial habits manifesting. here's what an emergency fund is for. scenario: big economic bubble bursts. stock market drops 50%. credit dries up. this happened in 2007 by the way. the dominoes start falling boom, boom, boom: i'm exaggerating a bit here, but a lot of people lived at least half this stuff in 2007-11. nothing starts those dominoes falling like lack of cash at a key moment. that's what an emergency fund is all about - keeping things tight-normal for long enough to get back on your feet. if you want to keep your emergency fund in something risky -- keep a lot more of it!", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why do car rental companies prefer/require credit over debit cards?", "role": "user" }, { "content": "a few reasons make sense: they have a defined process for rentals, risk assessment, and customer credit. especially for a large corporation, making changes to that process is not trivial, adds risk/uncertainty, and will be costly. such changes for a relatively small customer base might not makes sense. many rental companies do allow you to rent with a debit card. why do some businesses take cash only? with a debit card, there is no third party guarantee. with a credit card, the cash is coming from a well-established third party who will pay (assuming no disputes) and has a well-established history of paying. even if the merchant holds your account, it is still your cash under the control of you and your bank until the deposit clears the merchants bank. it is not surprising they view that as more risk and potentially not worth hassling with debit.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "tracking gold and silver (or any other commodity investment) in quicken 2010?", "role": "user" }, { "content": "you don't need to use a real stock like gld. you can just create a \"stock\" called something like \"1 oz gold\" and buy and sell them as if they were shares. it won't auto-update the price like gld, but that's not a big deal to update manually once a month or so. i prefer to have accurate data that is correct at a particular point in time to having data that is 2-3% off, or that requires entering the ounces as 10x reality. ymmv. this is very similar to how you track us savings bonds in quicken (and might be described in the help under that topic.)", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how can i invest in an index fund but screen out (remove) certain categories of socially irresponsible investments?", "role": "user" }, { "content": "hmm, this would seem to be impossible by definition. the definition of an \"index fund\" is that it includes exactly the stocks that make up the index. once you say \"... except for ...\" then what you want is not an index fund but something else. it's like asking, \"can i be a vegetarian but still eat beef?\" umm, no. there might be someone offering a mutual fund that has the particular combination of stocks that you want, resembling the stocks making up the index except with these exclusions. that wouldn't be an index fund at that point, but, etc. there are lots of funds out there with various ideological criteria. i don't know of one that matches your criteria. i'd say, search for the closest approximation you can find. you could always buy individual stocks yourself and create your own pseudo-index fund. depending on how many stock are in the index you are trying to match and how much money you have to invest, it may not be possible to exactly match it mathematically, if you would have to buy fractions of shares. if the number of shares you had to buy was very small you might get killed on broker fees. and i'll upvote @user662852's answer for being a pretty close approximation to what you want.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why invest in becoming a landlord?", "role": "user" }, { "content": "the value of getting into the landlord business -- or any other business -- depends on circumstances at the time. how much will it cost you to buy the property? how much can you reasonably expect to collect in rent? how easy or difficult is it to find a tenant? etc. i owned a rental property for about ten years and i lost a bundle of money on it. things people often don't consider when calculating likely rental income are: there will be times when you have no tenant. someone moves out and you don't always find a new tenant right away. maintenance. there's always something that the tenant expects you to fix. tenants aren't likely to take as good a care of the property as someone who owned it would. and while a homeowner might fix little things himself, like a broken light switch or doorknob, the tenant expects the landlord to fix such things. if you live nearby and have the time and ability to do minor maintenance, this may be no big deal. if you have to call a professional, this can get very expensive very quickly. like for example, i once had a tenant complain that the water heater wasn't working. i called a plumber. he found that the knob on the water heater was set to \"low\". so he turned it up. he charged me, i think it was $200. i can't really complain about the charge. he had to drive to the property, figure out that that was all the problem was, turn the knob, and then verify that that really solved the problem. tenants don't always pay the rent on time, or at all. i had several tenants who apparently saw the rent as something optional, to be paid if they had money left over that they couldn't think of anything better to do with. you may get bad tenants who destroy the place. i had one tenant who did $10,000 worth of damage. that include six inches deep of trash all over the house that had to be cleared out, rotting food all over, excrement smeared on walls, holes in the walls, and many things broken. i thought it was disgusting just to have to go in to clean it up, i can't imagine living like that, but whatever. depending on the laws in your area, it may be very difficult to kick out a bad tenant. in my case, i had to evict two tenants, and it took about three months each time to go through the legal process. on the slip side, the big advantage to owning real estate is that once you pay it off, you own it and can continue to collect rent. and as most currencies in the world are subject to inflation, the rent you can charge will normally go up while your mortgage payments are constant.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how do you find out who the investors are in a u.s. stock? e.g. how ownership may be concentrated?", "role": "user" }, { "content": "i don't think that you will be able to find a list of every owner for a given stock. there are probably very few people who would know this. one source would be whoever sends out the shareholder meeting mailers. i suspect that the company itself would know this, the exchange to a lesser extent, and possibly the brokerage houses to a even lesser extent. consider these resources:", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how it actually works? selling a call on a stock i hold, but has done poor, might the market thinks may rise", "role": "user" }, { "content": "what you are proposing is called a \"covered call\" strategy. it is a perfectly reasonable speculative play on how far the stock will move within a certain amount of time. if your belief that the stock's volatility is such that it is unlikely to reach the strike price before the maturity is greater than the markets (which it seems it is), then go ahead and sell the call.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why do people buy insurance even if they have the means to overcome the loss?", "role": "user" }, { "content": "for a car, you're typically compelled to carry insurance, and picking up \"comprehensive\" coverage (fire, theft, act of god) is normally cheap. if the car was purchased with a loan, the lender will stipulate that you carry comprehensive and collision insurance. people buy insurance because it limits their liability. in the grand scheme of things, pricing in a fixed rate of loss every year (insurance premium + potential deductible) is appealing to many versus having to cover a catastrophic loss when your car is wrecked or stolen.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why doesn't buy at open get the official open price?", "role": "user" }, { "content": "there is no official price. there is only the price a seller is willing to offer and a buyer is willing to accept at that moment. it tends to be close to the price negotiated for the last such sale, but that's just market statistics, not anything actively managed or guaranteed. \"past performance is no guarantee of future results;\" this buyer and seller may not agree with the previous pair. especially when the market has been closed overnight but real-world events have continued to occur.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how to increase my credit score", "role": "user" }, { "content": "get a credit card is not the answer. the reason people have a bad (or no) credit score is often because they're new to the country, have just turned 18, have previously fallen into arrears or are just bad with money. getting a credit card is risky because, if you don't stay on top of your payments, it'll just damage your score even more. now, it sounds like i hate credit cards - but i don't, and they do have their benefits. but avoid them if possible because they can be more hassle than they're worth (ie, paying the credit back on-time, cancelling accounts when the interest comes in, moving money in and out of accounts). it's risky borrowing money from anywhere whether it's a payday lender, a bank, a credit card, etc., so use them as a last resort. if you've got your own income then that's amazing!, try not to live outside of your means and your credit score will look after (and increase) itself. it takes time to build a good credit score, but always make sure you pay the people you owe on time and the full amount. i'd stick with paying your phone provider (and any other direct debits you have setup) and avoid getting a credit card. i'd recommend noddle to keep track of your credit score and read their faq on how to help build it. unlike experian, it's free forever so not quite as detailed... but noddle are owned by callcredit - one of the biggest credit reference agencies in the uk so they should have the latest information on yourself. in conclusion, if you already have financial commitments like a mobile phone bill, gym membership, store cards, anything that gets paid monthly by direct debit... your credit score will increase (provided you pay the full-amount on time). i hope this helps. ps. i don't work for any of the companies here, but i've been working in the finance sector (more specifically, short-term loans) for 3+ years now.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why do i see multiple trades of very small quantities?", "role": "user" }, { "content": "it looks more like someone is trying to pocket the spread. the trades are going off at the bid then the ask (from what i can tell without any l1 and l2 data, but the spread could be bigger than what the prices show, since the stock looks pretty volatile given the difference between current price and vwap...). looking through the jse rule books i didn't find any special provisions on how they handle odd lots in their central order book, but the usual practice in other markets is to display only round lot orders. so these 4 share orders would remain hidden from book participants and could be set there to trigger executions from those who are probing for limit orders. or to make a market with very limited risk.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how to save money for future expenses", "role": "user" }, { "content": "first, talk to your husband about this. you really need to persuade him that you need to be saving, and get him to agree on how and how much. second, if you husband is not good at saving, work on getting something set aside automatically - ideally deducted from a paycheck or transferred to a savings account automatically. if he is the kind of person who might dip into that account, try to make it a place he can't withdraw from third, get some advice, possibly training, on budgeting. buy a book, take a video course: even start by watching some tv shows on getting out of debt.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "is it wise to switch investment strategy frequently?", "role": "user" }, { "content": "a guy who does a sports talk show here in the us can be pretty smart about some things. his advice: if you are wondering if something is a good idea, say it out loud. in his book he cites the fact that people thought, at one time, it would be a good idea to allow smoking on airline flights. keep in mind you are using liquid oxygen, news paper, and are 10,000+ feet up in the air. say it like that and you hit yourself in the forehead. read the title of your question in a day or two, and you can answer it yourself with a resounding no.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "in the stock market, why is the open price value never the same as previous day's close?", "role": "user" }, { "content": "nobody has mentioned the futures market yet. although the stock market closes at 4pm, the futures market continues trading 24 hours a day and 5.5 days a week. amongst the products that trade in the future market are stock index futures. that includes the dow jones, the s&p 500. these are weighted averages of stocks and their sectors. you would think that the price of the underlying stock dictates the price of the average, but in this day and age, the derivative actually changes the value of the underlying stock due to a very complex combination of hedging practices. (this isn't meant to be vague and mysterious, it is \"delta hedging\") so normal market fluctuations coupled with macroeconomic events affect the futures market, which can ripple down to individual stocks. very popular stocks with large market caps will most certainly be affected by futures market trading. but it is also worth mentioning that futures can function completely independently of a \"spot\" price. this is where things start to get complicated and long winded. the futures market factor is worth mentioning because it extends even outside of the aftermarket and pre-market hours of stock trading.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "online tools for monitoring my portfolio gains/losses in real time?", "role": "user" }, { "content": "this functionality is widely available, not only on brokerage sites, but also financial management and even financial information sites. for instance, two of the latter are google finance and yahoo finance. if you are logged in, they let you create \"portfolios\" listing your stocks and, optionally, the size of your holdings in that stock (which you don't need if you are just \"watching\" a stock). then you can visit the site at any time and see the current valuations.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "shares canceled after merger", "role": "user" }, { "content": "it seems like this was a \"stock for stock\" transaction. that is, your company was acquired, not for cash, but for the stock of company x in a deal that your company's board of directors \"signed off\" on. your company no longer exists, and that's why your stock was cancelled. the acquirer will be sending you an equivalent amount of stock in their company, x. you don't need to worry about taxes, only accounting, because this is a \"non-cash\" transaction. what this means that your cost basis in the stock of company x will be what you paid for the original company's stock (not its value on the day of the merger, which may be higher or lower than what you paid).", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how do i apply for a mortgage after a cash closing on a property?", "role": "user" }, { "content": "is she correct in that you generally can't even apply until the cash transaction is complete? probably. how can you commit to mortgage something you do not own? makes sense for them to wait not even until the transaction is complete - but until the transaction is recorded. is 45 days reasonable to complete the financing? yes.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how fast does the available amount of gold in the world increase due to mining?", "role": "user" }, { "content": "if that fraction is really small, then the amount of gold can be thought of as relatively constant. that fraction is very small. after all, people have been mining gold for thousands of years. so the cumulative results of gold mining have been building up the supply for quite some time. meanwhile, owners of gold rarely destroy it. a little bit of gold is used in some industries as a consumable. this limited consumption of gold offsets some of the production that comes from mining. but truthfully this effect is minuscule. for the most part people either hoard it like its made of gold, or sell it (after all it is worth its weight in gold). if you're interested wikipedia lists a few more factors that affect gold prices. (if you're not interested wikipedia lists them anyway.)", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "self-directed rrsp into mortgage investment", "role": "user" }, { "content": "the globe and mail has an interesting article on what you can do with your rrsps. be aware that the article is from early 2011 and rules change. they describe holding your own mortgage inside your rrsp. that is, if you have $100,000 inside your rrsp already and your remaining mortgage is $100,000, you can use that money to pay off your mortgage, then pay back the money at interest, generating a tax-deferred profit inside your rrsp. that approach may be viable, though you'd want to talk to your accountant first. i'd be very cautious about loaning money to someone else for a second mortgage using my rrsp, though. second mortgages are inherently risky, so this is a very speculative investment. once you make an rrsp contribution, that space is used up (barring a couple of exceptions such as the life-long learning plan). so, let's say you used $100,000 of your rrsp to loan to someone for a second mortgage. any interest payments should be sheltered inside the rrsp (substantial benefit), but if the person defaults on the second mortgage (which you should expect to be a significant possibility), you've lost your entire $100,000 contribution room (as well as, obviously, the $100,000 that you loaned out). i can't tell you whether or not it makes sense to invest in risky second-mortgage loans and i can't tell you whether, if you choose to do so, it definitely should be done inside an rrsp. there are substantial risks in the loan and there are both costs and benefits to doing so inside an rrsp. hopefully, though, i've helped you understand the questions you should be asking yourself.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "can the securities investor protection corporation (sipc) itself go bankrupt?", "role": "user" }, { "content": "not sure if i follow your question completely. re: what if some fraud takes place that's too big even for it to fund? sipc does not fund anything. what it does is takes over the troubled brokerage firm, books / assets and returns the money faster. refer to sipc - what sipc covers... what it does not and more specifically sipc - why we are not the fdic. sipc is free for ordinary investors. to get the same from elsewhere one has to pay the premium. edit: the event we are saying is a large brokrage firm, takes all of the margin money from customer accounts and loses it and also sell off all the stocks actually shown as being held in customer account ... that would be to big. while its not clear as to what exactly will happens, my guess is that the limits per customers will go down as initial payments. subsequent payments will only be done after recover of funds from the bankrupt firm. what normally happens when a brokrage firm goes down is some of the money from customers account is diverted ... stocks are typically safe and not diverted. hence the way sipc works is that it will give the money back to customer faster to individuals. in absence of sipc individual investors would have had to fight for themselves.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "buying a car and learning to drive versus paying up study loans", "role": "user" }, { "content": "welcome to money.se. it appears there's public transportation to get you to work? and the area by your house is walkable? i.e. you and your wife can get groceries and other needs by walking. if it will take 5 years to pay the loans even without a car, how long if you get one? will you even be able to afford the payments? there's not enough detail here except to say that all purchases aside from true needs have a cost/reward to consider. whatever the car's total cost is, will it add that much pleasure to your life? people in cities with great transportation save quite a bit on the expenses a car brings. personal anecdote - mom lives in a city. she never drives out of the city. ever. between insurance, maintenance, and gas, even with low miles, she spends $3000/yr. once per week, she drives 1500 ft (.3mi) each way to the grocery store. once every month or 2 to a mall 6 miles away. she can walk and groceries delivered for free. in the end, she spends $250/mo for the feeling of freedom. i get that. when i am 70+, as she is, i will gladly pay car service the $20 to drive me around. you are young, and need to sit with your partner (your wife is your partner in the business of running the family finances, or so i hope) and decide if the benefit is worth the cost. how does she take the kids to a doctor? how do you go out to dinner?", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "oversimplify it for me: the correct order of investing", "role": "user" }, { "content": "great questions -- the fact that you're thinking about it is what's most important. i think a priority should be maximizing any employer match in your 401(k) because it's free money. second would be paying off high interest debt because it's a big expense. everything else is a matter of setting good financial habits so i think the order of importance will vary from person to person. (that's why i ordered the priorities the way i did: employer matching is the easiest way to get more income with no additional work, and paying down high-interest debt is the best way to lower your long-term expenses.) after that, continue to maximize your income and savings, and be frugal with your expenses. avoid debt. take a vacation once in a while, too!", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "how much is university projected to cost in canada in 18 years?", "role": "user" }, { "content": "i personally do not buy any those so-call forecasts - look no further than the economic forecasts by those experts with phds over the last decade or so. truth is there are too many factors that affects the tuition fees that far down the road (think inflation, cost of living, the method for which the education is being delivered, anticipated salary for the teachers, the ratio of schools and students, your children's ability to obtain scholarship money, and etc). put in what you can afford for resp - i put in $2000 annually per child to take maximum advantage of the 20% government matching. and be prepare to augment that with additional fund in 18 years. i am prepared to take on significant loans if my children both decided and qualified for graduated studies in specialized fields in a prestige universities - i have had met people with graduate degrees from harvard and cambridge and the obscure sum they (or their parents) paid on tuition are about as good investment as i have ever seen. education is one of the best gifts any parent could give to their child.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why does it take two weeks (from ex-date) for dividends to pay out?", "role": "user" }, { "content": "why does it take two weeks (from ex-date) for dividends to pay out? for logistical and accounting purposes. this article says on the payment date: this date is generally a week or more after the date of record so that the company has sufficient time to ensure that it accurately pays all those who are entitled. it is for the same reasons that there is a often a two-week period between the time an employee submits her time sheet and the employee's pay date. the company needs time to set and send the payment while minimizing accounting errors.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "high-risk investing is better for the young? why?", "role": "user" }, { "content": "if you spent your whole life earning the same portfolio that amounts $20,000, the variance and volatility of watching your life savings drop to $10,000 overnight has a greater consequence than for someone who is young. this is why riskier portfolios aren't advised for older people closer to or within retirement age, the obvious complementary group being younger people who could lose more with lesser permanent consequence. your high risk investment choices have nothing to do with your ability to manage other people's money, unless you fail to make a noteworthy investment return, then your high risk approach will be the death knell to your fund managing aspirations.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "if the put is more expensive than the call, what does it mean", "role": "user" }, { "content": "what it means is that the stock has already moved down. options and other derivatives follow the price of the underlying they are not a precursor to what the underlying is going to do. in other words, the price of a derivative is derived from the underlying.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "does a withdrawal of $10000 for 1st home purchase count against roth ira basis?", "role": "user" }, { "content": "from schwab with a roth, withdrawals of contributions are always tax-free because you've already paid income taxes on that money. so are withdrawals of earnings of up to $10,000 under the homebuyer exemption, assuming you've had the roth for five-plus years. but if you withdraw more than $10,000 in earnings, that money will be subject to both ordinary income taxes and the 10 percent penalty.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "can signing up at optoutprescreen.com improve my credit score?", "role": "user" }, { "content": "some credit checks are ignored as part of the scoring process. some companies will pull your info, to make sure you haven't become a risk. others will inquire before they send you an offer. since you didn't initiate the inquiry it can't impact your score.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what are the procedures or forms for a private loan with the sale of a vehicle?", "role": "user" }, { "content": "draft up a promissory notes. have a lawyer do it use one of those online contract places if you have simple needs. your promissory note need to cover be specific. there are probably a lot more items that can be included, and if a quick internet search is any indication it gets deep fast. http://lmbtfy.com/?q=car+sale+promissory+note (like @littleadv says) head to your dmv with the title and the promissory note. the title is signed over to you and held by the dmv. when you pay up, the seller informs the dmv and they send you the title. if you don't pay up, the seller can legally repossess the car. all butts are covered. pay the note as agreed. when you are all paid up, your friend notifies the dmv who then mail you the title. your butt is covered because your name is on the car, you can insure it and nobody can take it from you (legally) if you are paying the note as agreed. your pal's butt is covered because if you stop paying half way through, he can keep whatever you have paid him and get his car back.", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "why buy bonds in a no-arbitrage market?", "role": "user" }, { "content": "for safety. if something catastrophic happens to your bank and your money is in there you will lose any not covered by fdic. so if you have a very large amount of money you will store it in bonds as its much less likely that the us treasury will go bankrupt than your bank. i also literally just posted this in another thread: certain rules and regulations penalize companies or institutions for holding cash, so they are shifting to bonds and bills. fidelity, for example, is completely converting its $100 billion dollar cash fund to short term bills. its estimated that over $2 trillion that is now in cash may be converted to bills, and that will obviously put upward preasure on the price of them. the treasury is trying to issue more short term debt to balance out the demand. read more here: http://www.wsj.com/articles/money-funds-clamor-for-short-term-treasurys-1445300813", "role": "assistant" } ]

[ { "content": "as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.", "role": "system" }, { "content": "what is the name of inverse of synergy? (finance)", "role": "user" }, { "content": "you could call it \"multiple streams of income\" a la robert allen and others. or you could call it \"do once, sell many\" or something like that.", "role": "assistant" } ]