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42e1f36525dfe18292b8aa9169f0be9e
|
How can I invest in gold without taking physical possession?
|
[
{
"docid": "fd76bf49f90e365dbefa44a87fbeae98",
"text": "You could buy shares of an Exchange-Traded Fund (ETF) based on the price of gold, like GLD, IAU, or SGOL. You can invest in this fund through almost any brokerage firm, e.g. Fidelity, Etrade, Scotttrade, TD Ameritrade, Charles Schwab, ShareBuilder, etc. Keep in mind that you'll still have to pay a commission and fees when purchasing an ETF, but it will almost certainly be less than paying the markup or storage fees of buying the physical commodity directly. An ETF trades exactly like a stock, on an exchange, with a ticker symbol as noted above. The commission will apply the same as any stock trade, and the price will reflect some fraction of an ounce of gold, for the GLD, it started as .1oz, but fees have been applied over the years, so it's a bit less. You could also invest in PHYS, which is a closed-end mutual fund that allows investors to trade their shares for 400-ounce gold bars. However, because the fund is closed-end, it may trade at a significant premium or discount compared to the actual price of gold for supply and demand reasons. Also, keep in mind that investing in gold will never be the same as depositing your money in the bank. In the United States, money stored in a bank is FDIC-insured up to $250,000, and there are several banks or financial institutions that deposit money in multiple banks to double or triple the effective insurance limit (Fidelity has an account like this, for example). If you invest in gold and the price plunges, you're left with the fair market value of that gold, not your original deposit. Yes, you're hoping the price of your gold investment will increase to at least match inflation, but you're hoping, i.e. speculating, which isn't the same as depositing your money in an insured bank account. If you want to speculate and invest in something with the hope of outpacing inflation, you're likely better off investing in a low-cost index fund of inflation-protected securities (or the S&P500, over the long term) rather than gold. Just to be clear, I'm using the laymen's definition of a speculator, which is someone who engages in risky financial transactions in an attempt to profit from short or medium term fluctuations This is similar to the definition used in some markets, e.g. futures, but in many cases, economists and places like the CFTC define speculators as anyone who doesn't have a position in the underlying security. For example, a farmer selling corn futures is a hedger, while the trading firm purchasing the contracts is a speculator. The trading firm doesn't necessarily have to be actively trading the contract in the short-run; they merely have no position in the underlying commodity.",
"title": ""
},
{
"docid": "f87e691cf0d2cbc4dbe43f3e6a856f8b",
"text": "\"In addition to the possibility of buying gold ETFs or tradable certificates, there are also firms specializing in providing \"\"bank accounts\"\" of sorts which are denominated in units of weight of precious metal. While these usually charge some fees, they do meet your criteria of being able to buy and sell precious metals without needing to store them yourself; also, these fees are likely lower than similar storage arranged by yourself. Depending on the specifics, they may also make buying small amounts practical (buying small amounts of physical precious metals usually comes with a large mark-up over the spot price, sometimes to the tune of a 50% or so immediate loss if you buy and then immediately sell). Do note that, as pointed out by John Bensin, buying gold gets you an amount of metal, the local currency value of which will vary over time, sometimes wildly, so it is not the same thing as depositing the original amount of money in a bank account. Since 2006, the price of an ounce (about 31.1 grams) of gold has gone from under $500 US to over $1800 US to under $1100 US. Few other investment classes are anywhere near this volatile. If you are interested in this type of service, you might want to check out BitGold (not the same thing at all as Bitcoin) or GoldMoney. (I am not affiliated with either.) Make sure to do your research thoroughly as these may or may not be covered by the same regulations as regular banks, particularly if you choose a company based outside of or a storage location outside of your own country.\"",
"title": ""
}
] |
[
{
"docid": "08cec8c13d6cc51c6f85f6b481c17691",
"text": "Owning physical gold (assuming coins): Owning gold through a fund:",
"title": ""
},
{
"docid": "e99561df31a588a4c5bc1887c090010d",
"text": "\"Invest in gold. Maybe will not \"\"make\"\" money but at least preserve the value.\"",
"title": ""
},
{
"docid": "bad177efac3dfd6b41b35d802005ab10",
"text": "Without getting into whether you should invest in Gold or Not ... 1.Where do I go and make this purchase. I would like to get the best possible price. If you are talking about Physical Gold then Banks, Leading Jewelry store in your city. Other options are buying Gold Mutual Fund or ETF from leading fund houses. 2.How do I assure myself of quality. Is there some certificate of quality/purity? This is mostly on trust. Generally Banks and leading Jewelry stores will not sell of inferior purity. There are certain branded stores that give you certificate of authenticity 3.When I do choose to sell this commodity, when and where will I get the best cost? If you are talking about selling physical gold, Jewelry store is the only place. Banks do not buy back the gold they sold you. Jewelry stores will buy back any gold, however note there is a buy price and sell price. So if you buy 10 g and sell it back immediately you will not get the same price. If you have purchased Mutual Funds / ETF you can sell in the market.",
"title": ""
},
{
"docid": "5affdedc6246219e3093477fd999126e",
"text": "Reddit doesn't have a ton of resources to offer you as you learn about where to invest, you want to start reading up on actual investing sites. You might start with Motley Fool, StockTwits, Seeking Alpha, Marketwatch, etc. I agree with hipster's take, if all countries are going to keep printing money and expanding their debts and craziness, gold has a bright future. Land, petroleum, commodities, and precious metals have an intrinsic worth that will still be there regardless of what currencies are doing, versus bonds which are merely promises to pay, which will be paid off in devalued money, or stocks which are just promises of future earnings. Think about spreading your risk in a few different places, one chunk here, one chunk there. Some people in the US now are big on dividend paying stocks in lieu of bonds which only pay a percent, which is negative return after inflation. Some people buy 'royalty trust' units, which throw off income from oil leases as dividends. You might want to park a portion in a different currency, but dollar funds aren't going to pay interest and Switzerland plans to keep devaluing its currency as people keep bidding the price up. I don't know if you are allowed to buy CEF, a bullion-backed fund out of Canada in your country, but that's one way to own gold & silver. But with the instability out there, you might prefer a bit of the real thing stashed in a safe place. Or if you have a bit of family land, maybe just be sure you can pay the taxes to keep it; or pursue any other way to own 'real stuff' that will still be worth something after all hell breaks loose.",
"title": ""
},
{
"docid": "51f09d8025fb86f43c74dfdb82941039",
"text": "\"Two points: One, yes -- the price of gold has been going up. [gold ETF chart here](http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1349467200000&chddm=495788&chls=IntervalBasedLine&q=NYSEARCA:IAU&ntsp=0&ei=PQhvUMjiAZGQ0QG5pQE) Two, the US has confiscated gold in the past. They did it in the 1930s. Owning antique gold coins is stupid because you're paying for gold + the supply / demand imbalance forced upon that particular coin by the coin collector market. If you want to have exposure to gold in your portfolio, the cheapest way is through an ETF. If you want to own physical gold because a) it's shiny or b) you fear impending economic collapse -- you're probably better off with bullion from a reputable dealer. You can buy it in grams or ounces -- you can also buy it in coins. Physical gold will generally cost you a little more than the spot price (think 5% - 10%? -- not really sure) but it can vary wildly. You might even be able to buy it for under the spot price if you find somebody that isn't very bright willing to sell. Buyer beware though -- there are lots of shady folks in the \"\"we buy gold\"\" market.\"",
"title": ""
},
{
"docid": "8c68426680872d7e198afdc2edd7f1fd",
"text": "Best way would probably be to go buy gold or some other liquid item and then just sell it back for cash. Or buy items from stores and return them. Most stores that don't give store credit will give cash or put it on your CC.",
"title": ""
},
{
"docid": "8cc918d7d360e8385f3ff962b9230f3a",
"text": "\"The difficulty with investing in mining and gold company stocks is that they are subject to the same market forces as any other stocks, although they may whether those forces better in a crisis than other stocks do because they are related to gold, which has always been a \"\"flight to safety\"\" move for investors. Some investors buy physical gold, although you don't have to take actual delivery of the metal itself. You can leave it with the broker-dealer you buy it from, much the way you don't have your broker send you stock certificates. That way, if you leave the gold with the broker-dealer (someone reputable, of course, like APMEX or Monex) then you can sell it quickly if you choose, just like when you want to sell a stock. If you take delivery of a security (share certificate) or commodity (gold, oil, etc.) then before you can sell it, you have to return it to broker, which takes time. The decision has much to do with your investing objectives and willingness to absorb risk. The reason people choose mutual funds is because their money gets spread around a basket of stocks, so if one company in the fund takes a hit it doesn't wipe out their entire investment. If you buy gold, you run the risk (low, in my opinion) of seeing big losses if, for some reason, gold prices plummet. You're \"\"all in\"\" on one thing, which can be risky. It's a judgment call on your part, but that's my two cents' worth.\"",
"title": ""
},
{
"docid": "25a38b50c7fa018f6d9168ae1325fc2f",
"text": "\"Since you are going to be experiencing a liquidity crisis that even owning physical gold wouldn't solve, may I suggest bitcoins? You will still be liquid and people anywhere will be able to trade it. This is different from precious metals, whereas even if you \"\"invested\"\" in gold you would waste considerable resources on storage, security and actually making it divisible for trade. You would be illiquid. Do note that the bitcoin currency is currently more volatile than a Greek government bond.\"",
"title": ""
},
{
"docid": "bffeaf61787f6b4ab0868de12b79540f",
"text": "\"I got started by reading the following two books: You could probably get by with just the first of those two. I haven't been a big fan of the \"\"for dummies\"\" series in the past, but I found both of these were quite good, particularly for people who have little understanding of investing. I also rather like the site, Canadian Couch Potato. That has a wealth of information on passive investing using mutual funds and ETFs. It's a good next step after reading one or the other of the books above. In your specific case, you are investing for the fairly short term and your tolerance for risk seems to be quite low. Gold is a high-risk investment, and in my opinion is ill-suited to your investment goals. I'd say you are looking at a money market account (very low risk, low return) such as e.g. the TD Canadian Money Market fund (TDB164). You may also want to take a look at e.g. the TD Canadian Bond Index (TDB909) which is only slightly higher risk. However, for someone just starting out and without a whack of knowledge, I rather like pointing people at the ING Direct Streetwise Funds. They offer three options, balancing risk vs reward. You can fill in their online fund selector and it'll point you in the right direction. You can pay less by buying individual stock and bond funds through your bank (following e.g. one of the Canadian Couch Potato's model portfolios), but ING Direct makes things nice and simple, and is a good option for people who don't care to spend a lot of time on this. Note that I am not a financial adviser, and I have only a limited understanding of your needs. You may want to consult one, though you'll want to be careful when doing so to avoid just talking to a salesperson. Also, note that I am biased toward passive index investing. Other people may recommend that you invest in gold or real estate or specific stocks. I think that's a bad idea and believe I have the science to back this up, but I may be wrong.\"",
"title": ""
},
{
"docid": "58449f8023032c3e88340a3a6ff677d6",
"text": "Redditors! Buy gold and demand that the financial institution who sold it deliver it. When they try to buy enough gold to cover their short the price will explode, free money. Disclaimer: you all have to do it or it won't work",
"title": ""
},
{
"docid": "0f09a405c8242b6ac42a50f5bbd2bd20",
"text": "\"Getting \"\"physical stocks\"\" will in most cases only be for the \"\"fun of it\"\". Most stocks nowadays are registered electronically and thus the physical stock will be of no value - it will just be a certificate saying that you own X amount of shares in company X; but this information is at the same time registered electronically. Stocks are not like bearer bonds, the certificate itself contains no value and is registered to each individual/entity. Because the paper itself is worthless, stealing it will not affect your amount of stock with the company. This is true for most stocks - there may exist companies who live in the 70s and do not keep track of their stock electronically, but I suspect it will only be very few (and most likely very small and illiquid companies).\"",
"title": ""
},
{
"docid": "250e59e43c4663a659e26028f92aa583",
"text": "I would track it using a regular asset account. The same way I would track the value of a house, a car, or any other personal asset. ETA: If you want automatic tracking, you could set it up as a stock portfolio holding shares of the GLD ETF. One share of GLD represents 1/10 ounce of gold. So, if you have 5 ounces of gold, you would set that up in Quicken as 50 shares of GLD.",
"title": ""
},
{
"docid": "e26623e08553c09696cac38fbef44909",
"text": "gold is incredibly volatile, I tried spreadbetting on it. During the month of its highest gain, month beginning to month end, I was betting it would go up - and I still managed to lose money. It went down so much, that my stop loss margin would kick in. Don't do things with gold in the short term its a very small and liquid market. My advice with gold, actually buy some physical gold as insurance.",
"title": ""
},
{
"docid": "726992b37e38e2c0e01dabc5117201c3",
"text": "\"GLD, IAU, and SGOL are three different ETF's that you can invest in if you want to invest in gold without physically owning gold. Purchasing an ETF is just like purchasing a stock, so you're fine on that front. Another alternative is to buy shares of companies that mine gold. An example of a single company is Randgold Resources (GOLD), and an ETF of mining companies is GDX. There are also some more complex alternatives like Exchange traded notes and futures contracts, but I wouldn't classify those for the \"\"regular person.\"\" Hope it helps!\"",
"title": ""
},
{
"docid": "f942f83af50827f1778ff784b6e6f832",
"text": "You can also use ICS<GO> on Bloomberg and choose the right category (many subcategories, probably you'll start on home builders or something like that). If that doesn't work, press F1 twice and ask it to an analyst. I'm sure they have this info.",
"title": ""
}
] |
fiqa
|
a916e142174814900bfdaf517a7e28bc
|
Diversify across multiple brokers?
|
[
{
"docid": "cd64e0364d2155994fb14edafa14b040",
"text": "You should ensure that your broker is a member of the Securities Investor Protection Corporation (SIPC). SIPC protects the cash and securities in your brokerage account much like the Federal Deposit Insurance Corporation (FDIC) protects bank deposits. Securities are protected with a limit of $500,000 USD. Cash is protected with a limit of $250,000 USD. It should be noted that SIPC does not protect investors against loss of value or bad advice. As far as having multiple brokerage accounts for security, I personally don’t think it’s necessary to have multiple accounts for that reason. Depending on account or transaction fees, it might not hurt to have multiple accounts. It can actually be beneficial to have multiple accounts so long as each account serves a purpose in your overall financial plan. For example, I have three brokerage accounts, each of which serves a specific purpose. One provides low cost stock and bond transactions, another provides superior market data, and the third provides low cost mutual fund transactions. If you’re worried about asset security, there are a few things you can do to protect yourself. I would recommend you begin by consulting a qualified financial advisor about your risk profile. You stated that a considerable portion of your total assets are in securities. Depending on your risk profile and the amount of your net worth held in securities, you might be better served by moving your money into lower risk asset classes. I’m not an attorney or a financial advisor. This is not legal advice or financial advice. You can and should consult your own attorney and financial advisor.",
"title": ""
}
] |
[
{
"docid": "fda874738f68f83b73d40aa1db1d01f1",
"text": "You're missing the concept of systemic risk, which is the risk of the entire market or an entire asset class. Diversification is about achieving a balance between risk and return that's appropriate for you. Your investment in Vanguard's fund, although diversified between many public companies, is still restricted to one asset class in one country. Yes, you lower your risk by investing in all of these companies, but you don't erase it entirely. Clearly, there is still risk, despite your diversification. You may decide that you want other investments or a different asset allocation that reduce the overall risk of your portfolio. Over the long run, you may earn a high level of return, but never forget that there is still risk involved. bonds seem pretty worthless, at least until I retire According to your profile, you're about my age. Our cohort will probably begin retiring sometime around 2050 or later, and no one knows what the bond market will look like over the next 40 years. We may have forecasts for the next few years, but not for almost four decades. Writing off an entire asset class for almost four decades doesn't seem like a good idea. Also, bonds are like equity, and all other asset classes, in that there are different levels of risk within the asset class too. When calculating the overall risk/return profile of my portfolio, I certainly don't consider Treasuries as the same risk level as corporate bonds or high-yield (or junk) bonds from abroad. Depending on your risk preferences, you may find that an asset allocation that includes US and/or international bonds/fixed-income, international equities, real-estate, and cash (to make rebalancing your asset allocation easier) reduces your risk to levels you're willing to tolerate, while still allowing you to achieve returns during periods where one asset class, e.g. equities, is losing value or performing below your expectations.",
"title": ""
},
{
"docid": "39039f0f18b9a5f0ebc766f87a502934",
"text": "In the past 10 years there have been mutual funds that would act as a single bucket of stocks and bonds. A good example is Fidelity's Four In One. The trade off was a management fee for the fund in exchange for having to manage the portfolio itself and pay separate commissions and fees. These days though it is very simple and pretty cheap to put together a basket of 5-6 ETFs that would represent a balanced portfolio. Whats even more interesting is that large online brokerage houses are starting to offer commission free trading of a number of ETFs, as long as they are not day traded and are held for a period similar to NTF mutual funds. I think you could easily put together a basket of 5-6 ETFs to trade on Fidelity or TD Ameritrade commission free, and one that would represent a nice diversified portfolio. The main advantage is that you are not giving money to the fund manager but rather paying the minimal cost of investing in an index ETF. Overall this can save you an extra .5-1% annually on your portfolio, just in fees. Here are links to commission free ETF trading on Fidelity and TD Ameritrade.",
"title": ""
},
{
"docid": "600627b380e6ff8992b9348e5bac161f",
"text": "There's some risk, but it's quite small: The only catastrophic case I can think of is if the brokerage firm defrauded you about purchasing the assets in the first place; e.g., when you ostensibly put money into a mutual fund, they just pocketed it and displayed a fictitious purchase on their web site. In that case, you'd have no real asset to legally recover. I think the more realistic risks you should be concerned with are: The only major brokerage firm that I'm aware of that accepts liability for theft is Charles Schwab: http://www.schwab.com/public/schwab/nn/legal_compliance/schwabsafe/security_guarantee.html If you're going to diversify for security reasons, be sure to use different passwords, email addresses, and secret question answers on the two accounts.",
"title": ""
},
{
"docid": "f58997ea3544dbb5a29b25a20146ee45",
"text": "Depends on the fund. If it's a Target Date fund, which is inherently diversified, this comes down to how much you trust the investment house to not go belly-up. If it's another kind of fund, you need to manage your own duversification and occasional rebalancing. Most of my money is in index funds (details elsewhere), but that's five or six very different indexes to cover the investment space with the mix of investment types I've selected. And most of it is in a single family of funds, which might be argued to be higher risk than desirable but which has been convenient.",
"title": ""
},
{
"docid": "817db6a727dc0ed4825fbb46bf03671e",
"text": "In a word, no. Diversification is the first rule of investing. Your plan has poor diversification because it ignores most of the economy (large cap stocks). This means for the expected return your portfolio would get, you would bear an unnecessarily large amount of risk. Large cap and small cap stocks take turns outperforming each other. If you hold both, you have a safer portfolio because one will perform well while the other performs poorly. You will also likely want some exposure to the bond market. A simple and diversified portfolio would be a total market index fund and a total bond market fund. Something like 60% in the equity and 40% in the bonds would be reasonable. You may also want international exposure and maybe exposure to real estate via a REIT fund. You have expressed some risk-aversion in your post. The way to handle that is to take some of your money and keep it in your cash account and the rest into the diversified portfolio. Remember, when people add more and more asset classes (large cap, international, bonds, etc.) they are not increasing the risk of their portfolio, they are reducing it via diversification. The way to reduce it even more (after you have diversified) is to keep a larger proportion of it in a savings account or other guaranteed investment. BTW, your P2P lender investment seems like a great idea to me, but 60% of your money in it sounds like a lot.",
"title": ""
},
{
"docid": "12cf46e5aa8dc153b2ce8e72f94d8999",
"text": "Diversified is relative. Alfred has all his money in Apple. He's done very well over the last 10 years, but I think most investors would say that he's taking an incredible risk by putting everything on one stock. Betty has stock in Apple, Microsoft, and Google. Compared to Alfred, she is diversified. Charlie looks at Betty and realizes that she is only investing in one particular industry. All the companies in an individual industry can have a downturn together, so he invests everything in an S&P 500 index fund. David looks at Charlie and notes that he's got everything in large, high-capitalization companies. Small-cap stocks are often where the growth happens, so he invests in a total stock market fund. Evelyn realizes that David has all his money tied up in one country, the United States. What about the rest of the world? She invests in a global fund. Frank really likes Evelyn's broad approach to equities, but he knows that some portion of fixed-income assets (e.g. cash deposits, bonds) can reduce portfolio volatility—and may even enhance returns through periodic rebalancing. He does what Evelyn does, but also allocates some percentage of his portfolio to fixed income, and intends to maintain his target allocations. Being diversified enough depends on your individual goals and investing philosophy. There are some who would say that it is wrong to put all of your money in one fund, no matter what it is. Others would say that a sufficiently broad index fund is inherently diversified as-is.",
"title": ""
},
{
"docid": "b1706d4b8a932bdbaf455068acf63dfa",
"text": "I've been a retail trader for close to 7 years and while I have a specialized futures account, I use Interactive Brokers for my other trading. They charge per share or contract rather than per trade (good for smaller accounts or if you want to piece into and out of positions). You can also trade just about anything. Futures, options, options on futures, individual stocks, ETFs, Bonds (futures), currencies. The interface is pretty good as well. I have seperate charts (eSignal) so I'm not sure how good their charting is",
"title": ""
},
{
"docid": "bfe08dfc688e3e87e95667f68f4eb311",
"text": "\"Diversification is extremely important and the one true \"\"Free Lunch\"\" of investing, meaning it can provide both greater returns and less risk than a portfolio that is not diversified. The reason people say otherwise is because they are talking about \"\"true\"\" portfolio diversification, which cannot be achieved by simply spreading money across stocks. To truly diversify a portfolio it must be diversified across multiple, unrelated \"\"Return Drivers.\"\" I describe this throughout my best-selling book and am pleased to provide complimentary links to the following two chapters, where I discuss the lack of diversification from spreading money solely across stocks (including correlation tables), as well as the benefits of true portfolio diversification: Jackass Investing - Myth #8: Trading is Gambling – Investing is Safer Jackass Investing - Myth #20: There is No Free Lunch\"",
"title": ""
},
{
"docid": "00fdc8a7e86e2d30d633cd91f6f28d61",
"text": "Yes, the larger number of ETFs will have a greater chance of enhancing the effect you observe. It's beyond a simple discussion, but the bottom line is that by carving out the different market segments your rebalancing will have greater impact.",
"title": ""
},
{
"docid": "1e4aaf1697caa668813199234ae82966",
"text": "Why not figure out the % composition of the index and invest in the participating securities directly? This isn't really practical. Two indices I use follow the Russell 2000 and the S&P 500 Those two indices represent 2500 stocks. A $4 brokerage commission per trade would mean that it would cost me $10,000 in transaction fees to buy a position in 2500 stocks. Not to mention, I don't want to track 2500 investments. Index funds provide inexpensive diversity.",
"title": ""
},
{
"docid": "5ec6f6d74a9946f9c7b7f8f7132d8642",
"text": "I guess I wasn't clear. I want to modestly leverage (3-4x) my portfolio using options. I believe long deep-in-the-money calls would be the best way to do this? (Let me know if not.) It's important to me that the covariance matrix from the equity portfolio scales up but doesn't fundamentally change. (I liken it to systemic change as opposed to idiosyncratic change.) This is what I was thinking: * For the same expiry date, find each positions lowest lambda. * Match all option to the the highest of the lowest lambda. * Adjust number of contracts to compensate for higher leverage. I don't think this will work because if I matched the lowest lambda of options on bond etfs to my equity options they would be out-of-the-money. By the way, thanks for your time.",
"title": ""
},
{
"docid": "ea037e297eea30bc449f3febfb1d4090",
"text": "\"When you have multiple assets available and a risk-free asset (cash or borrowing) you will always end up blending them if you have a reasonable objective function. However, you seem to have constrained yourself to 100% investment. Combine that with the fact that you are considering only two assets and you can easily have a solution where only one asset is desired in the portfolio. The fact that you describe the US fund as \"\"dominating\"\" the forign fund indicates that this may be the case for you. Ordinarily diversification benefits the overall portfolio even if one asset \"\"dominates\"\" another but it may not in your special case. Notice that these funds are both already highly diversified, so all you are getting is cross-border diversification by getting more than one. That may be why you are getting the solution you are. I've seen a lot of suggested allocations that have weights similar to what you are using. Finding an optimal portfolio given a vector of expected returns and a covariance matrix is very easy, with some reliable results. Fancy models get pretty much the same kinds of answers as simple ones. However, getting a good covariance matrix is hard and getting a good expected return vector is all but impossible. Unfortunately portfolio results are very sensitive to these inputs. For that reason, most of us use portfolio theory to guide our intuition, but seldom do the math for our own portfolio. In any model you use, your weak link is the expected return and covariance. More sophisticated models don't usually help produce a more reasonable result. For that reason, your original strategy (80-20) sounds pretty good to me. Not sure why you are not diversifying outside of equities, but I suppose you have your reasons.\"",
"title": ""
},
{
"docid": "a2c9291b466f20b6130ad21913668ec2",
"text": "Each S-corp is bound by its own plan documents, which typically do not limit or dictate where the investments are held. Your brokerage account has no tie to the company from which the funds come, however, you are still subject to maximum SIMPLE contribution rules and cannot exceed the $12,500 (if under age 50) COMBINED contribution for any and all companies. Be careful about co-mingling from both companies as there are penalties for early withdrawals made within 2-years of participating in the plan. If you started them both at the same time it's not an issue.",
"title": ""
},
{
"docid": "baeda48ad38b88a95a6cbfd626419096",
"text": "I've looked into Thinkorswim; my father uses it. Although better than eTrade, it wasn't quite what I was looking for. Interactive Brokers is a name I had heard a long time ago but forgotten. Thank you for that, it seems to be just what I need.",
"title": ""
},
{
"docid": "96d0479db259b1d1bbc57b467acf8cf2",
"text": "\"If you read Joel Greenblatt's The Little Book That Beats the Market, he says: Owning two stocks eliminates 46% of the non market risk of owning just one stock. This risk is reduced by 72% with 4 stocks, by 81% with 8 stocks, by 93% with 16 stocks, by 96% with 32 stocks, and by 99% with 500 stocks. Conclusion: After purchasing 6-8 stocks, benefits of adding stocks to decrease risk are small. Overall market risk won't be eliminated merely by adding more stocks. And that's just specific stocks. So you're very right that allocating a 1% share to a specific type of fund is not going to offset your other funds by much. You are correct that you can emulate the lifecycle fund by simply buying all the underlying funds, but there are two caveats: Generally, these funds are supposed to be cheaper than buying the separate funds individually. Check over your math and make sure everything is in order. Call the fund manager and tell him about your findings and see what they have to say. If you are going to emulate the lifecycle fund, be sure to stay on top of rebalancing. One advantage of buying the actual fund is that the portfolio distributions are managed for you, so if you're going to buy separate ETFs, make sure you're rebalancing. As for whether you need all those funds, my answer is a definite no. Consider Mark Cuban's blog post Wall Street's new lie to Main Street - Asset Allocation. Although there are some highly questionable points in the article, one portion is indisputably clear: Let me translate this all for you. “I want you to invest 5pct in cash and the rest in 10 different funds about which you know absolutely nothing. I want you to make this investment knowing that even if there were 128 hours in a day and you had a year long vacation, you could not possibly begin to understand all of these products. In fact, I don’t understand them either, but because I know it sounds good and everyone is making the same kind of recommendations, we all can pretend we are smart and going to make a lot of money. Until we don’t\"\" Standard theory says that you want to invest in low-cost funds (like those provided by Vanguard), and you want to have enough variety to protect against risk. Although I can't give a specific allocation recommendation because I don't know your personal circumstances, you should ideally have some in US Equities, US Fixed Income, International Equities, Commodities, of varying sizes to have adequate diversification \"\"as defined by theory.\"\" You can either do your own research to establish a distribution, or speak to an investment advisor to get help on what your target allocation should be.\"",
"title": ""
}
] |
fiqa
|
3a49373943e9bb033aea0b5697d8cdab
|
What is a rule of thumb for accruing debt on a rental property?
|
[
{
"docid": "8458e6ebcc66911b291d37d15bc50a86",
"text": "To start, I hope you are aware that the properties' basis gets stepped up to market value on inheritance. The new basis is the start for the depreciation that must be applied each year after being placed in service as rental units. This is not optional. Upon selling the units, depreciation is recaptured whether it's taken each year or not. There is no rule of thumb for such matters. Some owners would simply collect the rent, keep a reserve for expenses or empty units, and pocket the difference. Others would refinance to take cash out and leverage to buy more property. The banker is not your friend, by the way. He is a salesman looking to get his cut. The market has had a good recent run, doubling from its lows. Right now, I'm not rushing to prepay my 3.5% mortgage sooner than it's due, nor am I looking to pull out $500K to throw into the market. Your proposal may very well work if the market sees a return higher than the mortgage rate. On the flip side I'm compelled to ask - if the market drops 40% right after you buy in, will you lose sleep? And a fellow poster (@littleadv) is whispering to me - ask a pro if the tax on a rental mortgage is still deductible when used for other purposes, e.g. a stock purchase unrelated to the properties. Last, there are those who suggest that if you want to keep investing in real estate, leverage is fine as long as the numbers work. From the scenario you described, you plan to leverage into an already pretty high (in terms of PE10) and simply magnifying your risk.",
"title": ""
}
] |
[
{
"docid": "ec9961d911a037f952f77576264d16a0",
"text": "The idea you present is not uncommon, many have tried it before. It would be a great step to find landlords in your area and talk to them about lessons learned. It might cost you a lunch or cup of coffee but it could be the best investment you make. rent it out for a small profit (hopefully make around 3 - 5k a year in profit) Given the median price of a home is ~220K, and you are investing 44K, you are looking to make between a 6 and 11% profit. I would not classify this as small in the current interest rate environment. One aspect you are overlooking is risk. What happens if a furnace breaks, or someone does not pay their rent? While some may advocate borrowing money to buy rental real estate all reasonable advisers advocate having sufficient reserves to cover emergencies. Keep in mind that 33% of homes in the US do not have a mortgage and some investment experts advocate only buying rentals with cash. Currently owning rental property is a really good deal for the owners for a variety of reasons. Markets are cyclical and I bet things will not be as attractive in 10 years or so. Keep in mind you are borrowing ~220K or whatever you intend to pay. You are on the hook for that. A bank may not lend you the money, and even if they do a couple of false steps could leave you in a deep hole. That should at least give you pause. All that being said, I really like your gumption. I like your desire and perhaps you should set a goal of owning your first rental property for 5 years from now. In the mean time study and become educated in the business. Perhaps get your real estate license. Perhaps go to work for a property management company to learn the ins and outs of their business. I would do this even if I had a better paying full time job.",
"title": ""
},
{
"docid": "d8b7786c9df393ebf88eb4238d98e569",
"text": "\"For US punters, the Centre for Economic and Policy Research has a Housing Cost Calculator you can play with. The BBC provides this one for the UK. For everyone else, there are a few rules of thumb (use with discretion and only as a ball-park guide): Your example of a Gross Rental Yield of 5% would have to be weighed up against local investment returns. Read Wikipedia's comprehensive \"\"Real-estate bubble\"\" article. Update: spotted that Fennec included this link at the NY Times which contains a Buy or Rent Calculator.\"",
"title": ""
},
{
"docid": "2f433e95de68c23d93cf4fae5295ecc2",
"text": "You will need to look at the 27.5 year depreciation table from the IRS. It tells you how you will be able to write off the first year. It depends on which month you had the unit ready to rent. Note that that it might be a different month from when you moved, or when the first tenant moved in. Your list is pretty good. You can also claim some travel expenses or mileage related to the unit. Also keep track of any other expenses such as switching the water bill to the new renter, or postage. If you use Turbo tax, not the least expensive version, it can be a big help to get started and to remember how much to depreciate each year.",
"title": ""
},
{
"docid": "75afbb044a044305e7c497e1093aa9a4",
"text": "In order to arrive at a decision you need the numbers: I suggest a spreadsheet. List the monthly and annual costs (see other responses). Then determine what the market rate for rental. Once you have the numbers it will be clear from a numbers standpoint. One has consider the hassle of owning property from a distance, which is not factored into the spreadsheet",
"title": ""
},
{
"docid": "2ff18fce91f9e00ae614b18af671a83a",
"text": "More possible considerations: Comparability with other properties. Maybe properties that rent for $972 have more amenities than this one (parking, laundry, yard, etc) or are in better repair. Or maybe the $972 property is a block closer to campus and thus commands 30% higher rent (that can happen). Condition of property. You know nothing about this until you see it. It could be in such bad shape that you can't legally rent it until you spend a lot of money fixing it. Or it may just be run down or outdated: still inhabitable but not as attractive to renters, leading to lower rent and/or longer vacancy periods. Do you accept that, or spend a lot of money to renovate? Collecting the rent. Tenants don't necessarily always pay their rent on time, or at all. If a tenant quits paying, you incur significant expenses to evict them and then find a new tenant, and all the while, you collect no rent. There could be a tenant in place paying a much lower rent. Rent control or a long lease may prevent you from raising it. If you are able to raise it, and the tenant doesn't want to pay, see above. Maintenance and more maintenance. College students could be hard on the property; one good kegger could easily cause more damage than their security deposits will cover. Being near a university doesn't guarantee you an easy time renting it. It suggests the demand is high, but maybe the supply is even higher. Renting to college students has additional issues. They are less likely to have incomes large enough to satisfy you that they can pay the rent. Are you willing to deal with cosigners? If a student quits paying, are you willing to try to collect from their cosigning parents in another state? And you'll probably have many tenants (roommates) living in the house. They will come and go separately and unexpectedly, complicating your leasing arrangements. And you may well get drawn in to disputes between them.",
"title": ""
},
{
"docid": "a07291b4de8087c2421bb4e70ecf6573",
"text": "They will include the rental income into the calculation. They don't give you a 100% credit for the income because they have to factor that you might have a gap between tenants. Years ago they only credited me with 66% of the expected monthly income. Example: This expense was then supposed to come from the 10% of my income that was allocated for monthly non-principal mortgage loans, e.g student loan, auto loan, credit card debt...",
"title": ""
},
{
"docid": "5a1293a666b8079d199978def4663f03",
"text": "Getting the first year right for any rental property is key. It is even more complex when you rent a room, or rent via a service like AirBnB. Get professional tax advice. For you the IRS rules are covered in Tax Topic 415 Renting Residential and Vacation Property and IRS pub 527 Residential Rental Property There is a special rule if you use a dwelling unit as a personal residence and rent it for fewer than 15 days. In this case, do not report any of the rental income and do not deduct any expenses as rental expenses. If you reach that reporting threshold the IRS will now expect you to to have to report the income, and address the items such as depreciation. When you go to sell the house you will again have to address depreciation. All of this adds complexity to your tax situation. The best advice is to make sure that in a tax year you don't cross that threshold. When you have a house that is part personal residence, and part rental property some parts of the tax code become complex. You will have to divide all the expenses (mortgage, property tax, insurance) and split it between the two uses. You will also have to take that rental portion of the property and depreciation it. You will need to determine the value of the property before the split and then determine the value of the rental portion at the time of the split. From then on, you will follow the IRS regulations for depreciation of the rental portion until you either convert it back to non-rental or sell the property. When the property is sold the portion of the sales price will be associated with the rental property, and you will need to determine if the rental property is sold for a profit or a loss. You will also have to recapture the depreciation. It is possible that one portion of the property could show a loss, and the other part of the property a gain depending on house prices over the decades. You can expect that AirBnB will collect tax info and send it to the IRS As a US company, we’re required by US law to collect taxpayer information from hosts who appear to have US-sourced income. Virginia will piggyback onto the IRS rules. Local law must be researched because they may limit what type of rentals are allowed. Local law could be state, or county/city/town. Even zoning regulations could apply. Also check any documents from your Home Owners Association, they may address running a business or renting a property. You may need to adjust your insurance policy regarding having tenants. You may also want to look at insurance to protect you if a renter is injured.",
"title": ""
},
{
"docid": "d33cfed182d3f8615b0308ee695e4067",
"text": "As a landlord for 14 years with 10 properties, I can give a few pointers: be able and skilled enough to perform the majority of maintenance because this is your biggest expense otherwise. it will shock you how much maintenance rental units require. don't invest in real estate where the locality/state favors the tenant (e.g., New York City) in disputes. A great state is Florida where you can have someone evicted very quickly. require a minimum credit score of 620 for all tenants over 21. This seems to be the magic number that keeps most of the nightmare tenants out makes sure they have a job nearby that pays at least three times their annual rent every renewal, adjust your tenant's rent to be approximately 5% less than going rates in your area. Use Zillow as a guide. Keeping just below market rates keeps tenants from moving to cheaper options. do not rent to anyone under 30 and single. Trust me trust me trust me. you can't legally do this officially, but do it while offering another acceptable reason for rejection; there's always something you could say that's legitimate (bad credit, or chose another tenant, etc.) charge a 5% late fee starting 10 days after the rent is due. 20 days late, file for eviction to let the tenant know you mean business. Don't sink yourself too much in debt, put enough money down so that you start profitable. I made the mistake of burying myself and I haven't barely been able to breathe for the entire 14 years. It's just now finally coming into profitability. Don't get adjustable rate or balloon loans under any circumstances. Fixed 30 only. You can pay it down in 20 years and get the same benefits as if you got a fixed 20, but you will want the option of paying less some months so get the 30 and treat it like a 20. don't even try to find your own tenants. Use a realtor and take the 10% cost hit. They actually save you money because they can show your place to a lot more prospective tenants and it will be rented much sooner. Empty place = empty wallet. Also, block out the part of the realtor's agreement-to-lease where it states they keep getting the 10% every year thereafter. Most realtors will go along with this just to get the first year, but if they don't, find another realtor. buy all in the same community if you can, then you can use the same vendor list, the same lease agreement, the same realtor, the same documentation, spreadsheets, etc. Much much easier to have everything a clone. They say don't put all your eggs in one basket, but the reality is, running a bunch of properties is a lot of work, and the more similar they are, the more you can duplicate your work for free. That's worth a lot more day-to-day than the remote chance your entire community goes up in flames",
"title": ""
},
{
"docid": "9d9403bb9d1a39b292f8692b5bc67126",
"text": "\"Have you been rejected from a rental for a specific reason (leading to this question)? Landlords are in the business of exchanging space for regular payments with no drama. Anything they ask in an application should be something to minimize the risk of drama. The \"\"happy path\"\" optimistic goal is that you pay your rent by the due date every month. If your income is not sufficient for this, demonstrating you have assets and would be able to pay for the full term of the lease is part of the decision to enter into the lease with you. In the non-happy-path, say you fall off the face of the earth before ending the lease. The landlord could be owed several months of rent, and could pursue a legal judgment on your assets. With a court order, they can make the bank pay out what is owed; having bank information reduces the landlord's cost and research efforts in the event the story has degenerated to this point (in the jargon of landlording, this means the tenant is \"\"collectable\"\"). While of course you could have zeroed out your accounts or moved money to a bank you didn't tell the landlord in the meantime, if you are not the bad actor in this story, you probably wouldn't have. If you get any kind of \"\"spidey-sense\"\" about a landlord or property at all there is probably a better rental situation in your city. You also want to minimize drama. If the landlord is operating like a business, they're not in this to perform identity theft. If the landlord is sloppy, or has sloppy office workers, that would be different. In the event sharing your asset information truly bothers you, and the money is for rental expense anyway, you could offer to negotiate a 1 year prepaid rental (of course knock another 5%-10% off for time value of money and lower risk to landlord) if you're sure you wouldn't want to leave early.\"",
"title": ""
},
{
"docid": "b9b5799fc7da961ab2a1c9d6082c9be0",
"text": "\"Several, actually: Maintenance costs. As landlord, you are liable for maintaining the basic systems of the dwelling - structure, electrical, plumbing, HVAC. On top of that, you typically also have to maintain anything that comes with the space, so if you're including appliances like a W/D or fridge, if they crap out you could spend a months' rent or more replacing them. You are also required to keep the property up to city codes as far as groundskeeping unless you specifically assign those responsibilities to your tenant (and in some states you are not allowed to do so, and in many cases renters expect groundskeeping to come out of their rent one way or the other). Failure to do these things can put you in danger of giving your tenant a free out on the lease contract, and even expose you to civil and criminal penalties if you're running a real slum. Escrow payments. The combination of property tax and homeowner's insurance usually doubles the monthly housing payment over principal and interest, and that's if you got a mortgage for 20% down. Also, because this is not your primary residence, it's ineligible for Homestead Act exemptions (where available; states like Texas are considering extending Homestead exemptions to landlords, with the expectation it will trickle down to renters), however mortgage interest and state taxes do count as \"\"rental expenses\"\" and can be deducted on Schedule C as ordinary business expenses offsetting revenues. Income tax. The money you make in rent on this property is taxable as self-employment income tax; you're effectively running a sole proprietorship real-estate management company, so not only does any profit (you are allowed to deduct maintenance and administrative costs from the rent revenues) get added to whatever you make in salary at your day job, you're also liable for the full employee and employer portions of Medicare/Medicaid/SS taxes. You are, however, also allowed to depreciate the property over its expected life and deduct depreciation; the life of a house is pretty long, and if you depreciate more than the house's actual loss of value, you take a huge hit if/when you sell because any amount of the sale price above the depreciated price of the house is a capital gain (though, it can work to your advantage by depreciating the maximum allowable to reduce ordinary income, then paying lower capital gains rates on the sale). Legal costs. The rental agreement typically has to be drafted by a lawyer in order to avoid things that can cause the entire contract to be thrown out (though there are boilerplate contracts available from state landlords' associations). This will cost you a few hundred dollars up front and to update it every few years. It is deductible as an ordinary expense. Advertising. Putting up a \"\"For Rent\"\" sign out front is typically just the tip of the iceberg. Online and print ads, an ad agency, these things cost money. It's deductible as an ordinary expense. Add this all up and you may end up losing money in the first year you rent the property, when legal, advertising, initial maintenance/purchases to get the place tenant-ready, etc are first spent; deduct it properly and it'll save you some taxes, but you better have the nest egg to cover these things on top of everything your lender will expect you to bring to closing (assuming you don't have $100k+ lying around to buy the house in cash).\"",
"title": ""
},
{
"docid": "cc944b121bd06b9a75a12eae2177827d",
"text": "It actually depends on the services provided. If you're renting through AirBnB, you're likely to provide much more services to the tenants than a traditional rental. It may raise it to a level when it is no longer a passive activity. See here, for starters: Providing substantial services. If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. For information, see Publication 334, Tax Guide for Small Business. Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5",
"title": ""
},
{
"docid": "88d77a3dd754aefdfb72b4a009b8c5e4",
"text": "\"Started to post this as a comment, but I think it's actually a legitimate answer: Running a rental property is neither speculation nor investment, but a business, just as if you were renting cars or tools or anything else. That puts it in an entirely different category. The property may gain or lose value, but you don't know which or how much until you're ready to terminate the business... so, like your own house, it really isn't a liquid asset; it's closer to being inventory. Meanwhile, like inventory, you need to \"\"restock\"\" it on a fairly regular basis by maintaining it, finding tenants, and so on. And how much it returns depends strongly on how much effort you put into it in terms of selecting the right location and product in the first place, and in how you market yourself against all the other businesses offering near-equivalent product, and how you differentiate the product, and so on. I think approaching it from that angle -- deciding whether you really want to be a business owner or keep all your money in more abstract investments, then deciding what businesses are interesting to you and running the numbers to see what they're likely to return as income, THEN making up your mind whether real estate is the winner from that group -- is likely to produce better decisions. Among other things, it helps you remember to focus on ALL the costs of the business. When doing the math, don't forget that income from the business is taxed at income rates, not investment rates. And don't forget that you're making a bet on the future of that neighborhood as well as the future of that house; changes in demographics or housing stock or business climate could all affect what rents you can charge as well as the value of the property, and not necessarily in the same direction. It may absolutely be the right place to put some of your money. It may not. Explore all the possible outcomes before making the bet, and decide whether you're willing to do the work needed to influence which ones are more likely.\"",
"title": ""
},
{
"docid": "95256edb22555049c2e5d130e88e5287",
"text": "\"Get everything in writing. That includes ownership %, money in, money out, who is allowed to use the place, how much they need to pay the other partners, who pays for repairs, whether to provide 'friends and family' discounts, who is allowed to sell, what happens if someone dies, how is the mortgage set up, what to do if one of you becomes delinquent, etc. etc. etc. Money and friends don't mix. And that's mostly because people have different ideas in their head about what 'fair' means. Anything you don't have in writing, if it comes up in a disagreement, could cause a friendship-ending fight. Even if you are able to agree on every term and condition under the sun, there's still a problem - what if 5 years from now, someone decides that a certain clause isn't fair? Imagine one of you needs to move into the condo because your primary residence was pulled out from under you. They crash at the condo because they have no where else to go. You try to demand payment, but they lost their job. The agreement might say \"\"you must pay the partnership if you use the condo personally, at the standard monthly rate * # of days\"\". But what is the penalty clause - is everything under penalty of eviction, and forced sale of the condo and distribution of profits? Following through on such a penalty means the friendship would be over. You would feel guilty about doing it, and also about not doing it [at the same time, your other partner loses their job, and can't make 1/3rd of the mortgage payments anymore! They need the rent or the bank will foreclose on their house!] etc etc etc Even things like maintenance - are the 3 of you going to do it yourselves? Labour distributed how? Will anyone get a management fee? What about a referral fee for a new renter? Once you've thought of all possible circumstances and rules, and drafted it in writing, go talk to a lawyer, and maybe an accountant. There will be many things you won't have considered yet, and paying a few grand today will save you money and friends in the future.\"",
"title": ""
},
{
"docid": "36c896602ab0b1ab640cf2312e3bbe9c",
"text": "I'd recommend you use an online tax calculator to see the effect it will have. To your comment with @littleadv, there's FMV, agreed, but there's also a rate below that. One that's a bit lower than FMV, but it's a discount for a tenant who will handle certain things on their own. I had an arm's length tenant, who was below FMV, I literally never met him. But, our agreement through a realtor, was that for any repairs, I was not required to arrange or meet repairmen. FMV is not a fixed number, but a bit of a range. If this is your first rental, you need to be aware of the requirement to take depreciation. Simply put, you separate your cost into land and house. The house value gets depreciated by 1/27.5 (i.e. you divide the value by 27.5 and that's taken as depreciation each year. You may break even on cash flow, the rent paying the mortgage, property tax, etc, but the depreciation might still produce a loss. This isn't optional. It flows to your tax return, and is limited to $25K/yr. Further, if your adjusted gross income is over $100K, the allowed loss is phased out over the next $50K of income. i.e. each $1000 of AGI reduces the allowed loss by $500. The losses you can't take are carried forward, until you use them to offset profit each year, or sell the property. If you offer numbers, you'll get a more detailed answer, but this is the general overview. In general, if you are paying tax, you are doing well, running a profit even after depreciation.",
"title": ""
},
{
"docid": "8ad92aef2db18e00c11a34e335a8493c",
"text": "Well for starters you want to rent it for more than the apartment costs you. Aside from mortgage you have insurance, and maintenance costs. If you are going to have a long term rental property you need to make a profit, or at a bare minimum break even. Personally I would not like the break even option because there are unexpected costs that turn break even into a severe loss. Basically the way I would calculate the minimum rent for an apartment I owned would be: (Payment + (taxes/12) + (other costs you provide) + (Expected annual maintenance costs)) * 100% + % of profit I want to make. This is a business arrangement. Unless you are recouping some of your losses in another manner then it is bad business to maintain a business relationship that is costing you money. The only thing that may be worth considering is what comparable rentals go for in your area. You may be forced to take a loss if the rental market in your area is depressed. But I suspect that right now your condo is renting at a steal of a rate. I would also suspect that the number you get from the above formula falls pretty close to what the going rate in your area is.",
"title": ""
}
] |
fiqa
|
07fcd41ea3fc7142f4f41c0231960e9f
|
Paying off mortgage or invest in annuity
|
[
{
"docid": "7a0bb7979da8c6d219194fbe361f039b",
"text": "You can't pay your bills with equity in your house. Assuming you paid off the mortgage, where would the money come from that you plan to live off of? If that is your whole retirement savings I'd say do neither. Maybe an annuity (not variable) for SOME of the money, keep the rest invested in conservative investments some of it in cash for emergencies.",
"title": ""
},
{
"docid": "359d3c194143a1f84f2c482a5df6ebdc",
"text": "\"There is no formula to answer the question. You have to balance return on investment with risk. There's also the question of whether you have any children or other heirs that you would like to leave money to. The mortgage is presumably a guaranteed thing: you know exactly how much the payments will be for the rest of the loan. I think most annuities have a fixed rate of return, but they terminate when you both die. There are annuities with a variable return, but usually with a guaranteed minimum. So if you got an annuity with a fixed 3.85% return, and you lived exactly 18 more years, then (ignoring tax implications), there'd be no practical difference between the two choices. If you lived longer than 18 years, the annuity would be better. If less, paying off the mortgage would be better. Another option to consider is doing neither, but keeping the money in the 401k or some other investment. This will usually give better than 3.85% return, and the principal will be available to leave to your heirs. The big drawback to this is risk: investments in the stock market and the like usually do better than 3 or 4%, but not always, and sometimes they lose money. Earlier I said \"\"ignoring tax implications\"\". Of course that can be a significant factor. Mortgages get special tax treatment, so the effective interest rate on a mortgage is less than the nominal rate. 401ks also get special tax treatment. So this complicates up calculations trying to compare. I can't give definitive numbers without knowing the returns you might get on an annuity and your tax situation.\"",
"title": ""
},
{
"docid": "fb78091094c61cbf35643c978ba23f06",
"text": "I am in the process of writing an article about how to maximize one's Social Security benefits, or at least, how to start the analysis. This chart, from my friends at the Social Security office shows the advantage of waiting to take your benefit. In your case, you are getting $1525 at age 62. Now, if you wait 4 years, the benefit jumps to $2033 or $508/mo more. You would get no benefit for 4 years and draw down savings by $73,200, but would get $6,096/yr more from 64 on. Put it off until 70, and you'd have $2684/mo. At some point, your husband should apply for a spousal benefit (age 66 for him is what I suggest) and collect that for 4 years before moving to his own benefit if it's higher than that. Keep in mind, your generous pensions are likely to push you into having your social security benefit taxed, and my plan, above will give you time to draw down the 401(k) to help avoid or at least reduce this.",
"title": ""
}
] |
[
{
"docid": "74b3f1e58bda2b062d3ad816837fd262",
"text": "Certainly, paying off the mortgage is better than doing nothing with the money. But it gets interesting when you consider keeping the mortgage and investing the money. If the mortgage rate is 5% and you expect >5% returns from stocks or some other investment, then it might make sense to seek those higher returns. If you expect the same 5% return from stocks, keeping the mortgage and investing the money can still be more tax-efficient. Assuming a marginal tax rate of 30%, the real cost of mortgage interest (in terms of post-tax money) is 3.5%*. If your investment results in long-term capital gains taxed at 15%, the real rate of growth of your post-tax money would be 4.25%. So in post-tax terms, your rate of gain is greater than your rate of loss. On the other hand, paying off the mortgage is safer than investing borrowed money, so doing so might be more appropriate for the risk-averse. * I'm oversimplifying a bit by assuming the deduction doesn't change your marginal tax rate.",
"title": ""
},
{
"docid": "c4d9894d7f966b3aa952a5e5fe5676c0",
"text": "\"The mortgage has a higher interest rate, how can it make sense to pay off the HELOC first?? As for the mutual fund, it comes down to what returns you are expecting. If the after-tax return is higher than the mortgage rate then invest, otherwise \"\"invest\"\" in paying down the mortgage. Note that paying down debt is usually the best investment you have.\"",
"title": ""
},
{
"docid": "dbb1a5aaa7bc8c7f62db10fa77815473",
"text": "Based on your numbers, it sounds like you've got 12 years left in the private student loan, which just seems to be an annoyance to me. You have the cash to pay it off, but that may not be the optimal solution. You've got $85k in cash! That's way too much. So your options are: -Invest 40k -Pay 2.25% loan off -Prepay mortgage 40k Play around with this link: mortgage calculator Paying the student loan, and applying the $315 to the monthly mortgage reduces your mortgage by 8 years. It also reduces the nag factor of the student loan. Prepaying the mortgage (one time) reduces it by 6 years. (But, that reduces the total cost of the mortgage over it's lifetime the most) Prepaying the mortgage and re-amortizing it over thirty years (at the same rate) reduces your mortgage payment by $210, which you could apply to the student loan, but you'd need to come up with an extra $105 a month.",
"title": ""
},
{
"docid": "bf79dde3dc875f2fbf63f83f73b19f09",
"text": "See my recent answer to a similar question on prepaying a mortgage versus investing in IRA. The issue here is similar: you want to compare the relative rates of funding your retirement account versus paying down your debt. If you can invest at a better rate than you are paying on your debt, with similar risk, then you should invest. Otherwise, pay down your debt. The big difference with your situation is that you have a variable rate loan, so there's a significant risk that the rate on it will go up. If I was in your shoes, I would do the following: But that's me. If you're more debt-averse, you may decide to prepay that fixed rate loan too.",
"title": ""
},
{
"docid": "1dd669d41dae2b13de2963af30ee98d2",
"text": "\"First, I would recommend getting rid of this ridiculous debt, or remember this day and this answer, \"\"you will be living this way for many years to come and maybe worse, no/not enough retirement\"\". Hold off on any retirement savings right now so that the money can be used to crush this debt. Without knowing all of your specifics (health insurance deductions, etc.) and without any retirement contribution, given $190,000 you should probably be taking home around $12,000 per month total. Assuming a $2,000 mortgage payment (30 year term), that is $10,000 left per month. If you were serious about paying this off, you could easily live off of $3,000 per month (probably less) and have $7,000 left to throw at the student loan debt. This assumes that you haven't financed automobiles, especially expensive ones or have other significant debt payments. That's around 3 years until the entire $300,000 is paid! I have personally used and endorse the snowball method (pay off smallest to largest regardless of interest rate), though I did adjust it slightly to pay off some debts first that had a very high monthly payment so that I would then have this large payment to throw at the next debt. After the debt is gone, you now have the extra $7,000 per month (probably more if you get raises, bonuses etc.) to enjoy and start saving for retirement and kid's college. You may have 20-25 years to save for retirement; at $4,000 per month that's $1 million in just savings, not including the growth (with moderate growth this could easily double or more). You'll also have about 14 years to save for college for this one kid; at $1,500 per month that's $250,000 (not including investment growth). This is probably overkill for one kid, so adjust accordingly. Then there's at least $1,500 per month left to pay off the mortgage in less than half the time of the original term! So in this scenario, conservatively you might have: Obviously I don't know your financials or circumstances, so build a good budget and play with the numbers. If you sacrifice for a short time you'll be way better off, trust me from experience. As a side note: Assuming the loan debt is 50/50 you and your husband, you made a good investment and he made a poor one. Unless he is a public defender or charity attorney, why is he making $60,000 when you are both attorneys and both have huge student loan debt? If it were me, I would consider a job change. At least until the debt was cleaned up. If he can make $100,000 to $130,000 or more, then your debt may be gone in under 2 years! Then he can go back to the charity gig.\"",
"title": ""
},
{
"docid": "a0b685b88b9cb09a1db6a3610f331f35",
"text": "As other's have said, paying off the student loan first makes the most sense because of That said, are you planning on staying in your house for a particularly long time? If so, refinancing your mortgage into a fixed-rate loan might be the best use of your money long term. Not sure how much time is left on your 5/1 ARM before the rate starts to float, but if rates rise, your mortgage could quickly become more expensive than your student loan.",
"title": ""
},
{
"docid": "df0515b8e229a35936b1f259d49b8ea3",
"text": "I like this option, rather than exposing all 600k to market risk, I'd think of paying off the mortgage as a way to diversify my portfolio. Expose 400k to market risk, and get a guaranteed 3.75% return on that 200k (in essence). Then you can invest the money you were putting towards your mortgage each month. The potential disadvantage, is that the extra 200k investment could earn significantly more than 3.75%, and you'd lose out on some money. Historically, the market beats 3.75%, and you'd come out ahead investing everything. There's no guarantee. You also don't have to keep your money invested, you can change your position down the road and pay off the house. I feel best about a paid off house, but I know that my sense of security carries opportunity cost. Up to you to decide how much risk you're willing to accept. Also, if you don't have an emergency fund, I'd set up that first and then go from there with investing/paying off house.",
"title": ""
},
{
"docid": "a31a9db361a97b55d29f3aaf7dc22cfc",
"text": "Other answers are already very good, but I'd like to add one step before taking the advice of the other answers... If you still can, switch to a 15 year mortgage, and figure out what percentage of your take-home pay the new payment is. This is the position taken by Dave Ramsey*, and I believe this will give you a better base from which to launch your other goals for two reasons: Since you are then paying it off faster at a base payment, you may then want to take MrChrister's advice but put all extra income toward investments, feeling secure that your house will be paid off much sooner anyway (and at a lower interest rate). * Dave's advice isn't for everyone, because he takes a very long-term view. However, in the long-term, it is great advice. See here for more. JoeTaxpayer is right, you will not see anything near guaranteed yearly rates in mutual funds, so make sure they are part of a long-term investing plan. You are not investing your time in learning the short-term stock game, so stay away from it. As long as you are continuing to learn in your own career, you should see very good short-term gains there anyway.",
"title": ""
},
{
"docid": "e4ad5de991424ab48e01a72ac5cbd3ac",
"text": "\"I'll assume you live in the US for the start of my answer - Do you maximize your retirement savings at work, at least getting your employer's match in full, if they do this. Do you have any other debt that's at a higher rate? Is your emergency account funded to your satisfaction? If you lost your job and tenant on the same day, how long before you were in trouble? The \"\"pay early\"\" question seems to hit an emotional nerve with most people. While I start with the above and then segue to \"\"would you be happy with a long term 5% return?\"\" there's one major point not to miss - money paid to either mortgage isn't liquid. The idea of owing out no money at all is great, but paying anything less than \"\"paid in full\"\" leaves you still owing that monthly payment. You can send $400K against your $500K mortgage, and still owe $3K per month until paid. And if you lose your job, you may not so easily refinance the remaining $100K to a lower payment so easily. If your goal is to continue with real estate, you don't prepay, you save cash for the next deal. Don't know if that was your intent at some point. Disclosure - my situation - Maxing out retirement accounts was my priority, then saving for college. Over the years, I had multiple refinances, each of which was a no-cost deal. The first refi saved with a lower rate. The second, was in early 2000s when back interest was so low I took a chunk of cash, paid principal down and went to a 20yr from the original 30. The kid starts college, and we target retirement in 6 years. I am paying the mortgage (now 2 years into a 10yr) to be done the month before the kid flies out. If I were younger, I'd be at the start of a new 30 yr at the recent 4.5% bottom. I think that a cost of near 3% after tax, and inflation soon to near/exceed 3% makes borrowing free, and I can invest conservatively in stocks that will have a dividend yield above this. Jane and I discussed the plan, and agree to retire mortgage free.\"",
"title": ""
},
{
"docid": "1313281ff8064d868e5ab7c3094bc434",
"text": "It all depends on your priorities, but if it were me I'd work to get rid of that debt as your first priority based on a few factors: I might shift towards the house if you think you can save enough to avoid PMI, as the total savings would probably be more in aggregate if you plan on buying a house anyway with less than 20% down. Of course, all this is lower priority than funding your retirement at least up to the tax advantaged and/or employer matched maximums, but it sounds like you have that covered.",
"title": ""
},
{
"docid": "513293e3d919d4f98426df907777bc61",
"text": "I want to start investing money, as low risk as possible, but with a percentage growth of at least 4% over 10 - 15 years. ...I do have a mortgage, Then there's your answer. You get a risk-free return of the interest rate on your mortgage (I'm assuming it's more than 4%). Every bit you put toward your mortgage reduces the amount of interest you pay by the interest rate, helping you to pay it off faster. Then, once your mortgage is paid off, you can look at other investments that fit your risk tolerance and return requirements. That said, make sure you have enough emergency savings to reduce cash flow interruptions, and make sure you don't have any other debts to pay. I'm not saying that everyone with a mortgage should pay it off before other investments. You asked for a low-risk 4% investment, which paying your mortgage would accomplish. If you want more return (and more risk) then other investments would be appropriate. Other factors that might change your decision might be:",
"title": ""
},
{
"docid": "c8aea3fd2ed6a452833e4113135fef07",
"text": "So I will attempt to answer the other half of the question since people have given good feedback on the mortgage costs of your various options. Assumptions: It is certain that I am off on some (or all) of these assumptions, but they are still useful for drawing a comparison. If you were to make your mortgage payment, then contribute whatever you have left over to savings, this is where you would be at the end of 30 years. Wait, so the 30 year mortgage has me contributing $40k less to savings over the life of the loan, but comes out with a $20k higher balance? Yes, because of the way compounding interest works getting more money in there faster plays in your favor, but only as long as your savings venue is earning at a higher rate than the cost of the debt your are contrasting it with. If we were to drop the yield on your savings to 3%, then the 30yr would net you $264593, while the 15yr ends up with $283309 in the bank. Similarly, if we were to increase the savings yield to 10% (not unheard of for a strong mutual fund), the 30yr nets $993418, while the 15yr comes out at $684448. Yes in all cases, you pay more to the bank on a 30yr mortgage, but as long as you have a decent investment portfolio, and are making the associated contributions, your end savings come out ahead over the time period. Which sounds like it is the more important item in your overall picture. However, just to reiterate, the key to making this work is that you have an investment portfolio that out performs the interest on the loan. Rule of thumb is if the debt is costing you more than the investment will reliably earn, pay the debt off first. In reality, you need your investments to out perform the interest on your debt + inflation to stay ahead overall. Personally, I would be looking for at least an 8% annual return on your investments, and go with the 30 year option. DISCLAIMER: All investments involve risk and there is no guarantee of making any given earnings target.",
"title": ""
},
{
"docid": "64bf683b2cb764773bfa0664236dc782",
"text": "Others have suggested paying off the student loan, mostly for the satisfaction of one less payment, but I suggest you do the math on how much interest you would save by paying early on each of the loans: When you do the calculations I think you'll see why paying toward the debt with the highest interest rate is almost always the best advice. Whether you can refinance the mortgage to a lower rate is a separate question, but the above calculation would still apply, just with different amortization schedules.",
"title": ""
},
{
"docid": "32a5505c4337f438c896c4c4fe254687",
"text": "\"A major thing to consider when deciding whether to invest or pay off debt is cash flow. Specifically, how each choice affects your cash flow, and how your cash flow is affected by various events. Simply enough, your cash flow is the amount of money that passes through your finances during a given period (often a month or a year). Some of this is necessary payments, like staying current on loans, rent, etc., while other parts are not necessary, such as eating out. For example, you currently have $5,500 debt at 3% and another $2,500 at 5%. This means that every month, your cashflow effect of these loans is ($5,500 * 3% / 12) + ($2,500 * 5% / 12) = $24 interest (before any applicable tax effects), plus any required payments toward the principal which you don't state. To have the $8,000 paid off in 30 years, you'd be paying another $33 toward the principal, for a total of about $60 per month before tax effects in your case. If you take the full $7,000 you have available and use it to pay off the debt starting with the higher-interest loan, then your situation changes such that you now: Assuming that the repayment timeline remains the same, the cashflow effect of the above becomes $1,000 * 3% / 12 = $2.50/month interest plus $2.78/month toward the principal, again before tax effects. In one fell swoop, you just reduced your monthly payment from $60 to $5.25. Per year, this means $720 to $63, so on the $7,000 \"\"invested\"\" in repayment you get $657 in return every year for a 9.4% annual return on investment. It will take you about 11 years to use only this money to save another $7,000, as opposed to the 30 years original repayment schedule. If the extra payment goes toward knocking time off the existing repayment schedule but keeping the amount paid toward the principal per month the same, you are now paying $33 toward the principal plus $2.50 interest against the $1,000 loan, which means by paying $35.50/month you will be debt free in 30 months: two and a half years, instead of 30 years, an effective 92% reduction in repayment time. You immediately have another about $25/month in your budget, and in two and a half years you will have $60 per month that you wouldn't have if you stuck with the original repayment schedule. If instead the total amount paid remains the same, you are then paying about $57.50/month toward the principal and will be debt free in less than a year and a half. Not too shabby, if you ask me. Also, don't forget that this is a known, guaranteed return in that you know what you would be paying in interest if you didn't do this, and you know what you will be paying in interest if you do this. Even if the interest rate is variable, you can calculate this to a reasonable degree of certainty. The difference between those two is your return on investment. Compare this to the fact that while an investment in the S&P might have similar returns over long periods of time, the stock market is much more volatile in the shorter term (as the past two decades have so eloquently demonstrated). It doesn't do you much good if an investment returns 10% per year over 30 years, if when you need the money it's down 30% because you bought at a local peak and have held the investment for only a year. Also consider if you go back to school, are you going to feel better about a $5.25/month payment or a $60/month payment? (Even if the payments on old debt are deferred while you are studying, you will still have to pay the money, and it will likely be accruing interest in the meantime.) Now, I really don't advocate emptying your savings account entirely the way I did in the example above. Stuff happens all the time, and some stuff that happens costs money. Instead, you should be keeping some of that money easily available in a liquid, non-volatile form (which basically means a savings account without withdrawal penalties or a money market fund, not the stock market). How much depends on your necessary expenses; a buffer of three months' worth of expenses is an often recommended starting point for an emergency fund. The above should however help you evaluate how much to keep, how much to invest and how much to use to pay off loans early, respectively.\"",
"title": ""
},
{
"docid": "072e32c49d800eee114844c789d21f4e",
"text": "I would be very careful with annuity products. If you don't mind sharing, what are the terms for the annuity? Usually I would recommend not to use retirement account to pay off debt, mainly because of the penalty that comes from withdrawing prematurely. But in this case, First of all, stop contributing to the annuity account if you're not contractually obligated. Second, try to convert your annuity assets to more common equity/debt products. Thirdly, try to cut back on spending to pay off debt, assuming you stopped paying 2X on housing, since 30k debt shouldn't be that hard to pay off with 100k income. Lastly, if all of the above are impossible, you can withdraw from that account to pay off your debt.",
"title": ""
}
] |
fiqa
|
92980973bf9ae7117aaee8398e40161e
|
Is it possible to take advantage of exceptions to early withdrawal penalties on a 401(k)?
|
[
{
"docid": "381ac48cf2db90a9ec2b8b900edf4b5c",
"text": "Your question doesn't make much sense. The exceptions are very specific and are listed on this site (IRS.GOV). I can't see how you can use any of the exceptions regularly while still continuing being employed and contributing. In any case, you pay income tax on any distribution that has not been taxed before (which would be a Roth account or a non-deductible IRA contribution). Including the employer's match. Here's the relevant portion: The following additional exceptions apply only to distributions from a qualified retirement plan other than an IRA:",
"title": ""
},
{
"docid": "d2c894ede59d3edcf779c575c9a3ed0a",
"text": "Most companies put the company match in your account each paycheck, but your are not generally vested for the match. If you leave before the specified time period then they pull back part of the matching funds. I knew somebody who did something similar back in the 1980's with their 401K. They put in 8% of their paycheck after taxes; a 100% match was deposited; then they pulled out the employees contribution every quarter. They did this for the 10 years I knew them. It avoided any tax implications, and they were still saving 8% of their pay for retirement.",
"title": ""
}
] |
[
{
"docid": "85654a54b7da167360ce6be36e5cf8bd",
"text": "\"You should call your plan administrator and ask. Few plans allow people to take a \"\"hardship withdraw\"\" after leaving because their is no way to pay the funds back since you are no longer working there. The repayment process is done via payroll deduction usually. Also you will most likely be required to withhold 20% for taxes from the 401k. There is no way to defer the taxation unless you take it next calendar year. You may want to consider doing a rollover into an IRA and taking the w/d and you can do a 60 day rollover. You only get 1 per rolling 12 months now (rather than account do to a change in the rule.) IRA's (not 401k) do give you flexible withholding so you don't have to pay taxes today though they would still be in the tax year based on the calendar date taken out, so if you take it out in 2015 your going to be paying them at the end of this year when you file in April of 2016. Your question seems to be mixing characteristics of both 401k and IRA and while they are similar they do operate very differently.\"",
"title": ""
},
{
"docid": "f8c9078cccfd12d96e73929d4f49c607",
"text": "If you withdraw your funds from your 401k and DO NOT mive it into another 401k plan or IRA within 60 days it will constitute as an early distribution which will carry a panlty of 10% as well as have income tax owed on it.",
"title": ""
},
{
"docid": "3f97bdd285f5c1609acbb33681798096",
"text": "Sure it is quite easy depending on income. If one receives a bonus that is high in relationship to their income, it is very easy to max out a 401K prior to when one intended. The later in the year such a bonus occurs the more likely that one will max out prematurely. If one only has a single employer in the year, the custodial company will not accept amounts above the max, so one need not worry about that case. If there is more than one employer, a refund is typically issued with the appropriate tax withheld. Assume that a person makes about 60K per year. They intend to put 12k into their 401K, thus have their contribution set to 20%. By the beginning of September, they have 8K into their retirement, but they also receive a bonus of 50K. Their 401K contribution for that bonus will be 10K, and thus they have maxed out their individual contribution for the year. So they will not be able to contribute for the rest of the year, including the first paycheck in September. They will miss out on any match that the company may supply. While that sucks, it should be relieved by the bless of receiving such a large bonus.",
"title": ""
},
{
"docid": "aabcf90498394c77e1ceb55cb3be9619",
"text": "If you withdraw money, even under a hardship clause like for purchasing a house, you'll still own taxes and a penalty on it. If you are talking about a 401K loan, a loan will have no taxes/penalty, but you'll repay the loan with after-tax reduction of your salary. Max is 50k or 50% of the balance. It maybe up to the 401K administrator whether all of the funds need to go to the down payment and closing costs or whether some can go towards renovations.",
"title": ""
},
{
"docid": "8a94f713cc7bbe9b9fc10ca2f968c587",
"text": "No, sorry. A change of 401(k) administrator is not an out, otherwise many would flee a bad plan. I'd suggest you only deposit up to the match, but use an IRA if you'd like to save more. A plan with high fees can easily negate the tax benefits and then some.",
"title": ""
},
{
"docid": "1e1a358c98a0b9f7c9d1d3a1525349a4",
"text": "\"There is no penalty for foreigners but rather a 30% mandatory income tax withholding from distributions from 401(k) plans. You will \"\"get it back\"\" when you file the income tax return for the year and calculate your actual tax liability (including any penalties for a premature distribution from the 401(k) plan). You are, of course, a US citizen and not a foreigner, and thus are what the IRS calls a US person (which includes not just US citizens but permanent immigrants to the US as well as some temporary visa holders), but it is entirely possible that your 401(k) plan does not know this explicitly. This IRS web page tells 401(k) plan administrators Who can I presume is a US person? A retirement plan distribution is presumed to be made to a U.S. person only if the withholding agent: A payment that does not meet these rules is presumed to be made to a foreign person. Your SSN is presumably on file with the 401(k) plan administrator, but perhaps you are retired into a country that does not have an income tax treaty with the US and that's the mailing address that is on file with your 401(k) plan administrator? If so, the 401(k) administrator is merely following the rules and not presuming that you are a US person. So, how can you get around this non-presumption? The IRS document cited above (and the links therein) say that if the 401(k) plan has on file a W-9 form that you submitted to them, and the W-9 form includes your SSN, then the 401(k) plan has valid documentation to associate the distribution as being made to a US person, that is, the 401(k) plan does not need to make any presumptions; that you are a US person has been proved beyond reasonable doubt. So, to answer your question \"\"Will I be penalized when I later start a regular monthly withdrawal from my 401(k)?\"\" Yes, you will likely have mandatory 30% income tax withholding on your regular 401(k) distributions unless you have established that you are a US person to your 401(k) plan by submitting a W-9 form to them.\"",
"title": ""
},
{
"docid": "e103bd66c127a2a3b1012b8e9ebd8066",
"text": "Mostly true. Very few plans allow for in-service withdrawal options. In most cases plans that do, only allow pure after tax sources to be withdrawn prior to age 59.5. The other case would be if you had rolled money from another k plan into your current plan. In almost all plans that money is always accessible. Otherwise you generally will have to wait to request a distribution until you turn 59.5 years of age.",
"title": ""
},
{
"docid": "360448724a2cebca4bbfeff2001f9da6",
"text": "The principal of the contribution can definitely be withdrawn tax-free and penalty-free. However, there is a section that makes me think that the earnings part may be subject to penalty in addition to tax. In Publication 590-A, under Traditional IRAs -> When Can You Withdraw or Use Assets? -> Contributions Returned Before Due Date of Return -> Early Distributions Tax, it says: The 10% additional tax on distributions made before you reach age 59½ does not apply to these tax-free withdrawals of your contributions. However, the distribution of interest or other income must be reported on Form 5329 and, unless the distribution qualifies as an exception to the age 59½ rule, it will be subject to this tax. This section is only specifically about the return of contributions before the due date of return, not a general withdrawal (as you can see from the first sentence that the penalty doesn't apply to contributions, which wouldn't be true of general withdrawals). Therefore, the second sentence must be about the earnings part of the withdrawal that you must make together with the contribution part as part of the return of contributions before the due date of the return. If the penalty it is talking about is only about other types of withdrawals and doesn't apply to the earnings part of the return of contribution before the due date of the return, then this sentence wouldn't make sense as it's in a part that's only about return of contribution before the due date of the return.",
"title": ""
},
{
"docid": "1636550ce3e207462a8bd1aff3e49301",
"text": "The first step is to contact the company you are considering using as an administrator. Ask if they have a loan provision. For what it's worth, I looked at Schwab, and it seems to indicate they do not offer loans against this type of 401(k). That doesn't mean no one does, just that you may need to look around.",
"title": ""
},
{
"docid": "b6ec9cf6e1f71378bc9cd99c0569af91",
"text": "One additional note related to Roth vs regular: for a regular 401k or IRA, you pay the 10% penalty on any withdrawal. For a Roth, you can withdraw the contributions early (but not the earnings) without any penalty or tax. Of course, if this is a retirement account it's better to leave it that way. Personally it's one reason I avoid Roth - in addition to probably being in a higher bracket now, I also would prefer not to be able to touch my money. But for some there could be advantages in having that ability (such as in an emergency).",
"title": ""
},
{
"docid": "cc5ab13ec048f5bc308e798782c73ef4",
"text": "\"Your question is based on incorrect assumptions. Generally, there's no \"\"penalty\"\", per se, to make a withdrawal from your RRSP, even if you make a withdrawal earlier than retirement, however you define it. A precise meaning for \"\"retirement\"\" with respect to RRSPs is largely irrelevant.* Our U.S. neighbours have a 10% penalty on non-hardship early withdrawals (before age 59 ½) from retirement accounts like the 401k and IRA. It's an additional measure designed to discourage early withdrawals, and raise more tax. Yet, in Canada, there is no similar penalty. Individual investments inside your RRSP may have associated penalties, such as the dreaded \"\"deferred sales charge\"\" (DSC) of some back-end loaded mutual funds, or such as LSVCC funds that generated additional special tax credits that could get clawed back. Yet, these early withdrawal penalties are distinct from the RRSP nature of your account. Choose your investments carefully to avoid these kinds of surprises. Rather, an RRSP is a tax-deferred account, and it works like this: The government allows you to claim a nice juicy tax deduction, which can reduce your income tax at your marginal rate in the year you make a contribution, or later if you should choose to defer the deduction. The resulting pre-tax money accumulated in your RRSP benefits from further tax deferral: assets can grow without attracting annual income tax on earned interest, dividends, or capital gains. You don't need to declare on your income tax return any of the income earned inside your RRSP, unlike a regular investment account. Here's the rub: Once you decide to withdraw money from your RRSP, the entire amount withdrawn is considered regular income in the year in which you make the withdrawal. Thus, your withdrawals are subject to income tax, and yes, at your marginal rate. This is always the case, whether before or after retirement. You mentioned two special programs: The Home Buyers' Plan (HBP), and the Lifelong Learning Plan (LLP). Neither the HBP nor the LLP permit tax-free withdrawals. Rather, each of these programs are special kinds of loans that you can borrow from your own RRSP. HBP and LLP loan money isn't taxed when you get it because you are required to pay it back, and you pay it back into your own RRSP: You always pay income tax at your marginal rate on your RRSP withdrawals.** * Above, I said a precise meaning for \"\"retirement\"\" with respect to RRSPs is largely irrelevant. Yet, there are ages that matter: By the end of the year in which you turn 71, you are required to convert your RRSP to a RRIF. It's similar, but you can no longer contribute, and you must withdraw a minimum amount each year. Other circumstances related to age may qualify for minor tax relief intended for retirees, such as the Age Amount or the Pension Income Credit. Generally, such measures don't significantly change the fact that you pay income tax on RRSP withdrawals at your marginal rate – these measures raise the minimum you can take out without attracting tax, but most do nothing at the margin.** ** Exception: One might split eligible pension income with a spouse or common-law partner, which may reduce tax at the margin.\"",
"title": ""
},
{
"docid": "a087862ebd93bef3b6d75993e9ced7e4",
"text": "As far as I know, there is no direct equivalent. An IRA is subject to many rules. Not only are there early withdrawal penalties, but the ability to deduct contributions to an IRA phases out with one's income level. Qualified withdrawals from an IRA won't have penalties, but they will be taxed as income. Contributions to a Roth IRA can be made post-tax and the resulting gains will be tax free, but they cannot be withdrawn early. Another tax-deductable investment is a 529 plan. These can be withdrawn from at any time, but there is a penalty if the money is not used for educational purposes. A 401K or similar employer-sponsored fund is made with pre-tax dollars unless it is designated as a Roth 401K. These plans also require money to be withdrawn specifically for retirement, with a 10% penalty for early withdrawal. Qualifying withdrawals from a regular retirement plan are taxed as income, those from a Roth plan are not (as with an IRA). Money can be made harder to get at by investing in all of the types of funds you can invest in using an IRA through the same brokers under a different type of account, but the contribution will be made with post-tax, non-deductable dollars and the gains will be taxed.",
"title": ""
},
{
"docid": "cec66d2b008f06da053a3a1edde35544",
"text": "\"It's all about access to capital: You can borrow against 401ks up to an extent. You can borrow against CDs outside of tax sheltered retirement plans. You can't borrow against an IRA, although there is a situation with a very small time frame that would still be state sanctioned with no tax penalties. I wouldn't recommend it. Annuities come with penalties. I've looked at many possibilities of accessing retirement capital without penalty, and 401k's offer that ability, but its also good to just have savings accounts and investments that are not tax-deferred. Borrowing against 401k pros: http://www.ehow.com/how_2075551_borrow-money-from-401k.html cons: http://www.investopedia.com/articles/retirement/06/eightreasons401k.asp#axzz29TtJPoXO Outside of your general expenses and play money, money you put toward - say... - a house should be non-tax deferred. Because if you like borrowing, you can always borrow against the house, or any property. The root of the problem is liquidity and access to capital, understanding those fundamental concepts will answer most questions. \"\"Am I liquid? Yes/No\"\" \"\"Can I be liquid without losing money? Yes/No\"\" As usual, more is more, adjust your priorities accordingly.\"",
"title": ""
},
{
"docid": "803cb057c1ed98de6507e2a0c2fb559d",
"text": "You should try to take out other loans sufficient to pay off your 401(k) loan if you can. Maybe you can take out a home equity loan? You can also ask your bank about unsecured loans. You should also check the rules for your new employer's 401(k), if you're rolling over your 401(k). There's a small possibility that you could take out another loan right now and apply it to the previous loan balance. Or if you need to wait, you could use it to help pay off any temporary loans that were needed to avoid the distribution penalty.",
"title": ""
},
{
"docid": "4b6224aebbf715d28d93d855f081906e",
"text": "Bad idea. If you lose your job and need to pay medical expenses, you can withdraw penalty-free. If you lose your job and just withdraw, you will have lower income and lower tax, though you will pay a penalty. If you don't lose your job today, consider your 401(k) an additional protection, just in case you do lose it tomorrow. Just pick the least risky investment option and relax. Besides, it will diversify your investment and protect you from your own investment decisions. If you are so ready to take a 10% loss, you are likely not so skilled in this area, so it's good to have a backup plan. But of course, do contribute 3% so you get a match.",
"title": ""
}
] |
fiqa
|
8ce757d6029f50b48d4c92ff8dc474b4
|
Over contributing to workplace pension or private pension
|
[
{
"docid": "8c498fc6442bc612d07bb7c6c878476a",
"text": "\"Firstly (and this part is rather opinion-based) I would absolutely not think of making more pension contributions when you are currently totaling 6% of salary as \"\"over contributing\"\". There are some who argue that you should be putting a minimum of 20% away for retirement throughout your working life; you don't say how old you are / how close to retirement you are, but a common rule of thumb is to halve your age and put away that % of your salary into your pension. So I would certainly start with upping those contributions. I actually don't think it makes much difference whether you go for just your workplace pension versus a separate private one - in general you end up paying management fees that are a % of the value, so whether it is in one place or split doesn't cost any less. The \"\"all eggs in one basket\"\" syndrome is a possible argument but equally if you change jobs a few times and end up with half a dozen pension pots it can be very hard to stay on top of them all. If you end up with everything in one pot and then transfer it when you change jobs, it's easier to manage. Other options: ISA as you mentioned; on the plus side these are tax free. On the minus side, you can either go for a cash ISA which at the moment has very low rates of return, and/or a stocks and shares ISA which exposes you to risks in the stock market. If you have debt, consider paying it off early / overpaying. Student loans may or may not be the exception to this depending on your personal situation. Certainly if you have a mortgage you can save a vast amount by overpaying early. Other investments - stocks and shares, BTL housing, fine wines, Bitcoin, there are almost limitless possibilities. But it makes sense to max out the tax-efficient options before you look into these.\"",
"title": ""
}
] |
[
{
"docid": "21e155150e3ba5ad7e9cb5751b147ff3",
"text": "As a general rule of thumb, age and resiliency of your profession (in terms of high and stable wages) in most cases imply that you have the ABILITY to accept higher than average level of risk by investing in stocks (rather than bonds) in search for capital appreciation (rather than income), simply because you have more time to offset any losses, should you have any, and make capital gains. Dividend yield is mostly sough after by people at or near retirement who need to have some cash inflows but cannot accept high risk of equity investments (hence low risk dividend stocks and greater allocation to bonds). Since you accept passive investment approach, you could consider investing in Target Date Funds (TDFs), which re-allocate assets (roughly, from higher- to lower-risk) gradually as the fund approaches it target, which for you could be your retirement age, or even beyond. Also, why are you so hesitant to consider taking professional advice from a financial adviser?",
"title": ""
},
{
"docid": "8a64117d96c277d1c5691678a3221d1f",
"text": "\"You are legally able to contribute more than 4% to your 401(k) (unless you've hit the actual limit). There is no reason you need to pull out your \"\"extra\"\" contribution. So basically they just want their $27.50 back. So offer (via email or writing) to send them a check. You obviously don't work there any more, so if they insist it comes from your IRA or are not willing to accept a check, tell them to @%#&* off (OK, not really, that would be unprofessional, but that's the general idea). They overpaid you by $27.50, and you are legally bound to return the extra pay, but not to put up with their BS. Tell them you've offered to pay, and if they don't want to accept a check, they can sue you for it to try to get it in the form they prefer (which they won't do, and even if they did, at most the judge would just tell you to write a check - which you offered from the outset, so they'd probably owe your legal fees).\"",
"title": ""
},
{
"docid": "a62cbd0cc1c11c54f7ff73eb90ab0e7e",
"text": "Cutting 25% from pensions is a big deal. This is why I'm going to get out of the company pension. If the money isn't mine, what is it? Are they giving me more return on my interest than normal to make up for the fact they can decide to back out of the agreement at any point? No.",
"title": ""
},
{
"docid": "47bdbf1890afe60c5bb5ffc4a785060f",
"text": "\"You do not need to inform your employer of your additional activity, but it is your responsibility not to work for more than 48 hours per week as long as you are an employee. So if you are working 38 hours for your employer, you may not work for yourself for more than 10 hours. It is, however, not so easy in practice to draw the line between work and a hobby, as long as you are not being paid by the hour. The main reason to present your employer with an addition to your work contract is to make it legally very clear that he holds no intentions to claim copyright to your work. He may attempt to do something funky like claim your home computer is, in fact, a work computer because you used it once a month to work from home, and your work contract may contain a paragraph that all work performed on a work computer results in copyright ownership for your employer. I have no idea how likely this is in practice, but this is the reason I know is commonly given as legal advice to have a contract. So the normal contract you present your employer with says: In order to earn user contribution money from a website, you need to register as a sole proprietor (Gewerbeanmeldung) and pay trade tax (Gewerbesteuer) and sales tax (Umsatzsteuer, alternatively you claim small trade exception, Kleingewerbe), which also makes a tax return mandatory. I would guess, however, (and this is not legal advice in any way, just my guess), that a couple of contributions towards server cost in a strictly non-profit endeavor is not commercial (\"\"gewerblich\"\") at all but private, in the same way that you may write an invoice to someone you sold your old bike to, or a kid may get paid to mow someone's lawn. Based on that guess, my non-legal-advice recommendation is to take the contributions and do nothing else, as long as the amount is nowhere near breaking even if you count your work input.\"",
"title": ""
},
{
"docid": "6a74565edf0db6d12f62a512085a4056",
"text": "There are two things to consider: taxes - beneficial treatment for long-term holding, and for ESPP's you can get lower taxes on higher earnings. Also, depending on local laws, some share schemes allow one to avoid some or all on the income tax. For example, in the UK £2000 in shares is treated differently to 2000 in cash vesting - restricted stocks or options can only be sold/exercised years after being granted, as long as the employee keeps his part of the contract (usually - staying at the same place of works through the vesting period). This means job retention for the employees, that's why they don't really care if you exercise the same day or not, they care that you actually keep working until the day when you can exercise arrives. By then you'll get more grants you'll want to wait to vest, and so on. This would keep you at the same place of work for a long time because by quitting you'd be forfeiting the grants.",
"title": ""
},
{
"docid": "961b808e8f5aff1ccc271dcee4ea0080",
"text": "This is basically a math problem. It depends on the pension benefits, the lump sum, and the chance that the company doesn't honor its pension plan. If you're willing to share the first 2 and the company name, it's possible to roughly figure out the odds of the third if your company has bonds or CDS. Maybe some bored analyst would do it for you here, or you could probably hire a financial advisor for an hour or 2 to figure it out.",
"title": ""
},
{
"docid": "2cb36b9aa5ca41289286cfc032fb1dc3",
"text": "My uncle seen the writing on the wall a year or two ago. He retired early and got his pension out of the company. Apparently the pensions are invested back into the company so they don't only loose their job when the company fails.",
"title": ""
},
{
"docid": "36a804f76053758e3c670904a4eed573",
"text": "\"typically, your employer will automatically stop making contributions once you hit the 18k$ limit. it is worth noting that employer contributions (e.g. \"\"matching\"\") do not count towards the 18k$ employee pre-tax contribution limit. however, if you have 2 employers during the year their combined payroll deductions might exceed the limit if you do not inform your later employer of the contributions you made at your former employer (or they ignore the info). in which case, you must request a refund of \"\"excess contributions\"\" from one of the plans (your choice). you must report the refund as taxable income on your taxes. if you do not make this request by the time you file your taxes, the tax man will reject your filing and \"\"adjust\"\" your return with more taxes and penalties. sometimes requesting a refund of excess contributions might cause your employer to remove \"\"matching\"\" funds, but i am not clear on the rules behind that. there are some 401k plans that allow \"\"supplemental after-tax contributions\"\" up to the combined employee/employer limit (53k$ in 2015 and 2016). it is a rare feature, and if your company offers it, you probably already know. however, generally it is governed by a separate contribution election that only take effect once you hit the employee pre-tax contribution limit (18k$ in 2015 and 2016). you could ask your hr department to be sure. 401k plans can be changed if there is enough employee demand for a rule change. especially in a small company, simply asking for them to allow dollar based contributions instead of percent based contributions can cause them to change the plan to allow it. similarly, you could request they allow \"\"supplemental after-tax contributions\"\", but that might be a harder change to get.\"",
"title": ""
},
{
"docid": "78a5d8a84aed1ae18df683af2601b1c9",
"text": "Hey, no worries at all. Like any business practice there are proper uses and abuses. First and foremost, companies should engage in allocation of capital that best serves their uses given prospects of 'returns' in a broad sense (this could very well include employee remuneration). After that, all excess funds should be distributed (through buybacks or dividends). There is without a doubt overincentivizing going on (i.e. buybacks preceding prudent capex or other investments) to boost C-suite pay. In other cases it is actually used to hide declining performance altogether (declining earnings compensated by decreasing outstanding shares). This is simply poor management using these tools. They would have most likely used others were these not made available to them (e.g underpaying/understaffing). It's an investors job to allocate capital that rewards good management practice. The problem is that this is an ideal made harder by obfuscation on the part of management, lack of governance and even the rise of passive management among others. I'm in private equity myself (with a strong focus on prudence and longevity of companies), so these are considerations that go without saying. I'm sometimes quite astonished what public companies get away with, but you can't blame tools for being used poorly or being available.",
"title": ""
},
{
"docid": "7a54240da4b431d36b9d5df63fdc615d",
"text": "I would definitely recommend contributing to an IRA. You don't know for sure you'll get hired full-time and be eligible for the 401(k) with match, so you should save for retirement on your own. I would recommend Roth over Traditional IRA in your situation, because let's say you do get hired full-time. Since the company offers a retirement plan, your 2015 Traditional IRA contribution would no longer be deductible at your income level (assuming you're single), and non-deductible Traditional IRAs aren't a very good deal (see here and here). If there's a decent chance you would get hired, this factor would override the pre-tax versus post-tax debate for me. At your income level you could go either way on that anyway. A Solo 401(k) would be worth looking into if you wanted to increase your contribution limit beyond what IRAs offer, but given that it sounds like you're just starting out saving for retirement, and you may be eligible for a 401(k) soon, it's probably overkill at this point.",
"title": ""
},
{
"docid": "a5209b3b8266ca522fdb34aa7dc6fe7e",
"text": "\"Calling this \"\"strange\"\" is an understatement. I'd call it illegal. You can't pay healthcare premiums with HSA funds while you are employed (unless you are on COBRA), and if you over contribute you pay a 6% tax on the overage unless you correct it. Furthermore, overage contributed by an employer must be treated as taxable wages, so they'd be better off just calling it a bonus and writing you a normal check. At least that way you wouldn't have to pay the 6% penalty on top of taxable wages.\"",
"title": ""
},
{
"docid": "175c2b5e3b93c09019d2e8d5c996204d",
"text": "\"There are two types of 401(k) contributions: \"\"elective contributions,\"\" which are the part put in by the employee and \"\"nonelective contributions,\"\" which are the part put in by the company. Elective contributions are summed across all the plans she is contributing to. So she can contribute $18,000 minus whatever she put in her 403(b). Additionally she can contribute 20% of the net profit of the company (before the elective contributions) as nonelective contributions (these contributions must be designated as such). You will notice that the IRS document says 25%, but that's what you can do if her business is incorporated. For a sole proprietorship, nonelective contributions ends up being limited at 20% of profit. Additionally, the sum of these two and her contribution to her 403(b) cannot exceed $53,000. Example: line 31 of her schedule C is $30,000 and she has contributed $10,000 to her 403(b). Maximum contribution to her solo 401(k) is ($18,000 - $10,000) + 0.2 * $30,000 = $14,000 Her total contributions for the year are $10,000 from her 403(b) plus $14,000 in her solo 401(k). This is less than $53,000 so this limit does not bind. If she made a ton of 1099 money, her contribution maximum would follow the above until it hit $53,000 and then it would stop there. The IRS describes this in detail in Publication 560, which also has a worksheet for figuring out your maximum explicitly. It's unpleasant reading and the worksheets are painful, but if you do it right, it will end up being as I just described it. Using the language of that publication, hers is a \"\"qualified plan\"\" of the \"\"defined contribution\"\" variety.\"",
"title": ""
},
{
"docid": "dbe1f56847fc4a43242381d1d2bcfc43",
"text": "\"Firstly, you should familiarise yourself with your options for your pension fund. They changed as of 6th April 2015 so it's all quite new. The Government's guidance on it is here. If you haven't already taken a tax-free lump sum from your pension fund, you can take up to 25% totally tax free immediately. That makes getting a house for 40K very accessible. Beyond the 25%, you can take any of it out whenever you want (\"\"flexi-access drawdown\"\" or \"\"lump sum payment\"\", depending on whether you take the 25% out up front or not). That'll be taxed, as if you earned it as income. So if you didn't have any other income, you can take another £10600 without tax this tax year, and then another £10600 or whatever the allowance goes up to next tax year, and so on. Above that you'd have to pay 20% tax until you reach the higher-rate tax threshold at about £40K/year. You say you do have other income so you'll have to take that into account as well when calculating what tax you'd have to pay. If you've reached state pension age that will add some more income, of course. Or, as you suggest, you can buy an annuity. You can do that with some or all of the money, and you can still take the 25% tax-free first. If you do buy an annuity the income from it will all be taxed, but again your personal allowance will apply. Essentially an annuity is the least risky option, particularly if you get one that is uprated with inflation. Uprating with inflation makes the initial income even lower but protects you against cost of living rises as you get older. In exchange for avoiding that risk, you probably lose out on average compared to some more risky options. You might choose to get an annuity large enough to cover your basic needs and take more chances with the rest.\"",
"title": ""
},
{
"docid": "8bd11357840b80e7088f487c2aa2a0ee",
"text": "I wish I had started contributing to the pension fund offered by my employer sooner than it became compulsory. That is, I started working when I was 23 but did not contribute to the pension fund until I was 30 (the age at which it is compulsory to do so). I lost a lot of productive years in mid to late 90s, when the stocks were doing well. :-(",
"title": ""
},
{
"docid": "d6bc92aee3c062df68dba5a5407131de",
"text": "My understanding is that to make the $18,000 elective deferral in this case, you need to pay yourself at least $18,000. There will be some tax on that for social security and Medicare, so you'll actually need to pay yourself a bit more to cover that too. The employer contribution is limited to 25% of your total compensation. The $18,000 above counts, but if you want to max out on the employer side, you'll need to pay yourself $140,000 salary since 25% of $140,000 is the $35,000 that you want to put into the 401k from the employer side. There are some examples from the IRS here that may help: https://www.irs.gov/retirement-plans/one-participant-401-k-plans I know that you're not a one-participant plan, but some of the examples may help anyway since they are not all specific to one-participant plans.",
"title": ""
}
] |
fiqa
|
ad7c6b5e5895e60a0e94c41b5720f502
|
What is the Difference between Life Insurance and ULIP?
|
[
{
"docid": "cdf68c6c26bc84f1100866f1718ccd61",
"text": "\"I would refer you to this question and answers. Here in the US we have two basic types of life insurance: term and whole life. Universal life is a marketing response to whole life being such a bad deal, and is whole life just not quite as bad. I am not familiar with the products in India, but given the acronym (ULIP), it is probably universal life, and as you describe is variable universal life. Likely Description \"\"Under the hood\"\", or in effect, you are purchasing a term life policy and investing excess premiums in a collection of stock mutual funds. This is a bad deal for a few reasons: A much better option is to buy \"\"level term insurance\"\" and invest on your own. You won't necessarily lose money, but you can make better financial decisions. It is good to invest, it is good to have life. A better decision would not to combine the two into a single product.\"",
"title": ""
},
{
"docid": "c47d75b3923268cd1d3b40d7db81126c",
"text": "ULIP insurance plan ULIP is Unit Linked Insurance Plan. The premium you pay, a small part goes towards covering life insurance. The Balance is invested into Stock Markets. Most ULIP would give you an option to choose from Debt Funds [100% safe buy low returns 5-7%] or Equity [High Risks, Returns can be around 15%]. Or a mix of both. ULIP are not a good way to save money. There are quite a few hidden fees that actually reduce the return. So notionally even if returns shown are great, in effect it is quite less. For example the premium you pay in first year, say Rs 10,000/- Rs 2,500/- goes towards commission. And say Rs 100 goes towards insurance. Balance Rs 7,400/- units are purchased in your account. Even if these grow by 20%, you are still in loss. Ofcousre, the commissions go down year after year and stop at 5%. Then there is fund management fees that you don't get to see. There is maintenance fee that is deduced from your balance. Thus the entire method of charging is not transparent. Life insurance from LIC There are broadly 2 types of Life Insurance plans Money Back / Endowment Plan. The concept here is again same, you pay a premium and part of it goes toward Insurance. The balance LIC invests in safe bonds. Every year a bonus is declared; generally less than Bank rate. At the end of the plan you get more than what you paid in premium. However if you had kept the same in Bank FD, you would have got more money back. So if you die, your nominee would get Insurance plus bonus. If you survive you get all the accumulated bonus. Pure Term Plan. Here the premium is quite less for the sum insured. Here if you die, your nominee would get insurance. If you survive you don't get anything.",
"title": ""
}
] |
[
{
"docid": "8883da34bb8dfe1b1945916c50d64449",
"text": "After some thought, I follow Dave Ramsey's advice because it's simple and I can do the math in my head - no online calculator needed. :) You need Life Insurance if someone depends on your income. You can replace your income with a single lump sum of 8-10 times your current income where those who need your income, can get roughly your salary each year from the life insurance proceeds.",
"title": ""
},
{
"docid": "c59ed3cf8ce44c1fe805db09b37a9cae",
"text": "I would like to add to the answer provided by Dheer. I think under some ULIPs you need not pay premium after 3 years and you can take the money back after 5 years (something like that, read your policy statement of course). Since the money is invested in Stock markets and since generally people say the longer money stays in stocks, the better; you can keep the money with them without taking it back and without paying any further premium. That way, whatever you paid will be invested and you can get it back later when you feel you will make a profit.",
"title": ""
},
{
"docid": "90e5c075808444b3079a84d19def23ea",
"text": "\"There is an economic, a social and a psychological side to the decision whether to buy insurance or not, and if yes, which one. Economically, as you say already in your question, an insurance is on average a net loss for the insured. The key word here is \"\"average\"\". If you know that there are many cancer cases in your family buy health insurance by all means; it's a sound investment. If you are a reckless driver make sure you have extensive coverage on your liability insurance. But absent such extra risks: Independently of somebody's wealth insurance should be limited to covering catastrophic events. What is often overlooked is that the insurance by all means should really cover those catastrophic events. For example the car liability minimums in many states are not sufficient. The typical upper middle class person could probably pay the 15k/30k/10k required in Arizona with a loan on their house; but a really catastrophic accident is simply not covered and would totally ruin that person and their family. Insuring petty damage is a common mistake: economically speaking, all insurances should have deductibles which are as high as one could afford to pay without feeling too much pain. That \"\"pain\"\" qualification has an economical and a social aspect. Of course any risk which materialized is an economical damage of some kind; perhaps now I can't buy the PS4, or the diamond ring, or the car, or the house, or the island which had caught my eye. I could probably do all these things, just perhaps without some extras, even if I had paid for insurance; so if I don't want to live with the risk to lose that possibility I better buy insurance. Another economical aspect is that the money may not be available without selling assets, possibly on short notice and hence not for the best price. Then an insurance fee takes the role of paying for a permanent backup credit line (and should not be more expensive than that). The social aspect is that even events which wouldn't strictly ruin a person might still force them to, say, sell their Manhattan penthouse (no more parties!) or cancel their country club membership. That is a social pain which is probably to be avoided. Another socioeconomic aspect is that you may have a relationship to the person selling you the insurance. Perhaps he buys his car at your dealership? Perhaps he is your golf buddy? Then the insurance may be a good investment. It is only borderline bad to begin with; any benefits move the line into the profit zone. The psychological aspect is that an insurance buys peace of mind, and that often seems to be the most important benefit. A dart hits the flat screen? Hey, it was insured. Junior totals the Ferrari? Hey, it was insured. Even if the house burns down having fire insurance will be a consolation.\"",
"title": ""
},
{
"docid": "8ebf8895d756efadd2bcca8f25f05605",
"text": "\"Does your new job include life insurance? Most \"\"professional\"\" positions *will*, making your old insurance a moot point. That said, even if the answer is \"\"no\"\", **and** you really, really need to maintain some level of term life (ie, newborn kid and unemployed spouse)... You would **still** want to shop around rather than just automatically converting your former employer's plan. \"\"Group\"\" is a nice-sounding way of saying \"\"the young and healthy subsidize the premiums of the old and sick\"\"; if you're not old and/or chronically unhealthy... You can probably do better on your own.\"",
"title": ""
},
{
"docid": "d1cd775ab6c813698080d89bc9f4762c",
"text": "Best is indeed subjective. You could for example, get a Universal Life Policy that pays a guaranteed interest on all monies (even those in excess of what you need to pay to cover the policy). Most people will tell you (probably correctly) that using life insurance as an investment vehicle is a bad idea, however. The growth of the money in a UL policy, however, is usually tax deductible and grows at a guaranteed rate. NWML here in the U.S. pays a guaranteed (unless they go broke I suppose) 4% per year; historically, however, they've been paying 6% per year. That's pretty good, except a lot of your money goes into buying the policy the first few years.",
"title": ""
},
{
"docid": "9923fcbf3827d405cbd89f1b2cbdfa15",
"text": "This is snarky, but I really consider life insurance only to be an investment for THE INSURANCE COMPANY, if you don't have dependents who will need the insurance in case you are hurt or die.",
"title": ""
},
{
"docid": "080d0f2b00d0613a800275de5fabfde1",
"text": "This greatly depends on the local laws and the insurance contract terms. If I remember correctly, my own life insurance policy does also have special terms in case I die within a year of applying, so it doesn't sound totally bogus. For car loan insurance, the amount of coverage and premiums were probably low enough for the insurer not to want to spend the money upfront on the thorough investigation, but they probably do have a clause that covers them in case the insured passes away unreasonably quickly (unreasonably for a healthy person of the given age, that is).",
"title": ""
},
{
"docid": "a5345be7d605b0afce14d92988730fc0",
"text": "Here's the issue with LTC and, really, underwritten insurance in general; no one has a crystal ball. Based on today's available rates where's the sweet spot to buy LTC? Probably right around the mid-60s, because you probably won't pay much in before you start gutting the carrier (assuming you can make it through underwriting in your mid-60s). The issue is, what happens when some life event changes your underwriting status? Would you rather buy prematurely or be excluded entirely? Those are generally your two options when it comes to individual LTC. The underwriting eligibility window on LTC is very narrow. There's a very very small space between the best possible underwriting and being flatly declined. Look for an LTC agent in your area. Likely someone in your circle of friends and family will know a reputable/knowledgeable insurance agent who can run up some quotes at various underwriting classes. Try to avoid looking at quotes for your age + 10 years to see what the quote will look like 10 years from now. 10 years from now the rate tables will be significantly different. Whether or not you should buy LTC now rather than waiting will depend on a whole host of other criteria. Personally, if I was 50 and my biggest health concern was improving my run time and LTC is on my mind, I'd just pick up a policy now while I will likely be in a preferred underwriting class rather than waiting and hoping my health doesn't betray me. Obviously I'm a stranger on the internet and none of this is actual advice. You should find an agent local to you and talk about your options and situation.",
"title": ""
},
{
"docid": "0c45aa34b381f4cfe0c4b3659be6854c",
"text": "In the context of this article, it's millions of dollars. But you're right, all life insurance is a scam, even if it's not always millions of dollars. My wife will not suffer financially if I die. She's a strong independent woman. She has a good career.",
"title": ""
},
{
"docid": "4f83b055c8965bd202ba0b44f6511546",
"text": "I am of the strong opinion that life insurance should be purchased as a term product and nothing more. The internal expense is usually high, the returns, poor and the product disclosure is often incomprehensible. The only purpose Cash Value Life Insurance serves, in my opinion, is to fund the retirement and college educations of those selling it.",
"title": ""
},
{
"docid": "0da87bbbb2cd4939439ab3133a692198",
"text": "A Certified Financial Planner has passed a licensing exam and will advise you and help you reach your financial goals. A good CFP can help you a lot, especially if you are unsure how to set up your insurance, investment, savings, and financial plans on your own. You do not need a CFP to get a life insurance policy. If you do get a CFP, he or she should help you above and beyond life insurance -- i.e. retirement planning, investment advice, education planning, etc. It's advantageous to you to pay a fixed price for services instead of a percentage or commission. Negotiate fees up front. For life insurance, in most cases a term policy will fit your needs. Whole life, universal life, etc., combine investments and life insurance into a single product and are big commission makers for the salesman. They make it sound like the best thing ever, so be aware. One of my rules of thumb is that, generally speaking, the larger the commission is for the salesperson, the worse the product is for the consumer. Welcome to life insurance pitches. Term life is far less expensive and provides a death benefit and nothing else. If you just had a baby and need to protect your family, for example, term life is often a good solution, easy to buy, and inexpensive. As you stated, any of the major providers will do just fine.",
"title": ""
},
{
"docid": "ddbbf8d6d4092253f402b9c9f87cdc87",
"text": "Some countries don't have robust life insurance markets. Some countries have horrible travel fatality statistics. Some countries don't have very good liability law enforcement. Is $2 on top of a train ticket in the US to send your family a $20,000 payment if you die on the train worth it, probably not. The fatality rate is pretty low here, lots of people have their own life insurance, and the US justice system carries a big liability stick. If you're moving around on trains a lot in other countries where the fatality rate is much higher, you can't buy life insurance on your own, and the legal system doesn't punish negligent operators it might be meaningful, especially for frequent travelers who have dependents. Is buying this coverage a reasonable and cost effective way to insure a person's life, no, clearly not. You're buying a policy to insure your life against being mauled by tiger in New York on a Tuesday, when you've never seen a tiger and don't live in New York. Obviously, if you want life insurance you would not buy coverage this narrow. Personally, I think this is really akin to an impulse buy candy bar at a checkout line of a market. They're dangling this in front of you for an amount of money that's insignificant because some people will pick it up without thinking about it. They're tickling your fear of death just enough to get a dollar from you, but not enough to keep you off the train. And obviously the math works out for the insurer or it would not be offered. Separately, regarding probability, it's not about an incident occurring in a train, it's an incident occurring in this particular train on this particular day/time. If there's a 1 in 10,000 chance of dying on a train in a year the chance of dying on a particular train on a particular day is likely to be one in billions or more. This really isn't about whether or not this coverage is valuable given the risk, it's about whether or not they can get you to impulsively spend a dollar.",
"title": ""
},
{
"docid": "89854b2a03b341b24944bb2af2a27fbf",
"text": "\"If I read your figures correctly, then the cost difference is negligible. ($1.84 difference) The main determining factor, I'd think, would be the coverage. Do you get more, or less, coverage now than you would if you went together on the same plan? You'd both be covered, but what is the cap? Plans, and employer contributions, change all the time. How is business in both of your companies? Are you likely to get cut? Are you able to get back into a plan at each of your employers if you quit the plan for a while? These rules may be unpleasant surprises if, say, your wife cancels her plan, goes on yours, and you lose your job. She may not be able to get back into her insurance immediately, or possibly not at all. A spouse losing a job isn't a \"\"qualifying life event\"\" the way marriage, birth of a child, divorce, etc., is.\"",
"title": ""
},
{
"docid": "c3dde80b95a519f0137d6062a6639fb0",
"text": "\"In the United States if the person insures an article and then claims a loss of that article, the insurance replaces the missing/destroyed article. If later on the item is found the original is owned by the insurance company. The person who purchased the policy doesn't get to keep both. Of course if the item was so valuable to be priceless the insurance company would be open to an exchange of items or money. But if they suspect fraud...then it becomes a legal matter. Even when a life isn't involved it can be a source of dispute: http://www.artnet.com/magazineus/news/spencer/spencers-art-law-journal5-7-10.asp INSURED V. INSURER: WHEN STOLEN ART IS RECOVERED, WHO OWNS IT? Kenneth S. Levine This essay is about the word \"\"subrogation,\"\" which frequently appears in insurance policies. An insured painting is stolen and the insurance company pays the owner’s claim for the value of the painting. Many years later, when the painting is recovered, its value is many times what it was when the insurance claim was paid. The insurance company takes the position that it owns the painting, while the owner says I own the painting, less the value of the insurance proceeds received. The resolution of this dispute depends on the meaning of the word \"\"subrogation\"\" in the insurance policy. When life insurance is involved, the item being replace is the lost stream of income. The question of returning money and how much would be a legal issue. They would also want to know if there was fraud, and who was involved.\"",
"title": ""
},
{
"docid": "2b59e313b2bc401e6df11ff9d5c37f02",
"text": "Both are incorrect. What it says is if your fund value is 25,000 in first year; then this will earn 19.4% compound for 5 years. This is same as 142.5 absolute. The money invested in second year, will only earn for 4 years, compound interest of 19.4%. so on ... The 25000 invested last year only 19.4 for a year. The other aspect you are missing is when you pay 25,000; 4% goes towards charges. So you are only investing 24,000. Plus there is an amount towards life cover. Depending on age, around 1000 for one lacs. This means the investment is only 23000 or 23500. Generally it is not advised to buy ULIP. It is cheaper to buy term insurance plus mutual fund.",
"title": ""
}
] |
fiqa
|
57de6591019cc8105739d1b27d234eb5
|
Why is the regulation of “swaps” important to failing systemically significant institutions?
|
[
{
"docid": "ea509faa7610649e8b47f1a783e5df83",
"text": "Have you ever considered how much faith and confidence play a role in the financial sector? The calling in of swaps could cause issues similar to a Bank Run, which may or may not involve others coming into play. While this is cleaning up the mess from a few years ago, there is something to be said for how complicated are various financial instruments in this situation. If you want something similar to ponder, what would make any institution be considered major and would this be agreed by various countries given how connected things are within the world? What makes an institution major in the United States may not be quite the same standards in Brazil and this where one has to consider how to maintain faith in the system that could unravel rather badly if everyone tries to cash out at the same time. The Bank Run link above is something to consider that could cause a bank that appears fine to suddenly have speculators cause more disruptions which isn't likely to help. The global credit markets aren't likely to freeze overnight and thus there can be the question how does this get handled if another mess could arise. The idea here is to set up the framework to prevent the panic that could lead to a global depression. The idea is to create for derivatives something similar to the stock market's trading curbs that exist to contain panic on a macro level. The psychology is quite important in figuring out how to handle the obligations of a company that was perceived to be infallible as well as making sure what is agreed works across various cultures and currencies.",
"title": ""
}
] |
[
{
"docid": "3319d52fc84138cb4f70fab880834812",
"text": "The Gramm-Leach-Bliley Act was not repealed, it was approved. I think you mean that the Gramm-Leach-Bliley Act, among other things, repealed what was left of the Galss-Steagal Act of 1933 (there was another by the same name on 1932). The issue is that soem regulations are enacted and some are repealed. The result during each of the last decades and by a big margin has been an increase of the regulations. And as I said by a big big margin. The rethoric of de-regulation is just political rethoric, it has not happened. Just check the government data. Now, it can happen that some regulations dont matter much and some others matter a lot, so checking the number or size of the regulations, while it describes a tendency, can also be deceiving. But again, since the debate over de-regulation is political they only focus on slogans and not on real analisys. So going back to the particular regulation you mention, the removal of Glass-Steagal Act was positive. If it had not been removed the crisis would have been far worse. If you are interested we can discuss why (I already wrote enough for one comment).",
"title": ""
},
{
"docid": "60c2a547453bd12714c0407a1b90c8ba",
"text": "\"The trouble is that everybody is afraid of the consequences of letting \"\"too big to fail\"\" fail. I contend that it would be painful, but we would be better off in the long run if we let those with bad economic practices go out of business instead of rewarding them. Edit: It is like the difference between having a necessary needle shot quickly and sharply painful or having it slowing inserted and pulled out multiple times which is the equivalent of what we are going through now.\"",
"title": ""
},
{
"docid": "b694223af98a9fc679eef5620ab4827d",
"text": "And I was being facetious, apologies. I think your assertion that the > entire crux of the story was that credit ratings agencies weren't transparent is a massive simplification of what happened. There are many great analyses of the crisis, and most of them come to the conclusion that 'it was a perfect storm' of different factors. I gather you think the problem was regulatory, I think the problem is systemic. To me it doesn't matter how the regulations are written what matters are the incentives. I see no evidence that the regulatory agencies in the US can effectively police, let alone effectively deter financial institutions from skirting the laws. In fact I think wall street runs on such a haystack of grey-area regulations that without wholesale, root and branch reform (e.g. antitrust laws similar to Standard Oil to be used on the big banks) there's no hope that any patchwork of regulations, well-intentioned as they may be, from making a difference. CDOs are a great example of what to avoid.",
"title": ""
},
{
"docid": "81d539aa9ad08b227eac9ea9b023162f",
"text": "[it was 15 to 1 before the SEC decided that big banks needed to be able to risk more.](http://en.wikipedia.org/wiki/Net_capital_rule) it also started teh distrust between banks. With 15 to 1 you were pretty sure that another bank you were dealing with was leveraged exactly 15 to 1. WHen he removed that requirement, then banks had a much harder time judging the health of other banks they were dealing with. you just didnt know if they were 20 to 1 or 30 to 1 or higher, without going through all their books. This was one of the main reasons the recession was so large in scope. Housing would have exploded eventually, but without the leverage regulations they were able to make it hurt far far far far far far worse.. several times worse.",
"title": ""
},
{
"docid": "caef27858c67e7b5f3c23fb8e269812a",
"text": "\"It's a problem from hell because all solutions have drawbacks/unintended consequences and because they are all pretty complex to implement in practice. Breaking up the big banks so that no bank is enough to bring down the economy with it is the strongest move, but is riddled with problems when you start looking at it practically. How do you determine the \"\"maximum size\"\" a bank should have? Should it be based on assets? Systemic importance (i.e. interconnectedness with other banks)? How do you enforce it? Banks will find ways to offload assets, etc. into special purpose corporations to get around the laws somehow. How do you compensate for the fact that size does help financial efficiency in some ways? Imposing higher capital requirements is the next solution. But that too is not so easy to implement with full success in practice. What should be classified as a low-risk asset? How much capital do you require against a CDO vs a Mexican government bond? How often do you need to revise these standards? At what point does the cost of higher capital requirements start to strangle lending and financial flows? The weaker maneuvers are things like constant government-imposed stress tests, orderly resolution mechanisms, higher standards for internal risk management practices, etc. but those may not be adequate and also have their implementation problems.\"",
"title": ""
},
{
"docid": "3fa1b9f9db8d49653b80b6c53f52ba52",
"text": "Thanks for the detailed reply. One thing that makes me furious is that whenever something screws up in other sectors (such as contaminated drugs, or a residential tower catching on fire), we always take necessary steps to prevent it from happening again. But for the financial sector, when they screw up there's this careless hand waving: Sorry, nothing could've prevented this... nothing can be done... perfect storm... market forces... those subprime mortgagors should've paid up... Like, seriously? We're just supposed to sit back and let it happen again and again? I never borrowed a cent from any bank in my life, yet I still got royally screwed by the recession in terms of where I am in my professional career. This goes for millions of other people too. Something needs to be done. Of course every regulation has its drawback, but as long as the benefit outweighs the detriment, I'm absolutely for it.",
"title": ""
},
{
"docid": "1d2ef6134c8df91c82d89d54361313c9",
"text": "\"This is the best tl;dr I could make, [original](http://www.imf.org/en/Publications/WP/Issues/2017/08/07/Cyber-Risk-Market-Failures-and-Financial-Stability-45104) reduced by 61%. (I'm a bot) ***** > Risk awareness has been increasing, firms actively manage cyber risk and invest in cybersecurity, and to some extent transfer and pool their risks through cyber liability insurance policies. > This paper considers the properties of cyber risk, discusses why the private market can fail to provide the socially optimal level of cybersecurity, and explore how systemic cyber risk interacts with other financial stability risks. > The paper concludes discussing policy measures that can increase the resilience of the financial system to systemic cyber risk. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6s97db/imfcyber_risk_market_failures_and_financial/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~185649 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **Risk**^#1 **cyber**^#2 **paper**^#3 **IMF**^#4 **financial**^#5\"",
"title": ""
},
{
"docid": "69980f8b29a899f4299b650eabfd8e83",
"text": "Um, wut? It took a failure for the SIFI to be defined in the first place. It took the failure of Lehman and Bear Stearns for the US goverments to actively attempt precluding *any more failures* of what were yet-to-be-called, SIFI's. Is this really such a hard concept to grasp? Largely unforeseen failure first, further failure avoidance second.",
"title": ""
},
{
"docid": "36f2fc77755e0aa798a2148136896264",
"text": "Proper enforcement of laws currently on the books that should have prevented a company like Citi from selling loans that violated their own underwriting standards would have knocked out a huge part of it. Banks would have been a lot less willing to give loans to people who couldn't afford them if they knew that they couldn't flip them on the secondary market.",
"title": ""
},
{
"docid": "e4c507a80e084edb607b3096f6e1e8cf",
"text": "It's a good answer. I was alluding to cryptocurrency such as bitcoin which was a pretty genius invention (blockchain and mining) to solve the honesty problem (counterparty risk) you outlined when there's no trusted middleman to help keep people honest. Sounds like a dodgy cat though!",
"title": ""
},
{
"docid": "4afc923685e57164cffc5f03708ccb5f",
"text": "You bet if it was so simple. This is when financial acumen comes into its true form. The bank would never ever want to go insolvent. What it does is, take insurance against the borrower defaulting. Remember the financial crisis of 2008 which was the outcome of borrowers defaulting. The banks had created derivatives based on the loans distributed. CDO, CDS are some of the simple derivatives banks sell to cover their backs in case of defaults. There are derivatives using these derivatives as underlyings which they then sold it across to other buyers including other banks. Google for Fabrice Tourre and you would realise how much deep the banks go to save themselves from defaulters. If everything fails then go to the government for help. That was what happened when the US government doled out $600 billion to save the financial sector.",
"title": ""
},
{
"docid": "4b4ac6d21b3e809e741841ba81cd1cf1",
"text": "This article is 100% incorrect. The governments main concern is to PREVENT depositors and tax payers from losing funds in the case of bank default. How? By having debt holders being forced to converted into equity to create a capital buffer to keep a bank solvent which will help protect depositors and prevent tax payers from having to bail the banks out. Please ask me more questions on this as I have done a lot of work on this topic as of late.",
"title": ""
},
{
"docid": "e16988806f89c839889d8bfdc0c81c17",
"text": "Say your bank gives you a loan at a fix interest rate. They can loan money themselves for a floating interest rate. So they try to find someone who will pay, or take, the difference between the fix and the floating interest rate on your loan. That's an interest rate swap and there is nothing evil about it per se. Derivatives are like knives, you can use them for live saving heart surgery or just butcher a kid in a back alley. The inherent danger lies in the fact that it is easier to create than to understand complex derivatives. This can lead to both sides believing they made on the derivative transaction, a logically impossible situation. Therefore it is always good when derivatives are traded in a transparent, well-regulated market, where current market price is determined. But then the expected profit margins are small, so investment bankers will always try to find more exotic derivatives (think of a blindfolded kid using chainsaws for brain surgery). We need standard derivatives or we have to re-think the whole finance world from grounds up, without any guarantee we'll find anything working any better. We don't need exotic derivatives, they're almost exclusively there because people shoot for bonuses.",
"title": ""
},
{
"docid": "20e4a5eb388c4491e671bc71b905befc",
"text": "\"What EU wanted to force Cyprus to do is to break the insurance contract the government has with the bank depositors. The parliament rightfully refused, and it didn't pass. In the EU, and Cyprus as part of it, all bank deposits are insured up to 100,000EUR by the government. This is similar to the US FDIC insurance. Thus, requiring the \"\"small\"\" (up to 100K) depositors to participate in the bank reorganization means that the government breaks its word to people, and effectively defaults. That is exactly what the Cyprus government wanted to avoid, the default, so I can't understand why the idea even came up. Depositors of more than 100k are not guaranteed against bank failures, and indeed - in Cyprus these depositors will get \"\"haircuts\"\". But before them, first come shareholders and bondholders who would be completely wiped out. Thus, first and foremost, those who failed (the bank owners) will be the first to pay the price. However, governments can default. This happened in many places, for example in Russia in the 90's, in Argentina in 2000's (and in fact numerous times during the last century), the US in the 1930's, and many other examples - you can see a list in Wikipedia. When government defaults on its debts, it will not pay some or all of them, and its currency may also be devaluated. For example, in Russia in 1998 the currency lost 70% of its value against the USD within months, and much of the cash at hands of the public became worthless overnight. In the US in 1933 the President issued an executive order forbidding private citizens keeping gold and silver bullions and coins, which resulted in dollar devaluation by about 30% and investors in precious metals losing large amounts of money. The executive order requiring surrender of the Treasury gold certificates is in fact the government's failure to pay on these obligations. While the US or Russia control their own currency, European countries don't and cannot devaluate the currency as they wish in order to ease their debts. Thus in Euro-zone the devaluation solutions taken by Russia and the US are not possible. Cyprus cannot devaluate its currency, and even if it could - its external debt would not likely to be denominated in it (actually, Russian debt isn't denominated in Rubles, that's why they forced restructuring of their own debt, but devaluating the currency helped raising the money from the citizens similarly to the US seizing the gold in 1930's). Thus, in case of Cyprus or other Euro-zone countries, direct taxes is the only way to raise money from the citizens. So if you're in a country that controls its own currency (such as the US, Russia, Argentina, etc) and especially if the debt is denominated in that currency (mainly the US) - you should be worried more of inflation than taxes. But if you're in the Euro-zone and your country is in troubles (which is almost any country in the zone) - you can expect taxes. How to avoid that? Deal with your elected officials and have them fix your economy, but know that you can't just \"\"erase\"\" the debt through inflation as the Americans can (and will), someone will have to pay.\"",
"title": ""
},
{
"docid": "e41ef4b9940ca49475e3d19f3ff89f56",
"text": "I understand what you mean, but for the general population the technicalities of secondary market is fundamentally a grey area. However, in my opinion, leading financial institutions such as GS, I expect them to make prudent decisions that is both ethical & sustainable for the society as whole, even though it might not be feasible all the time.",
"title": ""
}
] |
fiqa
|
8b5199f3038ba3d190f5efbd20ca4ed0
|
Are U.S. salaries typically measured/reported before tax, or after tax?
|
[
{
"docid": "ba19a7c6c0f5420aa8416ae37c2b4dd9",
"text": "\"In the U.S., virtually all salaries are expressed as \"\"gross salaries\"\", which are before the taxes that the individual must pay on their income. The numbers shown in the links are almost certainly gross salary figures. However, the \"\"gross salary\"\" is not the entire \"\"total compensation\"\" number, which is the total value of all compensation and benefits that the employee receives for his work. Total compensation includes not only salary and bonuses, but the cost or value of any employer-paid healthcare, retirement, company car, expense account, stock options, and other valuable goods or services. That's still not the total amount of money the company has to pay to have you; there are employer-paid payroll taxes totaling 6.2% of your gross salary, plus practical costs like the cost of your computer, cubicle or office furniture, and the portion of utility costs that keep you well-lit, clean and comfortable. This complete number is called \"\"total employee cost\"\", and the general rule of thumb is that it's double your gross cash compensation (salary + bonuses). Lastly, $100k in California isn't worth as much, in real terms, as $100k in other parts of the U.S. The cost of living in California, especially in Silicon Valley where the majority of the people who make six figures by being C++ programmers are located, is ridiculously expensive. There are other tech hubs in the U.S., like DFW, Austin TX, Atlanta GA, St Louis MO, Raleigh NC, etc where people earn less, but also spend less to live and so can use more of their salary in a \"\"discretionary\"\" manner.\"",
"title": ""
}
] |
[
{
"docid": "2000c00b0ece2e565896854fd2dd26fe",
"text": "Everyone pays their personal income tax with funds from their employer; some of it through withholding, and the rest through the balance due at the time of filing. All that is happening here is that the company is calculating your personal tax return for you, and fiddling retroactively with the gross salary to yield a specific after-tax salary. One problem is that there is a lot of information I put in my return to earn deductions, that I would not care to tell my employer. The system would also appear to be contrary to public policy. Governments create tax deductions to give a larger income to those with socially acceptable expenses: health care, dependents, etc. The system you describe would give employees with such deductions a lower gross salary.",
"title": ""
},
{
"docid": "04b97a83bcb4ed2eba9355dafbdea597",
"text": "The tax is depended upon state where you are registered and the salary paid. More here If you employ contract you need not pay tax.",
"title": ""
},
{
"docid": "c7a7211d3254b4fafbb25b85d82701e5",
"text": "Your federal taxes in US include the tax which Indian government wants back from you under the treaty with US government. Some countries have treaty with US where all the money person earns in US can be reclaimed at the end of the financial year i.e no money goes to the country of citizenship. However, Indian citizens working in US are not liable for 100% reclaim on their federal tax.",
"title": ""
},
{
"docid": "d576f8479bbb1c76bf7bc1d479b5a3ed",
"text": "In Sri Lanka, this is the normal practice. We, employees are free from the burden of paying tax for the income we get as a salary. Because that part is been taken care of by the company/employer.",
"title": ""
},
{
"docid": "caf5c4379954fbdcf10d0bc39778f4e7",
"text": "This often occurs because of misrepresentation of the corporation income. Most of the income in the US is payed at or a little below the 35% rate... But when the figure is calculated non-US income is counted alongside US income. For some reason, in the US it makes sense for corporations to pay income taxes in the countries they actually made the income in AND the US. Mind you... Only USA and Eritrea have this sort of backwards thinking. So yeah... If they make $100 worldwide income, out of which $50 is US income, and the company reports $15 in US taxes, they get represented as paying 15% effective tax rate when in reality they payed 30% on US taxes for their US income.",
"title": ""
},
{
"docid": "a5710a9517113ced432ead99b5b195a7",
"text": "Corporations are taxed on their profits. Multinational corporations can report their profits in any country they have operations, regardless of where they made the sale. In other words, it's impossible to nail down exactly where a company 'made it's money'. So the US doesn't try, we just tax them on earnings everywhere, minus taxes paid elsewhere. edit for clarity",
"title": ""
},
{
"docid": "b0992d59448c5eaa6d92c0e650239d38",
"text": "The withholding tax is considerred income tax that is submitted early. Note that the above withholding tax amounts are only estimates, which you will show on your tax return as taxes already remitted. Taxtips website",
"title": ""
},
{
"docid": "46174727fde8715497b6c2f70e2c5bd2",
"text": "Bingo. Measuring income is an ignorant approach. Buying power is the only thing that is important. If the $14/hr minimum wage nonsense ever actually happened, all the reports would be on how awesome it is that some small percentage of people are making more money. What won't be reported right away is how all people (include those minimum wage workers) have significantly less buying power thanks to the significant inflation created by $14 minimum wage.",
"title": ""
},
{
"docid": "15a3ce075535c30d8b619174f5cd06e6",
"text": "Salaries and etc are a business expense and chargeable against revenue for tax purposes. It is NOT tax deductible but it is an expense on an income statement in calculating net profit (after tax). You could say salary & etc are tax effective but not tax deductible.",
"title": ""
},
{
"docid": "23083ab56262b5603c80b430fa069869",
"text": "There are two problems with your understanding: The companies I have worked for match based on a percentage of your salary. That is a percentage of your gross pay. It was not based on the percentage of your net pay or after-tax pay. Net pay would be too hard to know. What I mean is the amount of insurance, HSA, Flex spending accounts, etc. determine how much is taxable and thus what is your after-tax pay . In fact if you split between the Roth and Pre-tax forms of the 401K your retirement contribution would influence the amount of the after tax contribution. All matching funds no matter the nature of the contribution (pre-tax, post-tax, Roth) are always considered pre-tax. You didn't pay taxes on the money when it was credited to your account.",
"title": ""
},
{
"docid": "d1b3d85e0259ff79c5fcce5e2a24ff6c",
"text": "I assume the OP is the US and that he is, like most people, a cash-basis tax payer and not an accrual basis tax payer. Suppose the value of the rental of the unit the OP is occupying was reported as income on the OP's 2010 and 2011 W-2 forms but the corresponding income tax was not withheld. If the OP correctly transcribed these income numbers onto his tax returns, correctly computed the tax on the income reported on his 2010 and 2011 1040 forms, and paid the amount due in timely fashion, then there is no tax or penalty due for 2010 and 2011. Nor is the company entitled to withhold tax on this income for 2010 and 2011 at this time; the tax on that income has already been paid by the OP directly to the IRS and the company has nothing to do with the matter anymore. Suppose the value of the rental of the unit the OP is occupying was NOT reported as income on the OP's 2010 and 2011 W-2 forms. If the OP correctly transcribed these income numbers onto his tax returns, correctly computed the tax on the income reported on his 2010 and 2011 1040 forms, and paid the amount due in timely fashion, then there is no tax or penalty due for 2010 and 2011. Should the OP have declared the value of the rental of the unit as additional income from his employer that was not reported on the W-2 form, and paid taxes on that money? Possibly, but it would be reasonable to argue that the OP did nothing wrong other than not checking his W-2 form carefully: he simply assumed the income numbers included the value of the rental and copied whatever the company-issued W-2 form said onto his 1040 form. At least as of now, there is no reason for the IRS to question his 2010 and 2011 returns because the numbers reported to the IRS on Copy A of the W-2 forms match the numbers reported by the OP on his tax returns. My guess is that the company discovered that it had not actually declared the value of the rental payments on the OP's W-2 forms for 2010 and 2011 and now wants to include this amount as income on subsequent W-2 forms. Now, reporting a lump-sum benefit of $38K (but no actual cash) would have caused a huge amount of income tax to need to be withheld, and the OP's next couple of paychecks might well have had zero take-home pay as all the money was going towards this tax withholding. Instead, the company is saying that it will report the $38K as income in 78 equal installments (weekly paychecks over 18 months?) and withhold $150 as the tax due on each installment. If it does not already do so, it will likely also include the value of the current rent as a benefit and withhold tax on that too. So the OP's take-home pay will reduce by $150 (at least) and maybe more if the current rental payments also start appearing on the paychecks and tax is withheld from them too. I will not express an opinion on the legality of the company withholding an additional $150 as tax from the OP's paycheck, but will suggest that the solution proposed by the company (have the money appear as taxable benefits over a 78-week period, have tax withheld, and declare the income on your 2012, 2013 and 2014 returns) is far more beneficial to the OP than the company declaring to the IRS that it made a mistake on the 2010 and 2011 W-2's issued to the OP, and that the actual income paid was higher. Not only will the OP have to file amended returns for 2010 and 2011 but the company will need to amend its tax returns too. In summary, the OP needs to know that He will have to pay taxes on the value of the waived rental payments for 2010 and 2011. The company's mistake in not declaring this as income to the OP for 2010 and 2011 does not absolve him of the responsibility for paying the taxes What the company is proposing is a very reasonable solution to the problem of recovering from the mistake. The alternative, as @mhoran_psprep points out, is to amend your 2010 and 2011 federal and state tax returns to declare the value of the rental during those years as additional income, and pay taxes (and possibly penalties) on the additional amount due. This takes the company completely out of the picture, but does require a lot more work and a lot more cash now rather than in the future.",
"title": ""
},
{
"docid": "45390f1ecd215cbde66ecaa8e7578bd6",
"text": "\"Gifts given and received between business partners or employers/employees are treated as income, if they are beyond minimal value. If your boss gives you a gift, s/he should include it as part of your taxable wages for payroll purposes - which means that some of your wages should be withheld to cover income, social security, and Medicare taxes on it. At the end of the year, the value of the gift should be included in Box 1 (wages) of your form W-2. Assuming that's the case, you don't need to do anything special. A 1099-MISC would not be appropriate because you are an employee of your boss - so the two of you need to address the full panoply of employment taxes, not just income tax, which would be the result if the payment were reported on 1099-MISC. If the employer wants to cover the cost to you of the taxes on the gift, they'll need to \"\"gross up\"\" your pay to cover it. Let's say your employer gives you a gift worth $100, and you're in a 25% tax bracket. Your employer has to give you $125 so that you end up with a gain of $100. But the extra $25 is taxable, too, so your employer will need to add on an extra $6.25 to cover the 25% tax on the $25. But, wait, now we've gotta pay 25% tax on the $6.25, so they add an extra $1.56 to cover that tax. And now they've gotta pay an extra $.39 . . . The formula to calculate the gross-up amount is: where [TAX RATE] is the tax rate expressed as a percentage. So, to get the grossed-up amount for a $100 gift in a 25% bracket, we'd calculate 1/(1-.25), or 1/.75, or 1.333, multiply that by the target gift amount of $100, and end up with $133.33. The equation is a little uglier if you have to pay state income taxes that are deductible on the federal return but it's a similar principle. The entire $133.33 would then be reported as income, but the net effect on the employee is that they're $100 richer after taxes. The \"\"gross-up\"\" idea can be quite complicated if you dig into the details - there are some circumstances where an additional few dollars of income can have an unexpected impact on a tax return, in a fashion not obvious from looking at the tax table. If the employer doesn't include the gift in Box 1 on the W-2 but you want to pay taxes on it anyway, include the amount in Line 7 on the 1040 as if it had been on a W-2, and fill out form 8919 to calculate the FICA taxes that should have been withheld.\"",
"title": ""
},
{
"docid": "47c9c8dbbbfb64b9537ec5a36e9cc724",
"text": "\"What theyre fishing for is whether the money was earned in the U.S. It's essentially an interest shelter, and/or avoiding double taxation. They're saying if you keep income you make outside the US in a bank inside the US, the US thanks you for storing your foreign money here and doesn't tax the interest (but the nation where you earned that income might). There is no question that the AirBNB income is \"\"connected with a US trade or business\"\". So your next question is whether the fraction of interest earned from that income can be broken out, or whether IRS requires you to declare all the interest from that account. Honestly given the amount of tax at stake, it may not be worth your time researching. Now since you seem to be a resident nonresident alien, it seems apparent that whatever economic value you are creating to earn your salary, is being performed in the United States. If this is for an American company and wages paid in USD, no question, that's a US trade or business. But what if it's for a Swedish company running on Swedish servers, serving Swedes and paid in Kroner to a Swedish bank which you then transfer to your US bank? Does it matter if your boots are on sovereign US soil? This is a complex question, and some countries (UK) say \"\"if your boots are in our nation, it is trade/income in our nation\"\"... Others (CA) do not. This is probably a separate question to search or ask. To be clear, the fact that your days as a teacher or trainee do not count toward residency, is a separate question from whether your salary as same counts as US income.\"",
"title": ""
},
{
"docid": "dfc4e7cf8eff047240f97d396ad67be3",
"text": "> Posted tax rates vs actual effective rates differ, but you know that. Yeah, but correct me if I'm wrong here, but aren't the allowable deductions which can drag the actual rate down only applicable for stuff that happens inside the US? Therefore, wouldn't any foreign sourced income always be taxed at the marginal rate? Also, the US still has high actual rates too. [It's not exactly like other countries don't have the concept of deductions as well.](http://taxfoundation.org/sites/default/files/docs/sr195.pdf)",
"title": ""
},
{
"docid": "d938cfa19603cd76c60ccc1bc2fa74d2",
"text": "I was looking for ideas on what the usual figures are in such positions. Something like market value, or other terms such as changing slab percentages in compensation. Not sure what the best practices are in this situation. Not sure what you are referring to.",
"title": ""
}
] |
fiqa
|
29c7ba1f41b19799099e182ea3a37fb1
|
What is a “closed-end fund”? How is a closed-end fund different from a typical mutual fund?
|
[
{
"docid": "134de673a4f035e8dc6161165f501759",
"text": "A closed-end fund is a collective investment scheme that is closed to new investment once the fund starts operating. A typical open-ended fund will allow you to buy more shares of the fund anytime you want and the fund will create those new shares for you and invest your new money to continue growing assets under management. A closed-end fund only using the initial capital invested when the fund started operating and no new shares are typically created (always exception in the financial community). Normally you buy and sell an open-end fund from the fund company directly. A closed-end fund will usually be bought and sold on the secondary market. Here is some more information from Wikipedia Some characteristics that distinguish a closed-end fund from an ordinary open-end mutual fund are that: Another distinguishing feature of a closed-end fund is the common use of leverage or gearing to enhance returns. CEFs can raise additional investment capital by issuing auction rate securities, preferred shares, long-term debt, and/or reverse-repurchase agreements. In doing so, the fund hopes to earn a higher return with this excess invested capital.",
"title": ""
}
] |
[
{
"docid": "b4edc4c5604999faf7ba4fa4c1f99c4d",
"text": "Behind the scenes, mutual funds and ETFs are very similar. Both can vary widely in purpose and policies, which is why understanding the prospectus before investing is so important. Since both mutual funds and ETFs cover a wide range of choices, any discussion of management, assets, or expenses when discussing the differences between the two is inaccurate. Mutual funds and ETFs can both be either managed or index-based, high expense or low expense, stock or commodity backed. Method of investing When you invest in a mutual fund, you typically set up an account with the mutual fund company and send your money directly to them. There is often a minimum initial investment required to open your mutual fund account. Mutual funds sometimes, but not always, have a load, which is a fee that you pay either when you put money in or take money out. An ETF is a mutual fund that is traded like a stock. To invest, you need a brokerage account that can buy and sell stocks. When you invest, you pay a transaction fee, just as you would if you purchase a stock. There isn't really a minimum investment required as there is with a traditional mutual fund, but you usually need to purchase whole shares of the ETF. There is inherently no load with ETFs. Tax treatment Mutual funds and ETFs are usually taxed the same. However, capital gain distributions, which are taxable events that occur while you are holding the investment, are more common with mutual funds than they are with ETFs, due to the way that ETFs are structured. (See Fidelity: ETF versus mutual funds: Tax efficiency for more details.) That having been said, in an index fund, capital gain distributions are rare anyway, due to the low turnover of the fund. Conclusion When comparing a mutual fund and ETF with similar objectives and expenses and deciding which to choose, it more often comes down to convenience. If you already have a brokerage account and you are planning on making a one-time investment, an ETF could be more convenient. If, on the other hand, you have more than the minimum initial investment required and you also plan on making additional regular monthly investments, a traditional no-load mutual fund account could be more convenient and less expensive.",
"title": ""
},
{
"docid": "c67b26d48377b74b8f3413e9368ceb5b",
"text": "Mutual funds buy (and sell) shares in companies in accordance with the policies set forth in their prospectus, not according to the individual needs of an investor, that is, when you invest money in (or withdraw money from) a mutual fund, the manager buys or sells whatever shares that, in the manager's judgement, will be the most appropriate ones (consistent with the investment policies). Thus, a large-cap mutual fund manager will not buy the latest hot small-cap stock that will likely be hugely profitable; he/she must choose only between various large capitalization companies. Some exchange-traded funds are fixed baskets of stocks. Suppose you will not invest in a company X as a matter of principle. Unless a mutual fund prospectus says that it will not invest in X, you may well end up having an investment in X at some time because the fund manager bought shares in X. With such an ETF, you know what is in the basket, and if the basket does not include stock in X now, it will not own stock in X at a later date. Some exchange-traded funds are constructed based on some index and track the index as a matter of policy. Thus, you will not be investing in X unless X becomes part of the index because Standard or Poor or Russell or somebody changed their minds, and the ETF buys X in order to track the index. Finally, some ETFs are exactly like general mutual funds except that you can buy or sell ETF shares at any time at the price at the instant that your order is executed whereas with mutual funds, the price of the mutual fund shares that you have bought or sold is the NAV of the mutual fund shares for that day, which is established based on the closing prices at the end of the trading day of the stocks, bonds etc that the fund owns. So, you might end up owning stock in X at any time based on what the fund manager thinks about X.",
"title": ""
},
{
"docid": "3ac3e8aebe0e7a8e86731ab7190d5925",
"text": "How do (index and active) mutual funds trade? Do they buy stocks as soon as a I buy a share in the mutual fund, or do they have fixed times they trade, such as once every week/month/quarter? Is it theoretical possible for someone to front run mutual funds, if someone holds individual stocks? Let's say an institutional investor creates an order of $100m in a mutual fund, how likely can a broker, which holds a fraction of the fund's portfolio, front run and take advantage of that trade? It is more likely to front run that fund if it's an active small cap fund, but how likely is it to front run trades for index funds?",
"title": ""
},
{
"docid": "3cd8c165d5a3432ca97e0bc8d9c44877",
"text": "The issue with trading stocks vs. mutual funds (or ETFs) is all about risk. You trade Microsoft you now have a Stock Risk in your portfolio. It drops 5% you are down 5%. Instead if you want to buy Tech and you buy QQQ if MSFT fell 5% the QQQs would not be as impacted to the downside. So if you want to trade a mutual fund, but you want to be able to put in stop sell orders trade ETFs instead. Considering mutual funds it is better to say Invest vs. Trade. Since all fund families have different rules and once you sell (if you sell it early) you will pay a fee and will not be able to invest in that same fund for x number of days (30, 60...)",
"title": ""
},
{
"docid": "04f3a1490966002444e5a4cb61978175",
"text": "Imagine that a fund had a large exit load that declined over several years. If you wanted to sell some or all of your investment in that fund you would face a large fee, unless you held it a long time. You would be hesitant to sell because waiting longer would save you money. That is the exact opposite of a liquid investment. Therefore the ideal level for a liquid fund is to have zero exit load.",
"title": ""
},
{
"docid": "7a2e015368c0e58fe28b560c29c9ef5f",
"text": "\"Ask your trading site for their definition of \"\"ETF\"\". The term itself is overloaded/ambiguous. Consider: If \"\"ETF\"\" is interpreted liberally, then any fund that trades on a [stock] exchange is an exchange-traded fund. i.e. the most literal meaning implied by the acronym itself. Whereas, if \"\"ETF\"\" is interpreted more narrowly and in the sense that most market participants might use it, then \"\"ETF\"\" refers to those exchange-traded funds that specifically have a mechanism in place to ensure the fund's current price remains close to its net asset value. This is not the case with closed-end funds (CEFs), which often trade at either a premium or a discount to their underlying net asset value.\"",
"title": ""
},
{
"docid": "f22e794d25699e76013708b1fc5884b6",
"text": "Not according to the SEC: A mutual fund is an SEC-registered open-end investment company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined securities and assets the mutual fund owns are known as its portfolio, which is managed by an SEC-registered investment adviser. Each mutual fund share represents an investor’s proportionate ownership of the mutual fund’s portfolio and the income the portfolio generates. And further down: Mutual funds are open-end funds.",
"title": ""
},
{
"docid": "5dbae56ad4aca8a1caeb2c6a7ab08472",
"text": "\"Your question is one of semantics. ETFs and mutual funds have many things in common and provide essentially the same service to investors with minimal differences. It's reasonably correct to say \"\"An ETF is a mutual fund that...\"\" and then follow up with some stuff that is not true of a typical mutual fund. You could do the same with, for example, a hedge fund. \"\"A hedge fund is a mutual fund that doesn't comply with most SEC regulations and thus is limited to accredited investors.\"\" As a matter of practice, when people say \"\"mutual fund\"\" they are talking about traditional mutual funds and pretty much never including ETFs. So is an ETF a mutual fund as the word is commonly used? No.\"",
"title": ""
},
{
"docid": "38e505ae3b54ac00a1e741f8acea09d0",
"text": "\"It costs money for a mutual fund to accept your money. It doesn't cost as much as it used to, but historically there has been, at a minimum, a modicum of record-keeping associated with it. As such, they will typically have a minimum amount of money they want you to add at a time. They don't want to process 100 transfers of a nickel each; that would be silly. So if you have a mutual fund with a \"\"minimum initial investment\"\" of $10,000 and a \"\"minimum subsequent investment\"\" of $100, then that means that you can put in $10k to open it, and then deposit dollars in lots of 100 or more whenever you feel like it.\"",
"title": ""
},
{
"docid": "1d7415e57f6fb728475f29326f504f12",
"text": "\"This answer is applicable to the US. Similar rules may hold in some other countries as well. The shares in an open-ended (non-exchange-traded) mutual fund are not traded on stock exchanges and the \"\"market\"\" does not determine the share price the way it does for shares in companies as brokers make offers to buy and sell stock shares. The price of one share of the mutual fund (usually called Net Asset Value (NAV) per share) is usually calculated at the close of business, and is, as the name implies, the net worth of all the shares in companies that the fund owns plus cash on hand etc divided by the number of mutual fund shares outstanding. The NAV per share of a mutual fund might or might not increase in anticipation of the distribution to occur, but the NAV per share very definitely falls on the day that the distribution is declared. If you choose to re-invest your distribution in the same fund, then you will own more shares at a lower NAV per share but the total value of your investment will not change at all. If you had 100 shares currently priced at $10 and the fund declares a distribution of $2 per share, you will be reinvesting $200 to buy more shares but the fund will be selling you additional shares at $8 per share (and of course, the 100 shares you hold will be priced at $8 per share too. So, you will have 100 previous shares worth only $800 now + 25 new shares worth $200 for a total of 125 shares at $8 = $1000 total investment, just as before. If you take the distribution in cash, then you still hold the 100 shares but they are worth only $800 now, and the fund will send you the $200 as cash. Either way, there is no change in your net worth. However, (assuming that the fund is is not in a tax-advantaged account), that $200 is taxable income to you regardless of whether you reinvest it or take it as cash. The fund will tell you what part of that $200 is dividend income (as well as what part is Qualified Dividend income), what part is short-term capital gains, and what part is long-term capital gains; you declare the income in the appropriate categories on your tax return, and are taxed accordingly. So, what advantage is there in re-investing? Well, your basis in those shares has increased and so if and when you sell the shares, you will owe less tax. If you had bought the original 100 shares at $10 and sell the 125 shares a few years later at $11 and collect $1375, you owe (long-term capital gains) tax on just $1375-$1200 =$175 (which can also be calculated as $1 gain on each of the original 100 shares = $100 plus $3 gain on the 25 new shares = $175). In the past, some people would forget the intermediate transactions and think that they had invested $1000 initially and gotten $1375 back for a gain of $375 and pay taxes on $375 instead. This is less likely to occur now since mutual funds are now required to report more information on the sale to the shareseller than they used to in the past. So, should you buy shares in a mutual fund right now? Most mutual fund companies publish preliminary estimates in November and December of what distributions each fund will be making by the end of the year. They also usually advise against purchasing new shares during this period because one ends up \"\"buying a dividend\"\". If, for example, you bought those 100 shares at $10 on the Friday after Thanksgiving and the fund distributes that $2 per share on December 15, you still have $1000 on December 15, but now owe taxes on $200 that you would not have had to pay if you had postponed buying those shares till after the distribution was paid. Nitpickers: for simplicity of exposition, I have not gone into the detailed chronology of when the fund goes ex-dividend, when the distribution is recorded, and when cash is paid out, etc., but merely treated all these events as happening simultaneously.\"",
"title": ""
},
{
"docid": "793ccb71f403b6df10f6d9e5aeef7d72",
"text": "Bond ETFs are just another way to buy a bond mutual fund. An ETF lets you trade mutual fund shares the way you trade stocks, in small share-size increments. The content of this answer applies equally to both stock and bond funds. If you are intending to buy and hold these securities, your main concerns should be purchase fees and expense ratios. Different brokerages will charge you different amounts to purchase these securities. Some brokerages have their own mutual funds for which they charge no trading fees, but they charge trading fees for ETFs. Brokerage A will let you buy Brokerage A's mutual funds for no trading fee but will charge a fee if you purchase Brokerage B's mutual fund in your Brokerage A account. Some brokerages have multiple classes of the same mutual fund. For example, Vanguard for many of its mutual funds has an Investor class (minimum $3,000 initial investment), Admiral class (minimum $10,000 initial investment), and an ETF (share price as initial investment). Investor class has the highest expense ratio (ER). Admiral class and the ETF generally have much lower ER, usually the same number. For example, Vanguard's Total Bond Market Index mutual fund has Investor class (symbol VBMFX) with 0.16% ER, Admiral (symbol VBTLX) with 0.06% ER, and ETF (symbol BND) with 0.06% ER (same as Admiral). See Vanguard ETF/mutual fund comparison page. Note that you can initially buy Investor class shares with Vanguard and Vanguard will automatically convert them to the lower-ER Admiral class shares when your investment has grown to the Admiral threshold. Choosing your broker and your funds may end up being more important than choosing the form of mutual fund versus ETF. Some brokers charge very high purchase/redemption fees for mutual funds. Many brokers have no ETFs that they will trade for free. Between funds, index funds are passively managed and are just designed to track a certain index; they have lower ERs. Actively managed funds are run by managers who try to beat the market; they have higher ERs and tend to actually fall below the performance of index funds, a double whammy. See also Vanguard's explanation of mutual funds vs. ETFs at Vanguard. See also Investopedia's explanation of mutual funds vs. ETFs in general.",
"title": ""
},
{
"docid": "daccd8ca0d17624588d8df91bea8c332",
"text": "One advantage not pointed out yet is that closed-end funds typically trade on stock exchanges, whereas mutual funds do not. This makes closed-end funds more accessible to some investors. I'm a Canadian, and this particular distinction matters to me. With my regular brokerage account, I can buy U.S. closed-end funds that trade on a stock exchange, but I cannot buy U.S. mutual funds, at least not without the added difficulty of somehow opening a brokerage account outside of my country.",
"title": ""
},
{
"docid": "e6ff181f6984f73fd45717d9330d42c4",
"text": "Mutual funds don't work like stocks in that way. The price of a mutual fund is set at the end of each day and doesn't fluctuate during the day. So no matter when you put in your order, it will be filled at the end of the day at whatever the closing price is for that day. Here is some good information on that There is no continuous pricing of fund shares throughout the trading day. When an investor places an order to buy or sell a fund's shares, the order is executed based on the NAV calculated at the end of that trading day, regardless of what time during the day the order was placed. On the other hand, if the investor were to check the price of his or her fund shares halfway through the business day, the price quoted would be the previous day's NAV because that was the last time the fund calculated and reported the value. -http://www.finweb.com/investing/how-mutual-funds-are-priced.html",
"title": ""
},
{
"docid": "1591690bb979c2f47dd02263ca7e3b83",
"text": "\"This is another semantics question. Again what matters is how the words are commonly used, as the usage came about long before the technical definitions. In this case, when people say \"\"mutual fund,\"\" they are often including both unit investment trusts and closed end funds. Despite the labels the SEC has given in order to differentiate them, I'd say it's common (typical) practice to think of a closed-end fund as a type of mutual fund, rather than a different category altogether. That's the way I've seen it used, anyway.\"",
"title": ""
},
{
"docid": "fabea6350f01303b2b65be7350ad13c9",
"text": "Also, when they mean SP500 fund - it means that fund which invests in the top 500 companies in the SP Index, is my understanding correct? Yes that is right. In reality they may not be able to invest in all 500 companies in same proportion, but is reflective of the composition. I wanted to know whether India also has a company similar to Vanguard which offers low cost index funds. Almost all mutual fund companies offer a NIFTY index fund, both as mutual fund as well as ETF. You can search for index fund and see the total assets to find out which is bigger compared to others.",
"title": ""
}
] |
fiqa
|
315c5c36755dad663d377fbefe581cca
|
What to know before purchasing Individual Bonds?
|
[
{
"docid": "f6ac2bcc59fee8f3220b9dbae3fc484a",
"text": "\"A few points that I would note: Call options - Could the bond be called away by the issuer? This is something to note as some bonds may end up not being as good as one thought because of this option that gets used. Tax considerations - Are you going for corporate, Treasury, or municipals? Different ones may have different tax consequences to note if you aren't holding the bond in a tax-advantaged account,e.g. Roth IRA, IRA or 401k. Convertible or not? - Some bonds are known as \"\"convertibles\"\" since the bond comes with an option on the stock that can be worth considering for some kinds of bonds. Inflation protection - Some bonds like TIPS or series I savings bonds can have inflation protection built into them that can also be worth understanding. In the case of TIPS, there are principal adjustments while the savings bond will have a change in its interest rate. Default risk - Some of the higher yield bonds may have an issuer go under which is another way one may end up with equity in a company rather than getting their money back. On the other side, for some municipals one could have the risk of the bond not quite being as good as one thought like some Detroit bonds that may end up in a different result given their bankruptcy but there are also revenue bonds that may not meet their target for another situation that may arise. Some bonds may be insured though this requires a bit more research to know the credit rating of the insurer. As for the latter question, what if interest rates rise and your bond's value drops considerably? Do you hold it until maturity or do you try to sell it and get something that has a higher yield based on face value?\"",
"title": ""
}
] |
[
{
"docid": "3f8851d458841a55b140337c80cb1702",
"text": "\"The first thing that it is important to note here is that the examples you have given are not individual bond prices. This is what is called the \"\"generic\"\" bond price data, in effect a idealised bond with the indicated maturity period. You can see individual bond prices on the UK Debt Management Office website. The meaning of the various attributes (price, yield, coupon) remains the same, but there may be no such bond to trade in the market. So let's take the example of an actual UK Gilt, say the \"\"4.25% Treasury Gilt 2019\"\". The UK Debt Management Office currently lists this bond as having a maturity date of 07-Mar-2019 and a price of GBP 116.27. This means that you will pay 116.27 to purchase a bond with a nominal value of GBP 100.00. Here, the \"\"nominal price\"\" is the price that HM Treasury will buy the bond back on the maturity date. Note that the title of the bond indicates a \"\"nominal\"\" yield of 4.25%. This is called the coupon, so here the coupon is 4.25%. In other words, the treasury will pay GBP 4.25 annually for each bond with a nominal value of GBP 100.00. Since you will now be paying a price of GBP 116.27 to purchase this bond in the market today, this means that you will be paying 116.27 to earn the nominal annual interest of 4.25. This equates to a 3.656% yield, where 3.656% = 4.25/116.27. It is very important to understand that the yield is not the whole story. In particular, since the bond has a nominal value of GBP100, this means that as the maturity date approaches the market price of the bond will approach the nominal price of 100. In this case, this means that you will witness a loss of capital over the period that you hold the bond. If you hold the bond until maturity, then you will lose GBP 16.27 for each nominal GBP100 bond you hold. When this capital loss is netted off the interest recieved, you get what is called the gross redemption yield. In this case, the gross redemption yield is given as approximately 0.75% per annum. NB. The data table you have included clearly has errors in the pricing of the 3 month, 6 month, and 12 month generics.\"",
"title": ""
},
{
"docid": "96cec02c99cd390afdf4af6154c169c1",
"text": "\"So after you've learned about bonds, you might find yourself learning about interest rates. You might, in fact, discover that there's no such thing as a \"\"correct\"\" interest rate, or even a true \"\"market\"\" interest rate. PS We already had the housing bubble. It has come, and gone. What *new* bubble are you referring to?\"",
"title": ""
},
{
"docid": "09dbc013a2c9df18506d12e2075fb6a0",
"text": "As you are 14, you cannot legally buy premium bonds yourself. Your parents could buy them and hold them for you, mind you. That said, I'm not a fan of premium bonds. They are a rather weird combination of a savings account and a lottery. Most likely, you'll receive far less than the standard interest rate you'd get from a savings account. Sure, they may pay off, but they probably won't. What I would suggest, given that you expect to need the money in five years, is simply place it in a savings account. Shop around for the best interest rate you can find. This article lists interest rates, though you'll want to confirm that it is up to date. There are other investment options. You could invest in a mutual fund which tracks the stock market or the bond market, for example. On average, that'll give you a higher rate of return. But there's more risk, and as you want the money in five years, I'd be uncomfortable recommending that at this time. If you were looking at investing for 25 years, that'd be a no-brainer. But it's a bit risky for 5 years. Your investment may go down, and that's not something I'd have been happy with when I was 14. There may be some other options specific to the UK which I don't know about. If so, hopefully someone else will chime in.",
"title": ""
},
{
"docid": "d6f5042870c1a4aa59de7578bdc238f6",
"text": "> The purpose of buying these bonds was not to step in due to the absence of a market. Rather, the purpose was to deliberately bid up the price of these bonds (ahead of the market), causing their price to rise and yields (interest rates) to drop. There are some important things you need to understand about bubbles and how they form. When interest rates are artificially low and down payments aren't required for many loans, do you agree this is a recipe for a bubble?",
"title": ""
},
{
"docid": "c1abc18736c5ab5314bf49da7f5ab4ea",
"text": "Without providing direct investment advice, I can tell you that bond most assuredly are not recession-proof. All investments have risk, and each recession will impact asset-classes slightly differently. Before getting started, BONDS are LOANS. You are loaning money. Don't ever think of them as anything but that. Bonds/Loans have two chief risks: default risk and inflation risk. Default risk is the most obvious risk. This is when the person to whom you are loaning, does not pay back. In a recession, this can easily happen if the debtor is a company, and the company goes bankrupt in the recessionary environment. Inflation risk is a more subtle risk, and occurs when the (fixed) interest rate on your loan yields less than the inflation rate. This causes the 'real' value of your investment to depreciate over time. The second risk is most pronounced when the bonds that you own are government bonds, and the recession causes the government to be unable to pay back its debts. In these circumstances, the government may print more money to pay back its creditors, generating inflation.",
"title": ""
},
{
"docid": "f4b2fc93da9a9d7f5c1bc8869a4c706f",
"text": "For most people, you don't want individual bonds. Unless you are investing very significant amounts of money, you are best off with bond funds (or ETFs). Here in Canada, I chose TDB909, a mutual fund which seeks to roughly track the DEX Universe Bond index. See the Canadian Couch Potato's recommended funds. Now, you live in the U.S. so would most likely want to look at a similar bond fund tracking U.S. bonds. You won't care much about Canadian bonds. In fact, you probably don't want to consider foreign bonds at all, due to currency risk. Most recommendations say you want to stick to your home country for your bond investments. Some people suggest investing in junk bonds, as these are likely to pay a higher rate of return, though with an increased risk of default. You could also do fancy stuff with bond maturities, too. But in general, if you are just looking at an 80/20 split, if you are just looking for fairly simple investments, you really shouldn't. Go for a bond fund that just mirrors a big, low-risk bond index in your home country. I mean, that's the implication when someone recommends a 60/40 split or an 80/20 split. Should you go with a bond mutual fund or with a bond ETF? That's a separate question, and the answer will likely be the same as for stock mutual funds vs stock ETFs, so I'll mostly ignore the question and just say stick with mutual funds unless you are investing at least $50,000 in bonds.",
"title": ""
},
{
"docid": "478cdde040cedfb6e01af7f6e8296744",
"text": "I looked into the investopedia one (all their videos are mazing), but that detail just was not clear to me, it also makes be wonder, if a country issues bonds to finance itself, what happens at maturity when literally millions of them need to be paid? The income needs to have grown to that level or it defaults? Wouldn't all the countries default if that was the case, or are bonds being issued to being able to pay maturity of older bonds already? (I'm freaking myself out by realizing this)",
"title": ""
},
{
"docid": "1856f12fa004f6ee1b1d9889a4827b0d",
"text": "Bonds by themselves aren't recession proof. No investment is, and when a major crash (c.f. 2008) occurs, all investments will be to some extent at risk. However, bonds add a level of diversification to your investment portfolio that can make it much more stable even during downturns. Bonds do not move identically to the stock market, and so many times investing in bonds will be more profitable when the stock market is slumping. Investing some of your investment funds in bonds is safer, because that diversification allows you to have some earnings from that portion of your investment when the market is going down. It also allows you to do something called rebalancing. This is when you have target allocation proportions for your portfolio; say 60% stock 40% bond. Then, periodically look at your actual portfolio proportions. Say the market is way up - then your actual proportions might be 70% stock 30% bond. You sell 10 percentage points of stocks, and buy 10 percentage points of bonds. This over time will be a successful strategy, because it tends to buy low and sell high. In addition to the value of diversification, some bonds will tend to be more stable (but earn less), in particular blue chip corporate bonds and government bonds from stable countries. If you're willing to only earn a few percent annually on a portion of your portfolio, that part will likely not fall much during downturns - and in fact may grow as money flees to safer investments - which in turn is good for you. If you're particularly worried about your portfolio's value in the short term, such as if you're looking at retiring soon, a decent proportion should be in this kind of safer bond to ensure it doesn't lose too much value. But of course this will slow your earnings, so if you're still far from retirement, you're better off leaving things in growth stocks and accepting the risk; odds are no matter who's in charge, there will be another crash or two of some size before you retire if you're in your 30s now. But when it's not crashing, the market earns you a pretty good return, and so it's worth the risk.",
"title": ""
},
{
"docid": "10bc3540ae3ca68042d92856ce19fd30",
"text": "What can you give them as security? 1. A fixed/floating charge over assets 2. Negative covenants/Non-subordination agreements 3. Real Mortgage 4. Chattel Mortgage 5. Personal or inter-business Guarantees Essentially a bond is just a debt agreement, it is when you sell standardised bonds over a market that regulation comes into it. Now I am from Australia, so I can't comment on US policies etc...",
"title": ""
},
{
"docid": "acd9a181cdb5204856ef8ff054d77951",
"text": "A bond fund has a 5% yield. You can take 1/.05 and think of it as a 20 P/E. I wouldn't, because no one else does, really. An individual bond has a coupon yield, and a YTM, yield to maturity. A bond fund or ETF usually won't have a maturity, only a yield.",
"title": ""
},
{
"docid": "94ca39ebe5195ff60e6057e66b8c62a6",
"text": "Since you seem to be interested in investing in individual stocks, this answer will address that. As for the general question of investing, the answer that @johnfx gave is just about as good as it gets. Investing in individual stocks is extremely risky and takes a LOT of work to do right. On top of the fairly obvious need to research a stock before you buy, there is the matter of keeping up with the stocks to know when you need to sell as well as myriad other facets of investing. Paid professionals spend all day, every day, doing this and they have a hard time beating an index fund. Unless you take the time to educate yourself and are willing to continually put in a good bit of effort, I would advise you to stay away from individual stocks and rely on mutual funds.",
"title": ""
},
{
"docid": "84e47b81c35727ec73c7b526568e29b0",
"text": "Buy a fund of bonds, there are plenty and are registered on your stockbroker account as 'funds' rather than shares. Otherwise, to the individual investor, they can be considered as the same thing. Funds (of bonds, rather than funds that contain property or shares or other investments) are often high yield, low volatility. You buy the fund, and let the manager work it for you. He buys bonds in accordance to the specification of the fund (ie some funds will say 'European only', or 'global high yield' etc) and he will buy and sell the bonds regularly. You never hold to maturity as this is handled for you - in many cases, the manager will be buying and selling bonds all the time in order to give you a stable fund that returns you a dividend. Private investors can buy bonds directly, but its not common. Should you do it? Up to you. Bonds return, the company issuing a corporate bond will do so at a fixed price with a fixed yield. At the end of the term, they return the principal. So a 20-year bond with a 5% yield will return someone who invests £10k, £500 a year and at the end of the 20 years will return the £10k. The corporate doesn't care who holds the bond, so you can happily sell it to someone else, probably for £10km give or take. People say to invest in bonds because they do not move much in value. In financially difficult times, this means bonds are more attractive to investors as they are a safe place to hold money while stocks drop, but in good times the opposite applies, no-one wants a fund returning 5% when they think they can get 20% growth from a stock.",
"title": ""
},
{
"docid": "8396ac0417d62417654544d160748d93",
"text": "Well the only way you can actually legally do a bond issuance is through a broker dealer. In order to register and actually sell the securities to outside investors, you need a registered representative at a registered broker dealer. This falls under blue sky laws. You LEGALLY have to have one. Also, why would you prefer to issue? I mean public debt offerings are massive undertakings (hence why I said unless no one is pitching you, why do it). For example, as a first time issuer, you would have to register with the SEC, every state you plan to issue in, submit historical AUDITED financials, comply with SOX and other accounting filings, bring in due diligence, go on roadshows, etc. This stuff costs A LOT of time and money. For example, since you've never issued before, if you're cooking the books and the bankers don't catch it they can be legally liable for fraud. Also, how much are you even trying to raise?",
"title": ""
},
{
"docid": "eb75d87bb9c96b01960de628a1a4bd1e",
"text": "\"Junk Bonds (aka High Yield bonds) are typically those bonds from issues with credit ratings below BBB-. Not all such companies are big risks. They are just less financially sound than other, higher rated, companies. If you are not comfortable doing the analysis yourself, you should consider investing in a mutual fund, ETF, or unit trust that invests in high yield bonds. You get access to \"\"better quality\"\" issues because a huge amount of the debt markets goes to the institutional channels, not to the retail markets. High yield (junk) bonds can make up a part of your portfolio, and are a good source of regular income. As always, you should diversify and not have everything you own in one asset class. There are no real rules of thumb for asset allocation -- it all depends on your risk tolerance, goals, time horizon, and needs. If you don't trust yourself to make wise decisions, consult with a professional whom you trust.\"",
"title": ""
},
{
"docid": "580b87fa9582f0ad27639ac85955d59a",
"text": "\"Looking at the list of bonds you listed, many of them are long dated. In short, in a rate rising environment (it's not like rates can go much lower in the foreseeable future), these bond prices will drop in general in addition to any company specific events occurred to these names, so be prepared for some paper losses. Just because a bond is rated highly by credit agencies like S&P or Moody's does not automatically mean their prices do not fluctuate. Yes, there is always a demand for highly rated bonds from pension funds, mutual funds, etc. because of their investment mandates. But I would suggest looking beyond credit ratings and yield, and look further into whether these bonds are secured/unsecured and if secured, by what. Keep in mind in recent financial crisis, prices of those CDOs/CLOs ended up plunging even though they were given AAA ratings by rating agencies because some were backed by housing properties that were over-valued and loans made to borrowers having difficulties to make repayments. Hence, these type of \"\"bonds\"\" have greater default risks and traded at huge discounts. Most of them are also callable, so you may not enjoy the seemingly high yield till their maturity date. Like others mentioned, buying bonds outright is usually a big ticket item. I would also suggest reviewing your cash liquidity and opportunity cost as oppose to investing in other asset classes and instruments.\"",
"title": ""
}
] |
fiqa
|
f273a4efe2ee1802b3aff627c2de3fbb
|
Is there any way to attach a statement of explanation while submitting a tax return electronically using Free Fillable Forms?
|
[
{
"docid": "35b4bc35852564eaf1c6c9c733d6082b",
"text": "\"Depending on what you need to explain, you can submit your electronic return without the supplemental information and subsequently mail a Form 8453 with the additional information. This is helpful for form 8489, for example, where you need to list every transaction reported by your stock broker on a 1099-B. See https://www.irs.gov/pub/irs-pdf/f8453.pdf for more details on this form. If the information you need to submit an attachment for doesn't follow one of the options on that form, you will likely need to file a paper return or use a paid tax preparation service/application. Limitations of FreeFile are explained here, along with a list of forms that are available: https://www.irs.gov/uac/List-of-Available-Free-File-Fillable-Forms The \"\"Attaching Statements\"\" and \"\"Write-in information\"\" sections seem like they might apply to your situation. Attaching Statements - If you need to add statements and you can't use Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, to mail that information, you will not be able to use this program to efile your return Identity Protection PIN's (IP PIN) - This program only supports the entry of a Primary taxpayer's IP PIN. If the spouse or dependents have an IP PIN, you cannot use this program to efile the return. Writing In Information - Your ability to \"\"write in\"\" additional information to explain an entry is generally limited to the 1040 forms and some of the more frequently submitted forms. If you need to write in additional information on a form, other than the 1040 series, you may not be able to use this program to efile your tax return. E-filing Forms - To efile forms, (except Form 4868) they must be attached to a 1040 series form (1040, 1040A or 1040EZ). Form Limitations - There may be Known Limitations of forms you plan to complete. Please review them. A form limitation may keep you from completing or e-filing your return.\"",
"title": ""
}
] |
[
{
"docid": "c980bab86b11f8a11a08b697e3987cf5",
"text": "The I-9 form is required because you are working. It is kept by the employer as proof that you have the proper documents to work. If the government was to inspect their records they can be fined if they don't have those document, in fact they have to keep them for several years after your employment is done. A w-4 form is a federal tax form. There also was probably a state version of the form. When you completed the w-4 it is used by your employer to determine how much in taxes need to be withheld. Employers don't know your tax situation. Even though you are on work study, you still could have made enough money over the summer to pay taxes. But if this is your only job, and you will not make enough money to have to pay taxes, you can fill out the form as exempt. That means that last year you didn't make enough money to have to pay taxes, and you don't expect to make enough to have to pay taxes this year. If you are exempt, no federal income tax will be withheld. They might still withhold for social security and medicare. The state w-4 can also be used to be exempt from state taxes. If they withhold any income taxes you have to file one of the 1040 tax forms to get that income tax money back. You will have to do so for the state income tax withholding. A note about social security and medicare. If you have an on campus job, at the campus you attend, during the school year; they don't withhold money for social security and medicare. That law applies to students on work study jobs, and on non-work-study jobs. for single dependents the federal threshold where you must file is: > You must file a return if any of the following apply. Your gross income was more than the larger of— a. $1,000, or b. Your earned income (up to $5,850) plus $350.",
"title": ""
},
{
"docid": "8d0726e7822140462fdaf8646b5ac184",
"text": "\"It is very helpful to understand that Free File is not actually \"\"by\"\" the US Internal Revenue Service (IRS). The IRS does indeed offer access to the program through their website, but Free File is actually a public-private partnership program operated and maintained by the Free File Alliance. Who is the Free File Alliance? Well, according to their members list: 1040NOW Corp., Drake Enterprises, ezTaxReturn.com, FileYourTaxes, Free Tax Returns, H&R Block, Intuit, Jackson Hewitt, Liberty Tax, OnLine Taxes, TaxACT, TaxHawk, and TaxSlayer. Why the income restriction? Well, that's part of the deal the IRS struck - the program is \"\"dedicated to helping 70 percent of American taxpayers prepare and e-file their federal tax returns\"\". Technically the member companies are offering their own software to handle tax preparation, and the rule is that 70% of American's must 'qualify' for at least one product, so this adjusted gross income limit changes periodically so that 70% of the population can use it. Why restrict it at all? This was part of the give and take involved in negotiation with the businesses involved. If the program was \"\"everyone files for free\"\", then it is presumed that many reputable businesses that make the program valuable would choose not to continue to participate. In other words, they want to be able to not give away their services for free to customers who are - at least by income definition - more than capable of paying them. The IRS has said it does not want to be in the tax prep software business, so they are not offering their own free software to do the job that private companies would otherwise charge for. However, there are other restrictions to being in the program - like the fact that no business in the program can offer \"\"refund anticipation loans\"\", offer commercial services more than a certain amount of times (so they can't hound you to upgrade), and so on. Some businesses were making a killing off these, though they are pretty much solely developed to be predatory on people with the lowest incomes (and education levels, and IQ, and with cognitive disabilities, and basically anyone they could sucker into paying what were effectively absurd rates for short term loans along with inflated filing/preparation fees). Finally, Free File was partly developed as an initiative to increase the amount of digitally filed taxes and reduce the paper-based burdens of accepting and processing turns. In other words: to cut government costs, not to be a government welfare program. Even if it were, one can generally obtain commercial software for $30-$100, so the benefit to those above gross income levels is pretty minor; yearly costs to file taxes with such software for those payers would be less than 0.001% of their yearly expenses. Compared to the benefits obtainable by households living below the poverty line, fighting to cover an extra 5-30% of the population at the potential expense of having the whole program be a failure probably seemed like a more than worthwhile trade-off.\"",
"title": ""
},
{
"docid": "f468352bff9034dc8d747feea06a9d3c",
"text": "\"I know nothing about this stuff. Am I in trouble? You might be. If you don't file your return the IRS may \"\"make up\"\" one for you based on the (partial) information they have. Then they'll assess taxes and penalties and will go after you to pay those. Will I be hit with interest/penalties? You may if any money is owed. You may also lose the refund if you wait for too long (3 years after the due date). You may also be hit with the penalties for non-filing/late filing by your State. Not owing to IRS doesn't mean you also don't owe to the State - you can get hit with interest and late payment penalties there too. He has all my paperwork (I probably have copies... somewhere...) Should I go somewhere else and start fresh? He must return all the original paperwork you gave him. He can be disbarred if he doesn't. If you did 2013 yourself - what was significantly different in 2012 that you couldn't do yourself? If nothing - then just do it yourself and be done with it. You can buy 2012 preparation software at very deep discounts now. Otherwise - yes, go somewhere else. Busy season is over and it shouldn't be difficult to find another preparer/EA/CPA to do the work for you.\"",
"title": ""
},
{
"docid": "925928cbba365a3c9a5f6a9aab4fb112",
"text": "There are ways to avoid having federal income taxes withheld: In order to avoid withholding altogether, you’ll have to fall into both of the following categories: you have no tax liability this year and you had no tax liability in the previous tax season, so all of the federal income tax you paid was given back to you. Generally, you can say you have no tax liability when you’re not required to file an income tax return or you owe zero taxes. You may also be able to claim an exemption if your earned income for the year is extremely low ($1,050 or less). If those conditions apply to you, you can write “exempt” in line 7. Keep in mind that the exemption only eliminates your federal income taxes, not your Medicare or Social Security. If your parents use an accountant to prepare their taxes, I'm sure he/she would be able to give you a solid answer on how to fill it out.",
"title": ""
},
{
"docid": "b4bdf77bd6c433338ae2798676b50331",
"text": "\"There are many people who have deductions far above the standard deduction, but still don't itemize. That's their option even though it comes at a cost. It may be foolish, but it's not illegal. If @littleadv citation is correct, the 'under penalty of perjury' type issue, what of those filers who file a Schedule A but purposely leave off their donations? I've seen many people discuss charity, and write that they do not want to benefit in any way from their donation, yet, still Schedule A their mortgage and property tax. Their returns are therefore fraudulent. I am curious to find a situation in which the taxpayer benefits from such a purposeful oversight, or, better still, a cited case where they were charged with doing so. I've offered advice on filings return that wasn't \"\"truthful\"\". When you own a stock and cannot find cost basis, there are times that you might realize the basis is so low that just entering zero will cost you less than $100 in extra tax. You are not truthful, of course, but this kind of false statement isn't going to lead to any issue. If it gets noticed within an audit, no agent is going to give it more than a moment of time and perhaps suggest, \"\"you didn't even know the year it was bought?\"\" but there would be no consequence. My answer is for personal returns, I'm sure for business, accuracy to the dollar is actually important.\"",
"title": ""
},
{
"docid": "097521db220e281281b9e1ab8b2be1a0",
"text": "\"Does her dad still have the records from those tax years? If so, I would suggest using those as a basis and if they're complete, just filing them directly. If we're talking about software recommendations, I would suggest GenuTax as it allows for completing returns all the way back to 2003 without buying separate versions. Alternatively, there are some no-cost options. See the Wikipedia entry Comparison of Canadian-tax preparation software for personal use. Look both at the \"\"Price\"\" column and at the \"\"Freebies\"\" column. You should start at 2006 and move forward so you can keep track of carry-forward amounts. I'm assuming your girlfriend had no balance owing from those years as she was a student so there's no penalty to worry about.\"",
"title": ""
},
{
"docid": "c93f3024d8d4bde48399c1dabe42032b",
"text": "\"I've done various side work over the years -- computer consulting, writing, and I briefly had a video game company -- so I've gone through most of this. Disclaimer: I have never been audited, which may mean that everything I put on my tax forms looked plausible to the IRS and so is probably at least generally right, but it also means that the IRS has never put their stamp of approval on my tax forms. So that said ... 1: You do not need to form an LLC to be able to claim business expenses. Whether you have any expenses or not, you will have to complete a schedule C. On this form are places for expenses in various categories. Note that the categories are the most common type of expenses, there's an \"\"other\"\" space if you have something different. If you have any property that is used both for the business and also for personal use, you must calculate a business use percentage. For example if you bought a new printer and 60% of the time you use it for the business and 40% of the time you use it for personal stuff, then 60% of the cost is tax deductible. In general the IRS expects you to calculate the percentage based on amount of time used for business versus personal, though you are allowed to use other allocation formulas. Like for a printer I think you'd get away with number of pages printed for each. But if the business use is not 100%, you must keep records to justify the percentage. You can't just say, \"\"Oh, I think business use must have been about 3/4 of the time.\"\" You have to have a log where you write down every time you use it and whether it was business or personal. Also, the IRS is very suspicious of business use of cars and computers, because these are things that are readily used for personal purposes. If you own a copper mine and you buy a mine-boring machine, odds are you aren't going to take that home to dig shafts in your backyard. But a computer can easily be used to play video games or send emails to friends and relatives and lots of things that have nothing to do with a business. So if you're going to claim a computer or a car, be prepared to justify it. You can claim office use of your home if you have one or more rooms or designated parts of a room that are used \"\"regularly and exclusively\"\" for business purposes. That is, if you turn the family room into an office, you can claim home office expenses. But if, like me, you sit on the couch to work but at other times you sit on the couch to watch TV, then the space is not used \"\"exclusively\"\" for business purposes. Also, the IRS is very suspicious of home office deductions. I've never tried to claim it. It's legal, just make sure you have all your ducks in a row if you claim it. Skip 2 for the moment. 3: Yes, you must pay taxes on your business income. If you have not created an LLC or a corporation, then your business income is added to your wage income to calculate your taxes. That is, if you made, say, $50,000 salary working for somebody else and $10,000 on your side business, then your total income is $60,000 and that's what you pay taxes on. The total amount you pay in income taxes will be the same regardless of whether 90% came from salary and 10% from the side business or the other way around. The rates are the same, it's just one total number. If the withholding on your regular paycheck is not enough to cover the total taxes that you will have to pay, then you are required by law to pay estimated taxes quarterly to make up the difference. If you don't, you will be required to pay penalties, so you don't want to skip on this. Basically you are supposed to be withholding from yourself and sending this in to the government. It's POSSIBLE that this won't be an issue. If you're used to getting a big refund, and the refund is more than what the tax on your side business will come to, then you might end up still getting a refund, just a smaller one. But you don't want to guess about this. Get the tax forms and figure out the numbers. I think -- and please don't rely on this, check on it -- that the law says that you don't pay a penalty if the total tax that was withheld from your paycheck plus the amount you paid in estimated payments is more than the tax you owed last year. So like lets say that this year -- just to make up some numbers -- your employer withheld $4,000 from your paychecks. At the end of the year you did your taxes and they came to $3,000, so you got a $1,000 refund. This year your employer again withholds $4,000 and you paid $0 in estimated payments. Your total tax on your salary plus your side business comes to $4,500. You owe $500, but you won't have to pay a penalty, because the $4,000 withheld is more than the $3,000 that you owed last year. But if next year you again don't make estimated payment, so you again have $4,000 withheld plus $0 estimated and then you owe $5,000 in taxes, you will have to pay a penalty, because your withholding was less than what you owed last year. To you had paid $500 in estimated payments, you'd be okay. You'd still owe $500, but you wouldn't owe a penalty, because your total payments were more than the previous year's liability. Clear as mud? Don't forget that you probably will also owe state income tax. If you have a local income tax, you'll owe that too. Scott-McP mentioned self-employment tax. You'll owe that, too. Note that self-employment tax is different from income tax. Self employment tax is just social security tax on self-employed people. You're probably used to seeing the 7-whatever-percent it is these days withheld from your paycheck. That's really only half your social security tax, the other half is not shown on your pay stub because it is not subtracted from your salary. If you're self-employed, you have to pay both halves, or about 15%. You file a form SE with your income taxes to declare it. 4: If you pay your quarterly estimated taxes, well the point of \"\"estimated\"\" taxes is that it's supposed to be close to the amount that you will actually owe next April 15. So if you get it at least close, then you shouldn't owe a lot of money in April. (I usually try to arrange my taxes so that I get a modest refund -- don't loan the government a lot of money, but don't owe anything April 15 either.) Once you take care of any business expenses and taxes, what you do with the rest of the money is up to you, right? Though if you're unsure of how to spend it, let me know and I'll send you the address of my kids' colleges and you can donate it to their tuition fund. I think this would be a very worthy and productive use of your money. :-) Back to #2. I just recently acquired a financial advisor. I can't say what a good process for finding one is. This guy is someone who goes to my church and who hijacked me after Bible study one day to make his sales pitch. But I did talk to him about his fees, and what he told me was this: If I have enough money in an investment account, then he gets a commission from the investment company for bringing the business to them, and that's the total compensation he gets from me. That commission comes out of the management fees they charge, and those management fees are in the same ballpark as the fees I was paying for private investment accounts, so basically he is not costing me anything. He's getting his money from the kickbacks. He said that if I had not had enough accumulated assets, he would have had to charge me an hourly fee. I didn't ask how much that was. Whew, hadn't meant to write such a long answer!\"",
"title": ""
},
{
"docid": "515cac347b79164568f47a9217d27f65",
"text": "You can print them on any IRS-approved paper, you don't have to use pre-printed forms. The IRS publishes specifications for paper that is approved for use for these kinds of forms (109*, W*, etc). Here's the reason why it is important: Even the slightest deviation can result in incorrect scanning, and may affect money amounts reported for employees. Note that some portions of these forms are in different color (1099-MISC copy A). This is important, and using incorrect color will affect the IRS OCR mechanisms. Forms for individuals are less complicated with regards to technical specifications, because individuals must file them, and as such any complication will unnecessarily burden the citizenry. All the 109*, W* etc forms are not legally required to be filed by all citizens. You're only required to file them if you chose to do business, or chose to employ others. As such, using professional software and special forms is a cost of doing your business, and not a tax as it would be had it been mandatory to everyone. Mistakes in individual forms due to OCR failure or something else will be noticed by the taxpayers (less/more refund, etc) or through the internal matching and cross-check. However, forms 109* and W* feed that matching and cross-check system and are considered source of truth by it, and as such their processing must be much more reliable and precise.",
"title": ""
},
{
"docid": "f619287f122a1fed98a90cb002e70017",
"text": "\"According to this link http://taxes.lovetoknow.com/federal-income-tax/w9-tax-form: The very last line on the personal information section refers to \"\"account numbers.\"\" Here, the taxpayer lists any accounts they have with the IRS to pay back taxes or pre-payments for anticipated tax liability obligations. This information is optional and is inapplicable in many situations.\"",
"title": ""
},
{
"docid": "d1513d548321287b8b1ab7d6ac433981",
"text": "\"Buried on the IRS web site is the \"\"Fillable Forms Error Search Tool\"\". Rather than including an explanation of errors in the rejection email itself, you're expected to copy and paste the error email into this form, which gives more details about what's wrong. (Don't blame me; I didn't design it.) If I copy your error message in, here's the response I get: There is an error with the “primary taxpayer’s Date of Birth” in Step 2 Section 4. The date of birth that was entered does not match IRS records. Make sure you enter the correct birth date, in the correct format, in the correct space. Scroll down, and enter the current date (“Today’s date”). Today’s date is the day you intend to e-file the return again. Also, if you are making an electronic payment you must re-date that section. E-File your return. You say that you've already checked your birthday, so I don't know as this is particularly helpful. If you're confident that it's correct and in the right place, I think your next step needs to be contacting the IRS directly. They have a link at the bottom of the error lookup response on how to contact them specifically about their solution not working, or you could try contacting your local IRS office or giving them a call.\"",
"title": ""
},
{
"docid": "3d9c8dbf8694baed687215cd80101a02",
"text": "The IRS instructions do not specify how to connect the forms, just that you should not staple the check to the form (likely because it goes to a different location for processing). I have always either stapled or paper-clipped them together, however I would assume that the receiving department does not care, otherwise it would be explicit in the instructions.",
"title": ""
},
{
"docid": "e13974d259cda98754292d466271b891",
"text": "For filling out the W8-BEN form, please refer to the instructions in the document named: Instructions for Form W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting",
"title": ""
},
{
"docid": "0df54c4fd766fcffc01e0aaeb445237d",
"text": "The IRS allows filers to attach a statement explaining the reason for late filing. I have had clients do this in the past, and there has never been an issue (not that that guarantees anything, but is still good to know). Generally, the IRS is much more lenient when a taxpayer voluntarily complies with a filing requirement, even if it's late, than if they figure it out themselves and send a notice.",
"title": ""
},
{
"docid": "c5473f78e89bb5a997d4a8fd639073f8",
"text": "I'm glad keshlam and Bobby mentioned there are free tools, both from the IRS and private software companies. Also search for Volunteer Income Tax Assistance (VITA) in your area for individual help with your return. A walk-in tax clinic strength is tax preparation. CPAs and EAs provide a higher level of service. For example, they compile and review your prior year's return and your current year, although that is not relevant to your current situation. EAs and CPAs are allowed to represent you before the IRS. They can directly meet or contact the IRS and navigate audits and other requests on your behalf. Outside of tax season, an accountant can help you with tax planning and other taxable events. Some people do not hire a CPA or EA until they need representation. Establishing a relationship and familiarity with an accountant now can save time and money if you do anticipate you will need representation later. Part of what makes the tax code complicated is it can use very specific definitions of a common word. Furthermore, the specific definition of a phrase or word can change between publications. Also, the tax code uses all-encompassing definitions and provide detailed and lengthy lists that are not exhaustive; you may not find your situation listed or described in the tax code, yet you are responsible for reporting your taxable events. The best software cannot navigate you through your tax situation like an accountant. Lastly, some of the smartest people I have met are accountants and to get the most out of meeting with them you should be as familiar as possible with your position. The more familiar you are with accounting, the more advanced knowledge they can share with you. In short, you will probably need an accountant when: You need to explain yourself before the IRS (representation), you are encountering varying definitions in the tax code that have an impact on your return, or you have important economic activities that you are unsure of appropriate tax treatment.",
"title": ""
},
{
"docid": "afc5870704081a05228f2b6e1386741a",
"text": "From the IRS web site: So if your income was reported to the IRS (by the payer, not you) using one of the forms above, the IRS would have a record of it, regardless of whether you filed a tax return or not.",
"title": ""
}
] |
fiqa
|
f89e712e6910a2461d74720f69d5353d
|
What size “nest egg” should my husband and I have, and by what age?
|
[
{
"docid": "dd95be1f34ff8792c8faad39fb544908",
"text": "I would focus first on maxing out your RRSPs (or 401k) each year, and once you've done that, try to put another 10% of your income away into unregistered long term growth savings. Let's say you're 30 and you've been doing that since you graduated 7 years ago, and maybe you averaged 8% p.a. return and an average of $50k per year salary (as a round number). I would say you should have 60k to 120k in straight up investments around age 30. If that's the case, you're probably well on your way to a very comfortable retirement.",
"title": ""
},
{
"docid": "057595d71fcc3a46333f370d3b3bddcf",
"text": "There's a bit of working backwards that's required. This is a summary of a spreadsheet I wrote which helps to get to the answer. What you see here is that at age 25, one might have saved about a half year's salary, assuming they worked 5 years. The numbers grow exponentially to at 65, about 15 years salary saved. This will allow a withdrawal of about 60% final income each year using the 4% guideline. More will come from Social Security in the States to get closer to 100%. The sheet start with assumptions, a 10% per year rate of saving, and an 8% annual return. Salary is assumed to rise 3% per year. One can choose their age, enter their current numbers and their own assumptions. I had to include some numbers and at the time, 8% seemed reasonable. Not so sure today. What I do like is the concept of viewing savings in terms of 'years salary' as this leads to replacement rate. Will $1M be enough for you? Only you can answer that. But the goal of 80-100% replacement income is reasonable and this sheet can be used to understand the goals along the way. (note, the uploaded sheet had 15% saving rate, not the 10 I thought. I used 15 to show a 10% saving along with a 5% match to one's 401(k). Those interested are welcome to enter their own numbers. The one objection I've seen is the increase to salary. Increases tend to be higher in the first 20 than the second, or so I'm told.)",
"title": ""
},
{
"docid": "09f25b2dcf4e545620823ee72144260a",
"text": "For most people, a million dollars is about right. Here's the back of the napkin math that you should consider to find your own estimate: If you take 1 and divide it by 2, that's roughly the size of the nest egg you'll need to live indefinitely. For example, if your retirement investments are earning 5% a year, and you want to live on $50,000 a year, you would need a $1,000,000 nest egg (50,000 / 0.05) Note that you don't have to make any assumptions about how long you'll live. The whole idea of a nest egg is that you live off the interest it earns each year without ever dipping into the principle. It's the gift that keeps on giving! When you die, you can pass it along to children, charities, etc.",
"title": ""
},
{
"docid": "b2a5e7a71d80f9d0b9240c7d31a1d114",
"text": "One more thing to consider is that $1M today is not the same as $1M 30 years from now because of inflation. Consider that just 30 years ago (1980) the average house price in the US was only about $69K and a new car cost around $7K on average. When you retire, it isn't much of a stretch to assume that you could be paying $1.5M for a typical house, $100K for mid-grade car, by the time you retire in 30 years. Of course, over the rest of your working life your salary will likely increase due to inflation too, so that will help. In 1980 the average US income was around $19K/year. So even though that number seems huge, it is because it is denominated in currency that has been devalued significantly.",
"title": ""
},
{
"docid": "784cb2be1c502b62fa8b164bb34b0697",
"text": "Here's another answer on the topic: Saving for retirement: How much is enough? An angle on it this question made me think of: a good approach here is to focus on savings rate (which you can control) rather than the final number (which you can't, plus it will fluctuate with the markets and make you nervous). For example, focus on saving at least 10% of your income annually (15% is much safer). If you focus on the final number: The way it works in the real world is that you save as much as you can, but there are lots of random factors and unknowns. Some people end up having to work a lot longer than they hoped to. Others end up able to retire early. Others retire on time but have to spend less than they hoped. But the one thing you can often control (as long as you have an income and no catastrophes, anyway) is that you spend less than you make.",
"title": ""
},
{
"docid": "9eaa3e4ead911126676f6dbb5c7fffc9",
"text": "There are three numbers that matter in that calculation: 1) How much do you expect per month from in pension/social security/or other retirement programs? 2) At what age will each of you retire? 3) How long will each of you live? 4) What will your annual expenses be when you retire? Unfortunately #3 is the most important of the three and the hardest to know with any certainty.",
"title": ""
}
] |
[
{
"docid": "2ac0c962a8e0fc8964131ea3692c84ea",
"text": "\"I would suggest you do three things: If you do all three of these, the time will come when \"\"2 months off to go to Italy this winter and ride bikes through wine country\"\" is something you both want to do, can afford to do, and have arranged your lives to make it feasible. Or whatever wow-cool thing you might dream of. Buying a vacation property. Renovating an old house. The time may also come when you can take a chance on no income for 6 months to start a business that will give you more flexibility about when and where you work. Or when you can switch from working for a pay cheque to volunteering somewhere all day every day. You (as a couple) will have the freedom to make those kinds of decisions if you have that safety net of long term savings, as long as you also have a strong and happy relationship because you didn't spend 40 years arguing about money and whether or not you can afford things.\"",
"title": ""
},
{
"docid": "afc9629d2c35aab04239bf5528fa9afe",
"text": "\"I see three areas of concern for your budget: This is way high. I am not sure how much of a house you live in, but the total of these two numbers should be around 25% not 41%. I am a person that considers giving an important part of wealth building, and gives to my local church. But as one other person has rightly said, this amount is irresponsible. I am okay at 12%, but would like to see you at 10% until you are in a little better shape. That is pretty vague for a significant portion of your income. What makes up that other category? You are doing pretty darn good financially, although I would like to see some contributions to investments. I think you are kind of failing there. Your debt management is spot on. That is okay, we can all get better at some stuff. There needs to be some numbers behind these percentages. The bottom line is if you make an average household income, say around 55K, you are going to struggle with or without children. If you guys make about 110K, and your wife makes 50% of your income, and she quits work to take care of the kidlets, then you will be in that \"\"boat\"\". Having said all that I find 37% of your income as questionable. At least 5% of that should be invested, so we are kind of like at 32%. That is a significant amount of money.\"",
"title": ""
},
{
"docid": "b708f531bc49a23069b670d394a624c2",
"text": "I'm talking about household income. $300k is a huge amount of money for a single person to make, but $150k is certainly doable for most doctors/lawyers/engineers. If your spouse is also a high earner that will help put over the 1% threshold.",
"title": ""
},
{
"docid": "7259abc4d639e5123b712522b6c30445",
"text": "http://www.myretirementblog.com/average-retirement-savings-by-age.html For ages 25-34: Obviously that's a huge range, and a 26 year old would at the very low end, but I would say anywhere near $25,000 is a ton.",
"title": ""
},
{
"docid": "24ac5b7453e82c94b72b34be3902a1fb",
"text": "\"If you dig deeper and look at the original study, what's being measured is \"\"retirement-plan participation\"\": specifically, money in 401(k) plans and IRAs. This omits every other possible source of retirement money: things such as general savings, non-retirement investments, property ownership, pensions, etc. As an extreme example, I know someone who's retired with property worth a million dollars, another million dollars in stock, a pension providing thousands of dollars a month plus health insurance, and not one penny of what the study would consider \"\"retirement savings\"\". Yes, the average American family is under-prepared for retirement. But it's nowhere near as bad as the article makes it sound.\"",
"title": ""
},
{
"docid": "a87e909ce967530a0f83baa6241eedd0",
"text": "\"I can understand your nervousness being 40 and no retirement savings. Its understandable especially given your parents. Before going further, I would really recommend the books and seminars on Love and Respect. The subject matter is Christian based, but it based upon a lot of secular research from the University of Washington and some other colleges. It sounds like to me, this is more of a relationship issue than a money issue. For the first step I would focus on the positive. The biggest benefit you have is: Your husband is willing to work! Was he lazy, there would be a whole different set of issues. You should thank him for this. More positives are that you don't have any credit card debt, you only have one car payment (not two), and that you are paying additional payments on each. I'd prefer that you had no car payment. But your situation is not horrible. So how do you improve your situation? In my opinion getting your husband on board would be the first priority. Ask him if he would like to get the car paid off as fast as possible, or, building an emergency fund? Pick one of those to focus on, and do it together. Having an emergency fund of 3 to 6 months of expense is a necessary precursor to investing, anyway so you from the limited info in your post you are not ready to pour money into your 401K. Have you ever asked what his vision is for his family financially? Something like: \"\"Honey you care for us so wonderfully, what is your vision for me and our children? Where do you see us in 5, 10 and 20 years?\"\" I cannot stress enough how this is a relationship issue, not a math issue. While the problems manifests themselves in your balance sheet they are only a symptom. Attempting to cure the symptom will likely result in resentment for both of you. There is only one financial author that focuses on relationships and their effect on finances: Dave Ramsey. Pick up a copy of The Total Money Makeover, do something nice for him, and then ask him to read it. If he does, do something else nice for him and then ask him what he thinks.\"",
"title": ""
},
{
"docid": "6c99066b6eb438067a1923622e4cabc9",
"text": "There was a book written by Harry Dent in the early 90's that talked about the approaching demographic problem. The simple version of his theory is that people spend the most money between 45-49, after which people begin to become a drain on the economy as they utilize government benefits and begin draining retirement plans. Boomers are moving out of this range and there is no group substantially large enough to follow them, according to him, until the mid 2020s when the Echo Boomers come through. While he had some things way off and, u fortunately, seems to be overcompensating as of late and only hawking his newsletters, he had some great points in his first book. To me, you can't fudge those numbers and what he said makes a lot of sense. That seems to be very similar to this article.",
"title": ""
},
{
"docid": "41e358f0c4f17a2e8510b504eef1f6d2",
"text": "Retirement calculation, in general, should be based on the amount of money needed per year/month and the expected life expectancy. Life expectancy, if calculated to 90 years (let's say) indicates that post retirement age (60 yrs.) your accumulated/invested money should generate adequate income to cover your expenses till 90 years. The problem in general is not how long you shall live but what would be your expected spending from retirement to end of life expectancy. The idea is at the minimum your investments should generate income that is inflation adjusted. One way to do this is to consider your monthly expense now i.e. the expense that is absolute minimum for carrying on (food, electricity, water, medicines, household consumables, car petrol, insurance, servicing, entertainment, newspaper etc.) this does not contain the amortizable liabilities (home loan, child's education, other debts). It is better to take this amount per family rather than per person and yearly rather than monthly (as we tend to miss a lot of yearly expenses). This amount that you need today will increase at a Compounded Annual Growth Rate (CAGR) of the average inflation. For example, if today you spend 100 per year in 7 years you will need to spend appx. 200 at 10% inflation. Now, your investments will not increase post your retirement, so your current investment needs to do two things (1) give you your yearly requirement (2) grow by a fixed amount so that next year it can give you CAGR adjusted returns. In general, this kind of investment grows by high net amounts initially and slowly the growth decrease. The above can be calculated by Net Present value (NPV) formulae (http://en.wikipedia.org/wiki/Net_present_value). The key is to remember that the money that is invested when you retire should be able to give you inflation adjusted returns to cover your yearly expenses. How much money you need depends on your life style/expectation and how much return is received depends on the instruments that you invest on. As for your question above on the difference between the age of you and your spouse, it better to go with the consolidated family requirement and get an idea of how much investment is necessary and provision the same as soon as possible from your as well as your spouse's income. Hope this helps.- thanks",
"title": ""
},
{
"docid": "a6d379e1608fb9f5784adae4c5e216d7",
"text": "The purpose of this spammy Motley Fool video ad is to sell their paid newsletter products. Although the beginning of the video promises to tell you this secret trick for obtaining additional Social Security payments, it fails to do so. (Luckily, I found a transcript of the video, so I didn't have to watch it.) What they are talking about is the Social Security File and Suspend strategy. Under this strategy, one spouse files for social security benefits early (say age 66). This allows the other spouse to claim spousal benefits. Immediately after that is claimed, the first spouse suspends his social security benefits, allowing them to grow until age 70, but the other spouse is allowed to continue to receive spousal benefits. Congress has ended this loophole, and it will no longer be available after May 1, 2016.",
"title": ""
},
{
"docid": "41bf5cbee4234ed07d164d694903290a",
"text": "\"My basic rule I tell everyone who will listen is to always live like you're a college student - if you could make it on $20k a year, when you get your first \"\"real\"\" job at $40k (eg), put all the rest into savings to start (401(k), IRA, etc). Gradually increase your lifestyle expenses after you hit major savings goals (3+ month emergency fund, house down payment, etc). Any time you get a raise, start by socking it all into your employer's 401(k) or similar. And repeat the above advice.\"",
"title": ""
},
{
"docid": "319ecafcdb8a3aec5bded1d3b26698c9",
"text": "First, welcome to Money.SE. If you are interested in saving and investing, this is a great site to visit. Please take the tour and just start to read the questions you find interesting. 1 - even though this is hypothetical, it scales down to an average investor. If I own 1000 shares of the 1 billion, am I liable if the company goes under? No. Stocks don't work that way. If all I have is shares, not a short position, not options, I can only see my investment go to zero. 2 - Here, I'd ask that you edit your country in the tags. I can tell you that my newborn (who is soon turning 17) had a stock account in her name when she was a few months old. It's still a custodian account, meaning an adult has to manage it, and depending on the state within the US, the age that it's hers with no adult, is either 18 or 21. Your country may have similar regional rules. Also - each country has accounts specifically geared toward retirement, with different favorable rules regarding taxation. In the US, we have accounts that can be funded at any age, so long as there's earned income. My daughter started one of these accounts when she started baby sitting at age 12. She will have more in her account by the time she graduates college than the average retiree does. It's good for her, and awful for the general population that this is the case.",
"title": ""
},
{
"docid": "c79894c7fa372a0fc8b279eaf727db50",
"text": "\"In my opinion, you can't save too much for retirement. An extra $3120/yr invested at 8% for 30 years would give you $353K more at retirement. If your \"\"good amount in my 401k\"\" is a hint that you don't want us to go in that direction, then how about saving for the child's college education? 15 years' savings, again at 8% will return $85K, which feels like a low number even in today's dollars, 15 years of college inflation and it won't be much at all. Not sure why there's guilt around spending it. If one has no debt, good retirement savings level, and no pressing need to save for something else, enjoying one's money is an earned reward. Even so, if you want a riskless 'investment' just prepay the mortgage. You'll see an effective return of the mortgage rate, 4%(?) or so, vs the .001% banks are paying. Of course, this creates a monthly windfall once the mortgage is paid off, but it buys you time to make this ultimate decision. In the end, I'd respond that similar to Who can truly afford luxury cars?, one should produce a budget. I don't mean a set of constraints to limit spending in certain categories, but rather, a look back at where the money went last year and even the year before that. What will emerge are the things that are normal, the utility bills, tax bill, mortgage, etc, as well as the discretionary spending. If all your current saving is on track, the investment may be in experiences, not financial products.\"",
"title": ""
},
{
"docid": "ee9dd9059baeca33306de0ce321cb4f0",
"text": "When you say: I am 48 and my husband is 54. We have approx. 60,000.00 left in our retirement accounts. We want to move our money into something so our money will grow. We've been looking at annunities. We've talked to 4 different advisors about what is best for us. Bad mistake, I am so overwhelmed with the differences they all have til I can't even think straight anymore. @Havoc P is correct: ...It's very likely that 60k is not nearly enough, and that making the right investment choices will make only a small difference. You could invest poorly and maybe end up with 50K when you retire, or invest well and maybe end up with 80-90k. But your goal is probably more like a million dollars, or more, and most of that will come from future savings. This is what a planner can help you figure out in detail. TL; DR Here is my advice:",
"title": ""
},
{
"docid": "ed5fb75f53cbfb9ec38c820ec74761d4",
"text": "I'd suggest waiting until a bit after you are married. To Eagle1's point, even $23,000 is not a huge sum of money. You didn't make any mention of a desire to buy a home, but if that becomes part of the plan, I'd want every cent of liquidity I can get. I wrote Student Loans and Your First Mortgage to explain why your buying power for the house is lowered by paying that loan. In your case, $5000 is 20% of $25000. For a good 20% down purchase, I'd want those funds available. You also don't mention retirement accounts. Depending on the home purchase timing, I'd start to think about putting aside at least the $5500 per year IRA/Roth IRA maximum.",
"title": ""
},
{
"docid": "35f7e9bbe9ff41aa6e46cb264ed40e26",
"text": "I understand that, but there are so many mitigating factors now that I don't feel safe. It's more like thinking that airplanes are safe, but if you're walking through the airport and you notice the pilot at the bar and them see him with his shirt untucked as he bumps his head getting into the airplane you might not get onto that airplane. I wouldn't give this advice to someone in their 20s, but we are in our 50s. We have enough to live on comfortably with savings and my husband's pension and social security and passive income from the rental. It's just not worth the risk. As it is I am retired and can travel and eat whatever I want whenever I want. And the rental property is our hedge against inflation. I just see no reason to risk that.",
"title": ""
}
] |
fiqa
|
ff2794d503982236d09b5cedd3bb1560
|
Investments other than CDs?
|
[
{
"docid": "62eedc6dd5f5c6e5b6f0fb1bbee1c9a8",
"text": "You're losing money. And a lot of it. Consider this: the inflation is 2-4% a year (officially, depending on your spending pattern your own rate might be quite higher). You earn about 1/2%. I.e.: You're losing 3% a year. Guaranteed. You can do much better without any additional risk. 0.1% on savings account? Why not 0.9%? On-line savings account (Ally, CapitalOne-360, American Express, E*Trade, etc) give much higher rates than what you have. Current Ally rates are 0.9% on a regular savings account. 9 times more than what you have, with no additional risk: its a FDIC insured deposit. You can get a slightly higher rate with CDs (0.97% at the same bank for 12 months deposit). IRA - why is it in CD's? Its the longest term investment you have, that's where you can and should take risks, to maximize your compounding returns. Not doing that is actually more risky to you because you're guaranteeing compounding loss, of the said 3% a year. On average, more volatile stock investments have shown to be not losing money over periods of decades, even if they do lose money over shorter periods. Rental - if you can buy a property that you would pay the same amount of money for as for a comparable rental - you should definitely buy. Your debt will be secured by the property, and since you're paying the same amount or less - you're earning the equity. There's no risk here, just benefits, which again you chose to forgo. In the worst case if you default and walk away from the property you lost exactly (or less) what you would have paid for a rental anyway. 14 years old car may be cheaper than 4 years old to buy, but consider the maintenance, licensing and repairs - will it not some up to more than the difference? In my experience - it is likely to. Bottom line - you think you're risk averse, but you're exactly the opposite of that.",
"title": ""
},
{
"docid": "8b2fcd1211efaa502dcfa4bea968fe08",
"text": "First off, you have done very well to be in your financial position at your age. Congratulations. I first started investing seriously about 10 years ago, and when I started, I had a similar attitude to you. Learning how to invest is a journey, and it will take you a while to learn both the intellectual and emotional sides of investing. First off, there is nothing wrong with having a chunk of cash that you aren't investing effectively. It is far better to be losing earning power WRT inflation that it is to make a bad investment, where you can lose all your money quite quickly. I have perhaps 15% of my capital just sitting around right now because I don't have any place where I'm excited to put it. For your IRA, I would look at the options you have, and choose one that is reasonably well diversified and has low costs. In most cases, an index fund is a reasonable choice. My 401K goes into an S&P 500 index fund, and I don't have to worry about it. Beyond that, I suggest spending some time learning about investing, and then making some small and conservative investments. I've learned a lot from the Motley Fool web site.",
"title": ""
}
] |
[
{
"docid": "281b87ce29ace56b33b832593ffd7a81",
"text": "Avoiding tobacco, etc is fairly standard for a fund claiming ethical investing, though it varies. The hard one on your list is loans. You might want to check out Islamic mutual funds. Charging interest is against Sharia law. For example: http://www.saturna.com/amana/index.shtml From their about page: Our Funds favor companies with low price-to-earnings multiples, strong balance sheets, and proven businesses. They follow a value-oriented approach consistent with Islamic finance principles. Generally, these principles require that investors avoid interest and investments in businesses such as liquor, pornography, gambling, and banks. The Funds avoid bonds and other conventional fixed-income securities. So, it looks like it's got your list covered. (Not a recommendation, btw. I know nothing about Amana's performance.) Edit: A little more detail of their philosophy from Amana's growth fund page: Generally, Islamic principles require that investors share in profit and loss, that they receive no usury or interest, and that they do not invest in a business that is prohibited by Islamic principles. Some of the businesses not permitted are liquor, wine, casinos, pornography, insurance, gambling, pork processing, and interest-based banks or finance associations. The Growth Fund does not make any investments that pay interest. In accordance with Islamic principles, the Fund shall not purchase conventional bonds, debentures, or other interest-paying obligations of indebtedness. Islamic principles discourage speculation, and the Fund tends to hold investments for several years.",
"title": ""
},
{
"docid": "3b33e80a1bc5ef0a22b1be95eee44ba0",
"text": "It isn't just ETFs, you have normal mutual funds in India which invest internationally. This could be convenient if you don't already have a depository account and a stockbroker. Here's a list of such funds, along with some performance data: Value Research - Equity: International: Long-term Performance. However, you should also be aware that in India, domestic equity and equity fund investing is tax-free in the long-term (longer than one year), but this exemption doesn't apply to international investments. Ref: Invest Around the World.",
"title": ""
},
{
"docid": "d5cf6c794ca38b8787f237872319bc79",
"text": "Yes. Savings accounts and CDs today pay almost nothing. They are not a way to grow your money for the future. They are a place to keep some spare cash for emergencies. I don't have such accounts any more. Personally, I generally keep about $2000 in my checking account for any sudden surprise expenses. Any other spare money I have I put into very safe mutual funds. They don't grow much either, but it's better than what I'd get on a savings account or CD.",
"title": ""
},
{
"docid": "7b02a1425b070d95d4ee01a66f4f5f56",
"text": "This all depends on your timeline and net worth. If you're short on time before you plan to start spending it or have a large net worth, parking some of your money in CDs is a good idea. If you have lots of time or not much net worth, then index funds are a better bet. Equity or dividend index funds are the way to go when you have 10+ years before you reach your goal. CDs major downside is that they don't beat inflation 1 - 3% a year. This is why you only use them when it's absolutely critical you hold onto every penny of the principal. The reason is because with CDs your 10k is actually losing its value (not the principal) the longer you leave it in CDs. I generally wouldn't recommend CDs unless you are in or approaching your 60s or have assets over 500k. Even still I would limit the use of CDs to no more than 20%. I would view them as catastrophic loss protection.",
"title": ""
},
{
"docid": "22d57b67ca815daf49301d978bbff5b9",
"text": "\"You may want to look into robo-investors like Wealthfront and Betterment. There are many others, just search for \"\"robo investor\"\".\"",
"title": ""
},
{
"docid": "6ea1a50c2be082b1898f0ac78a08715d",
"text": "In the US, you would probably look at a certificate of deposit (CD). I imagine there is a similar financial product in the UK, but don't know first hand. I think it is wise to be risk averse in this situation, but be aware that your interest rate will be dismal for guaranteed returns.",
"title": ""
},
{
"docid": "b6378d779e2f23d5f7d55919906b65f9",
"text": "The iron-clad rule of investing is that risk and return are directly related. It is impossible to get a higher return than you are getting without putting principal at risk. Your emergency fund should be in cash, preferably in government insured cash (like a savings account). The best you could probably do is laddered 3-month CDs. That way, you could cash them out, one per month, as they mature.",
"title": ""
},
{
"docid": "65f7cecbb29b4cef157e86f531be6a7d",
"text": "\"In the UK, one quirky option in this area (OK, admittedly it's not a passive) is the \"\"Battle Against Cancer Investment Trust\"\" (BACIT). Launched in 2012, it's basically a fund-of-funds where the funds held charge zero management charges or performance fees to the trust, but the trust then donates 1% of NAV to charity each year (half to cancer research, investors decide the other half).\"",
"title": ""
},
{
"docid": "ed0f6b8a67ef30833bad0c79d53fdb95",
"text": "If you need the money in the short-term, you want to invest in something fairly safe. These include saving accounts, CDs, and money market funds from someplace like Vanguard. The last two might give you a slightly better return than the local branch of a national bank.",
"title": ""
},
{
"docid": "ccdfb95bba9a39dd154f1bfddbefe85b",
"text": "How much money do you have in your money market fund and what in your mind is the purpose of this money? If it is your six-months-of-living-expenses emergency fund, then you might want to consider bank CDs in addition to bond funds as an alternative to your money-market fund investment. Most (though not necessarily all, so be sure to check) bank CDs can be cashed in at any time with a penalty of three months of interest, and so unless you anticipate being laid off very soon, you might get a slightly better rate of interest, FDIC insurance (which mutual funds do not have), and with any luck you may never have to break a CD and lose the interest. Building a ladder of CDs with one maturing each month might be another way to reduce the risk of loss. On the other hand, bond mutual funds are a risky bet now because your investment will lose value if interest rate go up, and as JohnFx points out, interest rates have nowhere to go but up. Finally, the amount of the investment is something that you might want to consider before making changes. If you have $50K put away as your six-month fund, you are talking of $500 versus $350 per annum in changing to a riskier investment with a 1% yield from a safer investment with a 0.7% yield. Whether bragging rights at neighborhood parties are worth the trouble is something for you to decide.",
"title": ""
},
{
"docid": "a66fc17f8cc2ae924765246d0e4bc808",
"text": "You can also create a CD ladder (say 1/3 in a 6 month CD, 1/3 in a 1 year CD, 1/3 in a 2 year CD) with half of your emergency fund money. You always want to leave some of it in a liquid account so you can get at it immediately without any interest penalty. CD's provide higher interest than a savings account. By staggering the lengths of the CD's, you give yourself more options, and can roll them over into CD's with higher rates (since interest rates are soooo low right now) as the CD's mature.",
"title": ""
},
{
"docid": "4c6654a90da0a1b3c16dc090bd5e2647",
"text": "Well, a proper answer needs a few more details: 1) What's your marginal tax bracket? (A CD is just plain silly for someone in a high tax bracket and in a high tax state) 2) What's your state of residence? 3) Do you have a 401k to draw on for a house loan in case of badly timed volatility? 4) What does will the rest of our investment portfolio look like in case of a sudden rise in interest rates? Depending on the answers to those questions, the mix of investments could be anywhere from: Tell me more about bracket/state/other investment mix and I can suggest something.",
"title": ""
},
{
"docid": "151ec6d3e24b890cc9732e88649dfd6e",
"text": "\"What you're describing makes sense. I'd probably call the non-liquid portion something besides my \"\"emergency fund\"\", but that's semantics mostly. If you have 3 months of \"\"very liquid\"\" cash in this emergency fund and you're comfortable that this amount is good for your situation, then I don't see why you can't have additional savings in more or less liquid vehicles. Whatever you set up, you'll want to think about how to tap it when you need it. You might have a CD ladder with one maturing every three months. That would give you access to these funds after your liquid funds dry up. (Or for a small/short term emergency, you'll be able to replenish the liquid fund with the next-maturing CD.) Or set up a T Bill ladder with the same structure. This might provide you with a tax advantage.\"",
"title": ""
},
{
"docid": "7b2b5680166af921079718e37b719cb9",
"text": "Just to offer another alternative, consider Certificates of Deposit (CDs) at an FDIC insured bank or credit union for small or short-term investments. If you don't need access to the money, as stated, and are not willing to take much risk, you could put money into a number of CDs instead of investing it in stocks, or just letting it sit in a regular savings/checking account. You are essentially lending money to the bank for a guaranteed length of time (anywhere from 3 to 60 months), and therefore they can give you a better rate of return than a savings account (which is basically lending it to them with the condition that you could ask for it all back at any time). Your rate of return in CDs is lower a typical stock investment, but carries no risk at all. CD rates typically increase with the length of the CD. For example, my credit union currently offers a 2.3% APY on a 5-year CD, but only 0.75% for 12 month CDs, and a mere 0.1% APY on regular savings/checking accounts. Putting your full $10K deposit into one or more CDs would yield $230 a year instead of a mere $10 in their savings account. If you go this route with some or all of your principal, note that withdrawing the money from a CD before the end of the deposit term will mean forfeiting the interest earned. Some banks may let you withdraw just a portion of a CD, but typically not. Work around this by splitting your funds into multiple CDs, and possibly different term lengths as well, to give you more flexibility in accessing the funds. Personally, I have a rolling emergency fund (~6 months living expenses, separate from all investments and day-to-day income/expenses) split evenly among 5 CDs, each with a 5-year deposit term (for the highest rate) with evenly staggered maturity dates. In any given year, I could close one of these CDs to cover an emergency and lose only a few months of interest on just 20% of my emergency fund, instead of several years interest on all of it. If I needed more funds, I could withdraw more of the CDs as needed, in order of youngest deposit age to minimize the interest loss - although that loss would probably be the least of my worries by then, if I'm dipping deeply into these funds I'll be needing them pretty badly. Initially I created the CDs with a very small amount and differing term lengths (1 year increments from 1-5 years) and then as each matured, I rolled it back into a 5 year CD. Now every year when one matures, I add a little more principal (to account for increased living expenses), and roll everything back in for another 5 years. Minimal thought and effort, no risk, much higher return than savings, fairly liquid (accessible) in an emergency, and great peace of mind. Plus it ensures I don't blow the money on something else, and that I have something to fall back on if all my other investments completely tanked, or I had massive medical bills, or lost my job, etc.",
"title": ""
},
{
"docid": "373771eb8ca5248a07dbdf343e9fcbd9",
"text": "You could open up CDs or try a few stocks. Once I saved up enough to where I was comfortable in savings and in a retirement account, I went to CDs. Once I was comfortable with CDs I started doing stocks with dividends. Now that I'm happy with what I am receiving in dividends I just recently bought a risky stock. I highly recommend Navy Federal for CDs, if you are eligible and USAA for stocks. Congrats!",
"title": ""
}
] |
fiqa
|
363cd766e3fc33f3f44d23131deba238
|
Choosing a vehicle to invest a kid's money on their behalf (college, etc.)?
|
[
{
"docid": "1e3cdc7396f7f31fd63aa01e35c6083b",
"text": "\"Roth is currently not an option, unless you can manage to document income. At 6, this would be difficult but not impossible. My daughter was babysitting at 10, that's when we started her Roth. The 529 is the only option listed that offers the protection of not permitting an 18 year old to \"\"blow the money.\"\" But only if you maintain ownership with the child as beneficiary. The downside of the 529 is the limited investment options, extra layer of fees, and the potential to pay tax if the money is withdrawn without child going to college. As you noted, since it's his money already, you should not be the owner of the account. That would be stealing. The regular account, a UGMA, is his money, but you have to act as custodian. A minor can't trade his own stock account. In that account, you can easily manage it to take advantage of the kiddie tax structure. The first $1000 of realized gains go untaxed, the next $1000 is at his rate, 10%. Above this, is taxed at your rate, with the chance for long tern capital gains at a 15% rate. When he actually has income, you can deposit the lesser of up to the full income or $5500 into a Roth. This was how we shifted this kind of gift money to my daughter's Roth IRA. $2000 income from sitting permitted her to deposit $2000 in funds to the Roth. The income must be documented, but the dollars don't actually need to be the exact dollars earned. This money grows tax free and the deposits may be withdrawn without penalty. The gains are tax free if taken after age 59-1/2. Please comment if you'd like me to expand on any piece of this answer.\"",
"title": ""
},
{
"docid": "69973406d4fae9631a60e24bfb94d2f5",
"text": "One other advantage of a 529 versus a simple investment account (like an UGMA/UTMA) is that the treatment for the purposes of financial aid is more advantageous (FinAid.org). Even if it is a custodial account (in which the student is both the owner and beneficiary), it is treated as a parental asset when completing the FAFSA. That means the amount that will be considered available each year towards the Estimated Family Contribution (EFC) will be greatly reduced. To be sure, this does not help with all colleges (often ones that use the CSS/PROFILE in addition to the FAFSA). Some will simply assume that 25% of the 529 will be used each year.",
"title": ""
}
] |
[
{
"docid": "16ed6dab292e7202b621d0760d331256",
"text": "529 College Savings Plans exist, which allow for tax-free savings for educational expenses, but I think you expect to go back to school too quickly for them to be worth the hassle. (They're more designed for saving for college for your kids.) Other than an IRA, you don't have many options for tax-advantaged accounts. In addition, since you plan to return to school, you should keep money around for that. Don't put that money in anything too volatile or hard to access. Since you don't plan on doing anything with the 80k in CDs right now, you can get away with higher risk with that money.",
"title": ""
},
{
"docid": "9247ac42cea1b677ef3ad6d03ff47937",
"text": "A fourteen-year-old can invest a few thousand into commuting to a part-time job or an education. If you can wait five years for a couple hundred you can wait two to four years for a car (or gas money) or a class (or some textbooks.)",
"title": ""
},
{
"docid": "94486c7158fe5681abe710fc46ebb6c2",
"text": "There are some great answers on this site similar to what you asked, with either a non-jurisdictional or a US-centric focus. I would read those answers as well to give yourself more points of view on early investing. There are a few differences between Canada and the US from an investing perspective that you should also then consider, namely tax rules, healthcare, and education. I'll get Healthcare and Education out of the way quickly. Just note the difference in perspective in Canada of having government healthcare; putting money into health-savings plans or focusing on insurance as a workplace benefit is not a key motivating factor, but more a 'nice-to-have'. For education, it is more common in Canada for a student to either pay for school while working summer / part-time jobs, or at least taking on manageable levels of debt [because it is typically not quite as expensive as private colleges in the US]. There is still somewhat of a culture of saving for your child's education here, but it is not as much of a necessity as it may be in the US. From an investing perspective, I will quickly note some common [though not universal] general advice, before getting Canadian specific. I have blatantly stolen the meat of this section from Ben Miller's great answer here: Oversimplify it for me: the correct order of investing Once you have a solid financial footing, some peculiarities of Canadian investing are below. For all the tax-specific plans I'm about to mention, note that the banks do a very good job here of tricking you into believing they are complex, and that you need your hand to be held. I have gotten some criminally bad tax advice from banking reps, so at the risk of sounding prejudiced, I recommend that you learn everything you can beforehand, and only go into your bank when you already know the right answer. The 'account types' themselves just involve a few pages of paperwork to open, and the banks will often do that for free. They make up their fees in offering investment types that earn them management fees once the accounts are created. Be sure to separate the investments (stocks vs bonds etc.) vs the investment vehicles. Canada has 'Tax Free Savings Accounts', where you can contribute a certain amount of money every year, and invest in just about anything you want, from bonds to stocks to mutual funds. Any Income you earn in this account is completely tax free. You can withdraw these investments any time you want, but you can't re-contribute until January 1st of next year. ie: you invest $5k today in stocks held in a TFSA, and they grow to $6k. You withdraw $6k in July. No tax is involved. On January 1st next year, you can re-contribute a new $6K, and also any additional amounts added to your total limit annually. TFSA's are good for short-term liquid investments. If you don't know for sure when you'll need the money, putting it in a TFSA saves you some tax, but doesn't commit you to any specific plan of action. Registered Retirement Savings Plans allow you to contribute money based on your employment income accrued over your lifetime in Canada. The contributions are deducted from your taxable income in the year you make them. When you withdraw money from your RRSP, the amount you withdraw gets added as additional income in that year. ie: you invest $5k today in stocks held in an RRSP, and get a $5k deduction from your taxable income this year. The investments grow to $6k. You withdraw $6k next year. Your taxable income increases by $6k [note that if the investments were held 'normally' {outside of an RRSP}, you would have a taxable gain of only 50% of the total gain; but withdrawing the amount from your RRSP makes the gain 100% taxable]. On January 1st next year, you CANNOT recontribute this amount. Once withdrawn, it cannot be recontributed [except for below items]. RRSP's are good for long-term investing for retirement. There are a few factors at play here: (1) you get an immediate tax deduction, thus increasing the original size of investment by deferring tax to the withdrawal date; (2) your investments compound tax-free [you only pay tax at the end when you withdraw, not annually on earnings]; and (3) many people expect that they will have a lower tax-rate when they retire, than they do today. Some warnings about RRSP's: (1) They are less liquid than TFSA's; you can't put money in, take it out, and put it in again. In general, when you take it out, it's out, and therefore useless unless you leave it in for a long time; (2) Income gets re-characterized to be fully taxable [no dividend tax credits, no reduced capital gains tax rate]; and (3) There is no guarantee that your tax rate on retirement will be less than today. If you contribute only when your tax rate is in the top bracket, then this is a good bet, but even still, in 30 years, tax rates might rise by 20% [who knows?], meaning you could end up paying more tax on the back-end, than you saved in the short term. Home Buyer Plan RRSP withdrawals My single favourite piece of advice for young Canadians is this: if you contribute to an RRSP at least 3 months before you make a down payment on your first house, you can withdraw up to $25k from your RRSP without paying tax! to use for the down payment. Then over the next ~10 years, you need to recontribute money back to your RRSP, and you will ultimately be taxed when you finally take the money out at retirement. This means that contributing up to 25k to an RRSP can multiply your savings available for a down payment, by the amount of your tax rate. So if you make ~60k, you'll save ~35% on your 25k deposited, turning your down payment into $33,750. Getting immediate access to the tax savings while also having access to the cash for a downpayment, makes the Home Buyer Plan a solid way to make the most out of your RRSP, as long as one of your near-term goals is to own your own home. Registered Pension Plans are even less liquid than RRSPs. Tax-wise, they basically work the same: you get a deduction in the year you contribute, and are taxed when you withdraw. The big difference is that there are rules on when you are allowed to withdraw: only in retirement [barring specific circumstances]. Typically your employer's matching program (if you have one) will be inside of an RPP. Note that RPP's and RRSP's reduce your taxes on your employment paycheques immediately, if you contribute through a work program. That means you get the tax savings during the year, instead of all at once a year later on April 30th. *Note that I have attempted at all times to keep my advice current with applicable tax legislation, but I do not guarantee accuracy. Research these things yourself because I may have missed something relevant to your situation, I may be just plain wrong, and tax law may have changed since I wrote this to when you read it.",
"title": ""
},
{
"docid": "353265835852253747efba4db7963ba5",
"text": "\"There's an aspect to this question that I really love. In general, it's a question about consumer behavior that can be expanded to inquire about the purchasing profile of any luxury good. Who buys $500 pocketbooks, $1000 wristwatches, etc? I can offer one observation regarding the car. Two close neighbors, both couples drive cars valued well above what my wife and I drive. Both families moved, and shared with us that they failed to save for their kid's college tuition. My response was to feel that this was a choice they made. As I commented to my daughter, \"\"We can afford anything, we just can't afford everything.\"\" Our budget started with saving both for retirement and college. Very little eating out, and modest vacations, cars, and clothing. This story is getting more common for us as our peers have high school age children. As others have mentioned, the millionaire next door does not drive a Ferrari or wear a Rolex. To some extent, if you were able to peek at the budgets of these car buyers, you'll find what members here would consider at best, an interesting set of priorities.\"",
"title": ""
},
{
"docid": "822995c764a20e47c252de0284d046ef",
"text": "A 529 has a custodian and beneficiary. If, say, my Mom is custodian and my daughter the beneficiary, neither my daughter, my wife, nor I can access this account. In fact, if my daughter chooses not to attend college, Mom can change beneficiaries. So, a 529 is ideal for what you have described. By the way, your wife may have broken the law. Money in your child's name/SSN cannot simply be taken from the account at a parent's whim. You have every right to ask for an accounting of that money and insist she return it to your child's account. Edit - I was going to add that UTMA money may only be spent for the benefit of the child, and not for day to day items, food, clothing, etc. The article The proper use of UTMA funds provides a bit of support to my position on that.",
"title": ""
},
{
"docid": "5441f74c31fd065e750dc107af1495a4",
"text": "\"This may be a great idea, or a very bad one, or it may simply not be applicable to you, depending on your personal circumstances and interests. The general idea is to avoid passive investments such as stocks and bonds, because they tend to grow by \"\"only\"\" a few percent per year. Instead, invest in things where you will be actively involved in some form. With those, much higher investment returns are common (but also the risk is higher, and you may be tied down and have to limit the traveling you want to do). So here are a few different ways to do that: Get a college degree, but only if you are interested in the field, and it ends up paying you well. If you aren't interested in the field, you won't land the $100k+ jobs later. And if you study early-childhood education, you may love the job, but it won't pay enough to make it a good investment. Of course, it also has to fit with your life plans, but that might be easier than it seems. You want to travel. Have you thought about anthropology, marine biology or archeology? Pick a reputable, hard-to-get-into, academic school rather than a vocation-oriented oe, and make sure that they have at least some research program. That's one way to distinguish between the for-profit schools (who tend to be very expensive and land you in low-paying jobs), and schools that actually lead to a well-paying future. Or if your interest runs more in a different direction: start a business. Your best bet might be to buy a franchise. Many of the fast-food chains, such as McDonalds, will let you buy as long as you have around $300k net worth. Most franchises also require that you are qualified. It may often make sense to buy not just one franchised store, but several in an area. You can increase your income (and your risk) by getting a loan - you can probably buy at least $5 million worth of franchises with your \"\"seed money\"\". BTW, I'm only using McDonalds as an example. Well-known fast food franchises used to be money-making machines, but their popularity may well have peaked. There are franchises in all kinds of industries, though. Some tend to be very short-term (there is a franchise based on selling customer's stuff on ebay), while others can be very long-lived (many real-estate brokerages are actually franchises). Do be careful which ones you buy. Some can be a \"\"license to print money\"\" while others may fail, and there are some fraudsters in the franchising market, out to separate you from your money. Advantage over investing in stocks and bonds: if you choose well, your return on investment can be much higher. That's generally true for any business that you get personally involved in. If you do well, you may well end up retiring a multimillionaire. Drawback: you will be exposed to considerable risk. The investment will be a major chunk of your net worth, and you may have to put all your eggs in none basket. If your business fails, you may lose everything. A third option (but only if you have a real interest in it!): get a commercial driver's license and buy an 18-wheeler truck. I hear that owner-operators can easily make well over $100k, and that's with having to pay off a bank loan. But if you don't love trucker culture, it is likely not worth doing. Overall, you probably get the idea: the principle is to use your funds as seed money to launch something profitable and secure, as well as enjoyable for you.\"",
"title": ""
},
{
"docid": "d9090c82c10d0ab26682d90301bde7aa",
"text": "\"It is difficult to find investment banks that offer both low fees and low minimum investments. If you google around for \"\"no-fee low-minimum mutual funds\"\" you can find various articles with recommendations, such as this one. One fund they mention that looks promising is the Schwab Total Stock Market Index Fund, which apparently has a minimum investment of only $100 and an expense ratio of 0.09%. (I've never heard of this fund before, so I'm just repeating the info from the site. Be sure to look into it more thoroughly to see if there are any hidden costs here. I'm not recommending this fund, just mentioning it as an example of what you may be able to find.) Another possibility is to make use of funds in an existing brokerage account that you use for yourself. This could allow you to make use of Craig W.'s suggestion about ETFs. For instance, if you already have a brokerage account at Vanguard or another firm, you could add $100 to the account and buy some particular fund, mentally earmarking it as your daughter's.\"",
"title": ""
},
{
"docid": "2e808270f61e48530726c53dae641c17",
"text": "One big advantage that the 529 plan has is that most operate like a target date fund. As the child approaches college age the investment becomes more conservative. While you can do this by changing the mix of investments, you can't do it without capital gains taxes. Many of the issues you are concerned about are addressed: they are usable by other family members, they don't hurt financial aid offers, they address scholarships, they can be used for books or room and board. Many states also give you a tax break in the year of the contribution.",
"title": ""
},
{
"docid": "f3e50dd861f531211ef5db6eeca1998b",
"text": "Since this post was migrated from Parenting, my reply was in the context where it appeared to be misrepresenting facts to make a point. I've edited it to be more concise to my main point. In my opinion, the best way to save for your childs future is to get rid of as much of your own debt as possible. Starting today. For the average American, a car is 6-10%. Most people have at least a couple credit cards, ranging from 10-25% (no crap). College loans can be all over the map (5-15%) as can be signature (8-15%) or secured bank loans (4-8%). Try to stop living within your credit and live within your means. Yeah it will suck to not go to movies or shop for cute things at Kohl's, but only today. First, incur no more debt. Then, the easiest way I found to pay things off is to use your tax returns and reduce your cable service (both potentially $Ks per year) to pay off a big debt like a car or student loan. You just gave yourself an immediate raise of whatever your payment is. If you think long term (we're talking about long-term savings for a childs college) there are things you can do to pay off debt and save money without having to take up a 2nd job... but you have to think in terms of years, not months. Is this kind of thing pie in the sky? Yes and no, but it takes a plan and diligence. For example, we have no TV service (internet only service redirected an additional $100/mo to the wifes lone credit card) and we used '12 taxes to pay off the last 4k on the car. We did the same thing on our van last year. It takes willpower to not cheat, but that's only really necessary for the first year-ish... well before that point you'll be used to the Atkins Diet on your wallet and will have no desire to cheat. It doesn't really hurt your quality of life (do you really NEED 5 HBO channels?) and it sets everyone up for success down the line. The moral of the story is that by paying down your debt today, you're taking steps to reduce long haul expenditures. A stable household economy is a tremendous foundation for raising children and can set you up to be more able to deal with the costs of higher ed.",
"title": ""
},
{
"docid": "a32a6677638574ad2bfc7dea4305e4d9",
"text": "Or, are there specific types of investments we can make that won't count against college financial aid? Yes - Start saving for college. You seem to be very willing to save for your own retirement and other investments but are willing to let your kids suffer through college loans and subsidies for college. Invest in your children's education.",
"title": ""
},
{
"docid": "ba4c40ef92b1b89622a3207dc14fd562",
"text": "My god man, where do you live that is too expensive to live on your own and 7K isn't enough for emergency cash? Anyway, with your age and income I would be more worried about a long-term sustainable lifestyle. In other words, a job that nets you more than $26K/year. Someday you may want to have a wife and kids and that income sure as hell wont pay for their college. That was life advice, now for financial: I've always been a believer that if someone is not a savvy investor, their priorities before investments should be paying off debt. If you had a lot of capital or knew your way around investment vehicles and applicable returns then I would be telling you something different. But in your case, pay off that car first giving yourself more money to invest in the long-run.",
"title": ""
},
{
"docid": "34023394bf31a456359b7021c120bf34",
"text": "\"I will answer the question from the back: who can NOT afford luxury cars? Those whose parents paid for their college education, cannot afford luxury cars, but buy them anyway. Why? I have what may seem a rather shocking proposition related to the point of not saving for kids' college: parents do NOT owe children a college education. Why should they? Did your parents fund your college? Or did you get it through a mix of Pell grants, loans, and work? If they did, then you owe them $ back for it, adjusted for inflation. If they did not, well then why do you feel your children deserve more than you deserved when you were a child? You do not owe your children a college education. They owe it to themselves. Gifts do not set one up for success, they set one up for dependence. I will add one more hypothesis: financial discipline is best learned through one's own experiences. When an 18+ year old adult gets a very large amount of money as a gift every year for several years (in the form of paid tuition), does that teach them frugality and responsibility? My proposition is that those who get a free ride on their parents' backs are not well served in terms of becoming disciplined budgeters. They become the subjects of the question in this post: those why buy cars and houses they cannot afford, and pay for vacations with credit cards. We reap what we sow as a society. Of course, college is only one case in point, but a very illustrative one. The bigger point is that financial discipline can only be developed when there are opportunities to develop it. Such opportunities arise under one important condition: financial independence. What does buying children cars for their high-school graduation, buying them 4 years of college tuition, and buying them who knows what else (study abroad trips, airfare, apartment leases, textbooks, etc. etc.) teach? Does it teach independence or dependence? It can certainly (at least that's what you hope for) teach them to appreciate when others do super nice things for them. But does free money instill financial responsibility? Try to ask kids whose parents paid for their college WHY they did it. \"\"Because my parents want me to succeed\"\" is probably the best you can hope for. Now ask them, But do your parents OWE you a college education? \"\"Why yes, I guess they do.\"\" Why? \"\"Well, I guess because they told me they do. They said they owe it to me to set me up for success in life.\"\" Now think about this: Do people who become financially successful achieve that success because someone owed something to them? Or because they recognized that nobody owes them anything, and took it upon themselves to create that success for themselves? These are not very comfortable topics to consider, especially for those of you who have either already sunk many tens of thousands of dollars into your childrens' college education. Or for those who have been living very frugally and mindfully for the past 10-15 years driven by the goal of doing so. But I want to open this can of worms because I believe fundamentally it may be creating more problems than it is solving. I am sure there are some historical and cultural explanations for the ASSUMPTION that has at some point formed in the American society that parents owe their children a college education. But as with most social conventions, it is merely an idea -- a shared belief. It has become so ingrained in conversations at work parties and family reunions that it seems that many of those who are ardent advocates of the idea of paying for their childrens' education no longer even understand why they feel that way. They simply go with the flow of social expectations, unwilling or unable to question either the premises behind these expectations, or the long-term consequences and results of such expectations. With this comment I want to point to the connection between the free financial gifts that parents give to their (adult!) children, and the level of financial discipline of these young adults, their spending habits, sense of entitlement, and sense of responsibility over their financial decisions. The statistics of the U.S. savings rate, average credit card debt, foreclosures, and bankruptcy indeed tell a troubling story. My point is that these trends don't just happen because of lots of TV advertising and the proverbial Jones's. These trends happen because of a lack of financial education, discipline, and experience with balancing one's own checkbook. Perhaps we need to think more deeply about the consequences of our socially motivated decisions as parents, and what is really in our children's best interests -- not while they are in college, but while they live the rest of their lives after college. Finally, to all the 18+ y.o. adult 'children' who are reeling from the traumatic experience of not having their parents pay for their college (while some of their friends parents TOTALLY did!), I have this perspective to offer: Like you are now, your parents are adults. Their money is theirs to spend, because it was theirs to earn. You are under no obligation to pay for your parents' retirement (not that you were going to). Similarly your parents have no obligation to pay for your college. They can spend their money on absolutely whatever they want: be it a likeside cottage, vacations, a Corvette, or slots in the casino. How they spend their money is their concern only, and has nothing to do with your adult needs (such as college education). If your parents mismanage their finances and go bankrupt, it is their obligation to get themselves back in the black -- not yours. If you have the means and may be so inclined, you may help them; if you do not or are not, fair enough. Regardless of what you do, they will still love you as their child no less. Similarly, if your parents have the means and are so inclined, they may help you; if they do not or are not, fair enough. Regardless of what they do, you are to love them as your parents no less. Your task as an adult is to focus on how you will meet your own financial needs, not to dwell on which of your needs were not met by people whose finances should well be completely separate from yours at this point in life. For an adult, to harbor an expectation of receiving something of value for free is misguided: it betrays unjustified, illusory entitlement. It is the expectation of someone who is clueless as to the value of money measured by the effort and time needed to earn it. When adults want to acquire stuff or services, they have to pay for these things with their own money. That's how adults live. When adults want to get a massage or take a ride in a cab, are they traumatized by their parents' unfulfilled obligation to pay for these services? No -- they realize that it's their own responsibility to take care of these needs. They either need to earn the money to pay for these things, or buy them on credit and pay off the debt later. Education is a type of service, just like a massage or a cab ride. It is a service that you decide you need to get, in order to do xyz (become smarter, get a better paying job, join a profession, etc.). Therefore as with any other service, the primary responsibility for paying for this service is yours. You have 3 options (or their combination): work now so that you can earn the money to pay for this service later; work part-time while you are receiving this service; acquire the service on credit and work later to pay it off. That's it. This is called the real world. The better you can deal with it, the more successful you will become in it. Good luck!\"",
"title": ""
},
{
"docid": "16ae5b99d93ff41de4c55c4bc1eb3386",
"text": "I know it isn't exactly the question you asked, but please consider your future too. 529 is the correct answer, because if you can fund a Roth, you should be funding it for your own retirement. Your retirement has much a higher priority over anybody's college fund. It is pretty great that you want to set aside cash for the niece's education, I think asking which vehicle is best for saving for education might be the wrong question. Students have many options for going to school and paying for it but retirement is pretty limited. http://www.clarkhoward.com/news/clark-howard/education/clarks-529-guide/nFZS/ is a good place to learn about 529s and makes good suggestions on where to get one. Do it yourself, and don't pay a broker or agent to do it for you. If your retirement is already handled, feel free to vote me down and I will delete this.",
"title": ""
},
{
"docid": "a7d40b71488cb83dad50f64980f559a9",
"text": "\"I'd also look into index funds (eg Vanguard) as they have low management fees. you can buy these as ETFs as well - so you can buy in at a very low starting amount. An index fund can also be a talking point for your kids about what an industry index is and how it relates to the companies that fall into it. Also about how mutual funds try to \"\"beat the market\"\" - and often fail.\"",
"title": ""
},
{
"docid": "40965c0ba17523dcab20b0d0a7b79a96",
"text": "\"(Since you used the dollar sign without any qualification, I assume you're in the United States and talking about US dollars.) You have a few options here. I won't make a specific recommendation, but will present some options and hopefully useful information. Here's the short story: To buy individual stocks, you need to go through a broker. These brokers charge a fee for every transaction, usually in the neighborhood of $7. Since you probably won't want to just buy and hold a single stock for 15 years, the fees are probably unreasonable for you. If you want the educational experience of picking stocks and managing a portfolio, I suggest not using real money. Most mutual funds have minimum investments on the order of a few thousand dollars. If you shop around, there are mutual funds that may work for you. In general, look for a fund that: An example of a fund that meets these requirements is SWPPX from Charles Schwabb, which tracks the S&P 500. Buy the product directly from the mutual fund company: if you go through a broker or financial manager they'll try to rip you off. The main advantage of such a mutual fund is that it will probably make your daughter significantly more money over the next 15 years than the safer options. The tradeoff is that you have to be prepared to accept the volatility of the stock market and the possibility that your daughter might lose money. Your daughter can buy savings bonds through the US Treasury's TreasuryDirect website. There are two relevant varieties: You and your daughter seem to be the intended customers of these products: they are available in low denominations and they guarantee a rate for up to 30 years. The Series I bonds are the only product I know of that's guaranteed to keep pace with inflation until redeemed at an unknown time many years in the future. It is probably not a big concern for your daughter in these amounts, but the interest on these bonds is exempt from state taxes in all cases, and is exempt from Federal taxes if you use them for education expenses. The main weakness of these bonds is probably that they're too safe. You can get better returns by taking some risk, and some risk is probably acceptable in your situation. Savings accounts, including so-called \"\"money market accounts\"\" from banks are a possibility. They are very convenient, but you might have to shop around for one that: I don't have any particular insight into whether these are likely to outperform or be outperformed by treasury bonds. Remember, however, that the interest rates are not guaranteed over the long run, and that money lost to inflation is significant over 15 years. Certificates of deposit are what a bank wants you to do in your situation: you hand your money to the bank, and they guarantee a rate for some number of months or years. You pay a penalty if you want the money sooner. The longest terms I've typically seen are 5 years, but there may be longer terms available if you shop around. You can probably get better rates on CDs than you can through a savings account. The rates are not guaranteed in the long run, since the terms won't last 15 years and you'll have to get new CDs as your old ones mature. Again, I don't have any particular insight on whether these are likely to keep up with inflation or how performance will compare to treasury bonds. Watch out for the same things that affect savings accounts, in particular fees and reduced rates for balances of your size.\"",
"title": ""
}
] |
fiqa
|
fea33467cae3f04a8514c5e1d7714fd1
|
How to calculate years until financial independence?
|
[
{
"docid": "8a29aaf3d8fdfa4d18400e2269a11401",
"text": "\"The definition I use for financial independence is 99% confidence that, at a specific estimated spending rate per year (allowing for estimated inflation, and budgeting for likely medical emergencies, and taxes on taxable investments), the money will outlast me. This translates to needing an average annual return on investment which covers the average yearly spending. For my purposes, that works out to my relying on being able to draw only a 4% income from the money each year, which should give me good odds of the money not just being sufficient but being able to deliver that rate \"\"forever\"\". (Historically, average US stock market rate if return is around 8%.) That is overkill, if course, I could plan on the money just barely lasting past my 120th birthday or something of that sort, but the goal us to be pretty sure not only that I won't run out but that I will have some cash unexpected needs. Which in turn means that I estimate I need investments 1/.04 times the yearly spending estimate to declare the \"\"forever\"\" independence/retirement, or 25x the yearly. From that, I can calculate how much longer, at a given savings rate and rate of return, it'll take for me to reach that target. Obviously you need to adjust all these numbers to reflect your opinions/understanding if the market, your own needs, your priorities and expected maximum age, and the phase of Saturn's moons. But that's the basic rationale. Or you can pay a financial planner to give you this number, and a strategy for getting there, based on the numbers you give him or her plus some statistical analysis of the market's overall history.\"",
"title": ""
},
{
"docid": "0041b409e33a86bb0bc2003a0ea6a271",
"text": "In this equation the withdrawal rate is the percent you must pull from your savings to meet your expenses. For example if your savings is $100,000 and you need $10,000 annually for your living expenses then your withdrawal rate would be 10% (where 10k is 10% of 100k). To complete this formula, you need to know how much savings you need to be financially independent before you can use this formula to find out how long it will take you.",
"title": ""
}
] |
[
{
"docid": "e8771dc2165ce076d4b9c06951d94b41",
"text": "\"The best way to do this is to use IRR. It's a complicated calculation, but will take into account multiple in/out cash flows over time along with \"\"idle periods\"\" where your money may not have been doing anything. Excel can calculate it for you using the XIRR function\"",
"title": ""
},
{
"docid": "b0aa776a9b3efd7a2ab769f190a63fce",
"text": "It's important to have both long term goals and milestones along the way. In an article I wrote about saving 15% of one's income, I offered the following table: This table shows savings starting at age 20 (young, I know, so shift 2 years out) and ending at 60 with 18-1/2 year's of income saved due to investment returns. The 18-1/2 results in 74% of one's income replaced at retirement if we follow the 4% rule. One can adjust this number, assuming Social Security will replace 30%, and that spending will go down in retirement, you might need to save less than this shows. What's important is that as a starting point, it shows 2X income saved by age 30. Perhaps 1X is more reasonable. You are at just over .5X and proposing to spend nearly half of that on a single purchase. Financial independence means to somehow create an income you can live on without the need to work. There are many ways to do it, but it usually starts with a high saving rate. Your numbers suggest a good income now, but maybe this is only recently, else you'd have over $200K in the bank. I suggest you read all you can about investments and the types of retirement accounts, including 401(k) (if you have that available to you), IRA, and Roth IRA. The details you offer don't allow me to get much more specific than this.",
"title": ""
},
{
"docid": "a343aab16364936d534a6a452b22d73d",
"text": "\"To buy a house, you need: At least 2 years tax returns (shows a steady income history; even if you're making 50k right now, you probably weren't when you were 16, and you might not be when you're 20; as they say, easy come, easy go). A 20% down payment. These days, that easily means writing a $50k check. You make $50k a year, great, but try this math: how long will it take you to save 100% of your annual salary? If you're saving 15% of your income (which puts you above many Americans), it'll still take 7 years. So no house for you for 7 years. While your attitude of \"\"I've got the money, so why not\"\" is certainly acceptable, the reality is that you don't have a lot of financial experience yet. There could easily be lean times ahead when you aren't making much (many people since 2008 have gone 18 months or more without any income at all). Save as much money as possible. Once you get $10k in a liquid savings account, speak to a CPA or an investment advisor at your local bank to set up tax deferred accounts such as an IRA. And don't wait to start investing; starting now versus waiting until you're 25 could mean a 100% difference in your net worth at any given time (that's not just a random number, either; an additional 7 years compounding time could literally mean another doubling of your worth).\"",
"title": ""
},
{
"docid": "dd89a3b979537aa56baccb0c1159a488",
"text": "I recommend pulling up a retirement calculator and having an honest conversation about how long term savings works, and the power of compound interest. Just by playing around with the sliders on an online calculator, you can demonstrate how the early years are the most important. Depending on how much they make now and are considering saving, delaying 5-10 years can easily leave 6-7 figures on the table. If it's specifically a child or close family member, I recommend pulling up your retirement account. Talk with them about how you managed it, and how much you were putting in. Perhaps show them how much is the principal and how much is interest. If you did well, tell them how. If you didn't do as well as you liked, tell them what you would have done differently. Finally, discuss a bit of psychology. Even if they don't have a professional job and are making minimum wage, getting into the habit of saving makes it easier when they eventually make more. A couple of dollars a month isn't much, but getting into the habit makes it easier to save a couple hundred dollars a month later on.",
"title": ""
},
{
"docid": "e14660d08b4b2fa45f1d81f43002d2c7",
"text": "\"Wow, this turns out to be a much more difficult problem than I thought from first looking at it. Let's recast some of the variables to simplify the equations a bit. Let rb be the growth rate of money in your bank for one period. By \"\"growth rate\"\" I mean the amount you will have after one period. So if the interest rate is 3% per year paid monthly, then the interest for one month is 3/12 of 1% = .25%, so after one month you have 1.0025 times as much money as you started with. Similarly, let si be the growth rate of the investment. Then after you make a deposit the amount you have in the bank is pb = s. After another deposit you've collected interest on the first, so you have pb = s * rb + s. That is, the first deposit with one period's growth plus the second deposit. One more deposit and you have pb = ((s * rb) + s) * rb + s = s + s * rb + s * rb^2. Etc. So after n deposits you have pb = s + s * rb + s * rb^2 + s * rb^3 + ... + s * rb^(n-1). This simplifies to pb = s * (rb^n - 1)/(rb - 1). Similarly for the amount you would get by depositing to the investment, let's call that pi, except you must also subtract the amount of the broker fee, b. So you want to make deposits when pb>pi, or s*(ri^n-1)/(ri-1) - b > s*(rb^n-1)/(rb-1) Then just solve for n and you're done! Except ... maybe someone who's better at algebra than me could solve that for n, but I don't see how to do it. Further complicating this is that banks normally pay interest monthly, while stocks go up or down every day. If a calculation said to withdraw after 3.9 months, it might really be better to wait for 4.0 months to collect one additional month's interest. But let's see if we can approximate. If the growth rates and the number of periods are relatively small, the compounding of growth should also be relatively small. So an approximate solution would be when the difference between the interest rates, times the amount of each deposit, summed over the number of deposits, is greater than the fee. That is, say the investment pays 10% per month more than your bank account (wildly optimistic but just for example), the broker fee is $10, and the amount of each deposit is $200. Then if you delay making the investment by one month you're losing 10% of $200 = $20. This is more than the broker fee, so you should invest immediately. Okay, suppose more realistically that the investment pays 1% more per month than the bank account. Then the first month you're losing 1% of $200 = $2. The second month you have $400 in the bank, so you're losing $4, total loss for two months = $6. The third month you have $600 in the bank so you lose an additional $6, total loss = $12. Etc. So you should transfer the money to the investment about the third month. Compounding would mean that losses on transferring to the investment are a little higher than this, so you'd want to bias to transferring a little earlier. Or, you could set up a spreadsheet to do the compounding calculations month by month, and then just look down the column for when the investment total minus the bank total is greater than the broker fee. Sorry I'm not giving you a definitive answer, but maybe this helps.\"",
"title": ""
},
{
"docid": "e2f74d5da16c8fedf4baa825e11f13d7",
"text": "According to my reading, the Trinity study says you can withdraw 4% a year for 30 years without exhausting your nest egg, not necessarily that it won't shrink. In most cases, your nest egg will indeed grow. But unfortunately you can't plan to leave no estate while simultaneously preparing for worst-case scenarios in case you happen to pick a bad year to stop working. You can run simulations based on historical data on sites like cFIREsim. And once you're retired, you could potentially increase your spending if simulations show that you're likely to leave behind a large estate. You also probably want to look into things like charitable remainder trusts.",
"title": ""
},
{
"docid": "be3de55114a92d765ec1f5b08d835395",
"text": "The CFA will generally take 3-4 years to finish. They test level 2 and 3 once a year and level 1 twice. They recommend approx 300 hours of studying for each level, but you can get away with less. But for you, level 1 is going to be your undergrad in finance so it shouldn’t be anything outside of your normal course of study. You’ll be able to save time on studying if you take it while the material is still fresh",
"title": ""
},
{
"docid": "4f4fe97eac96ac79f577518fdd04e9f7",
"text": "\"Time Value of Money - The simple calculation for this is FV = PV * (1+r)^N which reads The Future Value is equal to the Present Value times 1 plus the interest rate multiplied by itself by the number of periods that will pass. A simple way to look at this is that if interest rates were 5%/yr a dollar would be worth (1.05)^N where N is the number of years passing. The concept of compound interest cannot be separated from the above. Compounding is accounting for the interest on the interest that has accrued in prior periods. If I lend you a dollar at 6% simple interest for 30 years, you would pay me back $1 + $1.80 or $2.80. But - 1.06^30 = 5.74 so that dollar compounded at 6% annually for 30 years is $5.74. Quite a difference. Often, the time value of money is discussed in light of inflation. A dollar today is not the same dollar as 30 years ago or 30 years hence. In fact, inflation has eroded the value of the dollar by a factor of 3 over the past 30 years. An average item costing $100 would now cost $300. So when one invests, at the very least they try to stay ahead of inflation and seek additional return for their risk. One quirk of compounding is the \"\"rule of 72.\"\" This rule states that if you divide the interest rate into the number 72 the result is the number of years to double. So 10% per year will take about 7.2 years to double, 8%, 9 years, etc. It's not 100% precise, but a good \"\"back of napkin\"\" calculation. When people talk about the total payments over the thirty year life of a mortgage, they often ignore the time value of money. That payment even ten years from now has far less value than the same payment today.\"",
"title": ""
},
{
"docid": "f968ac77c114449dadf53ee74f7830b8",
"text": "You can't get there from here. This isn't the right data. Consider the following five-year history: 2%, 16%, 32%, 14%, 1%. That would give a 13% average annual return. Now compare to -37%, 26%, 15%, 2%, 16%. That would give a 4% average annual return. Notice anything about those numbers? Two of them are in both series. This isn't an accident. The first set of five numbers are actual stock market returns from the last five years while the latter five start three years earlier. The critical thing is that five years of returns aren't enough. You'd need to know not just how you can handle a bull market but how you do in a bear market as well. Because there will be bear markets. Also consider whether average annual returns are what you want. Consider what actually happens in the second set of numbers: But if you had had a steady 4% return, you would have had a total return of 21%, not the 8% that would have really happened. The point being that calculating from averages gives misleading results. This gets even worse if you remove money from your principal for living expenses every year. The usual way to compensate for that is to do a 70% stock/30% bond mix (or 75%/25%) with five years of expenses in cash-equivalent savings. With cash-equivalents, you won't even keep up with inflation. The stock/bond mix might give you a 7% return after inflation. So the five years of expenses are more and more problematic as your nest egg shrinks. It's better to live off the interest if you can. You don't know how long you'll live or how the market will do. From there, it's just about how much risk you want to take. A current nest egg of twenty times expenses might be enough, but thirty times would be better. Since the 1970s, the stock market hasn't had a long bad patch relative to inflation. Maybe you could squeak through with ten. But if the 2020s are like the 1970s, you'd be in trouble.",
"title": ""
},
{
"docid": "c7cf50b1d08c74636ecff24bf8c02aa3",
"text": "These are the steps I'd follow: $200 today times (1.04)^10 = Cost in year 10. The 6 deposits of $20 will be one time value calculation with a resulting year 7 final value. You then must apply 10% for 3 years (1.1)^3 to get the 10th year result. You now have the shortfall. Divide that by the same (1.1)^3 to shift the present value to start of year 7. (this step might confuse you?) You are left with a problem needing 3 same deposits, a known rate, and desired FV. Solve from there. (Also, welcome from quant.SE. This site doesn't support LATEX, so I edited the image above.)",
"title": ""
},
{
"docid": "592918b1cf6d66a9a86a98c63e2ebbf6",
"text": "\"Another approach would be more personalized, which is to measure the risk of missing your goals, rather than measuring the risk of an investment in some abstract sense. Financial planners do this for example with Monte Carlo simulation software (see http://en.wikipedia.org/wiki/Monte_Carlo_method). They would put in a goal such as not running out of money before you die, with assumptions such as the longest you might live and how much you'll withdraw every year. You'd also assume an asset allocation. The Monte Carlo simulation then generates random market movements over the time period, considering historical behavior of your asset allocation, and each run of the simulation would either succeed (you are able to support yourself until death) or fail (you run out of money). The risk measure is the percentage of simulation runs that fail. You can do this to plan saving for retirement in addition to planning withdrawals; then your goal would be to have X amount of money in real after-inflation dollars, perhaps, and success is if you end up with it, and failure is if you don't. The great thing about this risk measure is that it's relevant and personal; \"\"10% chance of being impoverished at age 85,\"\" \"\"20% chance of having to work an extra decade because you don't have enough at 65,\"\" these kinds of answers. Which is a lot easier to act on than \"\"the variance is 10\"\" or \"\"the beta is 1.5\"\" - would you rather know your plan has a 90% chance of success, or know that you have a variance of 10? Both numbers are probably just guesses, but at least the \"\"chance of success\"\" measure is actionable and relevant. Some tangential thoughts FWIW:\"",
"title": ""
},
{
"docid": "4ee232426f873c73418bdcadf24765ed",
"text": "The rule that I know is six months of income, stored in readily accessible savings (e.g. a savings or money market account). Others have argued that it should be six months of expenses, which is of course easier to achieve. I would recommend against that, partially because it is easier to achieve. The other issue is that people are more prone to underestimate their expenses than their income. Finally, if you base it on your current expenses, then budget for savings and have money left over, you often increase your expenses. Sometimes obviously (e.g. a new car) and sometimes not (e.g. more restaurants or clubs). Income increases are rarer and easier to see. Either way, you can make that six months shorter or longer. Six months is both feasible and capable of handling difficult emergencies. Six years wouldn't be feasible. One month wouldn't get you through a major emergency. Examples of emergencies: Your savings can be in any of multiple forms. For example, someone was talking about buying real estate and renting it. That's a form of savings, but it can be difficult to do withdrawals. Stocks and bonds are better, but what if your emergency happens when the market is down? Part of how emergency funds operate is that they are readily accessible. Another issue is that a main goal of savings is to cover retirement. So people put them in tax privileged retirement accounts. The downside of that is that the money is not then available for emergencies without paying penalties. You get benefits from retirement accounts but that's in exchange for limitations. It's much easier to spend money than to save it. There are many options and the world makes it easy to do. Emergency funds make people really think about that portion of savings. And thinking about saving before spending helps avoid situations where you shortchange savings. Let's pretend that retirement accounts don't exist (perhaps they don't in your country). Your savings is some mix of stocks and bonds. You have a mortgaged house. You've budgeted enough into stocks and bonds to cover retirement. Now you have a major emergency. As I understand your proposal, you would then take that money out of the stocks and bonds for retirement. But then you no longer have enough for retirement. Going forward, you will have to scrimp to get back on track. An emergency fund says that you should do that scrimping early. Because if you're used to spending any level of money, cutting that is painful. But if you've only ever spent a certain level, not increasing it is much easier. The longer you delay optional expenses, the less important they seem. Scrimping beforehand also helps avoid the situation where the emergency happens at the end of your career. It's one thing to scrimp for fifteen years at fifty. What's your plan if you would have an emergency at sixty-five? Or later? Then you're reducing your living standard at retirement. Now, maybe you save more than necessary. It's not unknown. But it's not typical either. It is far more common to encounter someone who isn't saving enough than too much.",
"title": ""
},
{
"docid": "3bfae4ee3ce21e5318f8c77e2a1927e1",
"text": "I would use neither method. Taking a short example first, with just three compounding periods, with interest rate 10%. The start value y0 is 1. So after three years the value is 1.331, the same as y0 (1 + 0.1)^3. Depreciating (like inflation) by 10% (to demonstrate) gets us back to y0 = 1 Appreciating and depreciating by 10% cancels out: Appreciating by 10% interest and depreciating by 3% inflation: This is the same as y0 (1 + 0.1)^3 (1 + 0.03)^-3 = 1.21805 So for 50 years the result is y0 (1 + 0.1)^50 (1 + 0.03)^-50 = 26.7777 Note You can of course use subtraction but the not using the inflation figure directly. E.g. (edit: This appears to be the Fisher equation.) 2nd Note Further to comments, here is a chart to illustrate how much the relative performance improves when inflation is accounted for. The first fund's return is 6% and the second fund's return varies from 3% to 6%. Inflation is 3%.",
"title": ""
},
{
"docid": "dfc2f3c33075335b08c50365125d6639",
"text": "Congrats on saving aggressively when you're young. I'm not a huge fan of tax-advantaged accounts because the rules can change on them, and there's already a penalty for you to take out that money for most purposes until you've almost tripled your age. Free money (a match) overcomes this reservation for me, but I'm not contributing anything beyond that. I'm paying my taxes on the rest and am done with them. Watching your money grow tax-free for another 37 1/2 years only to see your (and everyone else's) marginal tax rate rise isn't much fun. I'm not saying that will happen, but it certainly could.",
"title": ""
},
{
"docid": "1fee3755477cad7694a9522d5b5f0664",
"text": "\"Some details in case you are interested: Being a defined benefit kind of pension plan, the formula for your Social Security benefits isn't tied directly to FICA contributions, and I'm not aware of any calculator that performs an ROI based on FICA contributions. Rather, how much you'll get in retirement is based on your average indexed monthly earnings. Here's some information on the Social Security calculation from the Social Security Administration - Primary Insurance Amount (PIA): For an individual who first becomes eligible for old-age insurance benefits or disability insurance benefits in 2013, or who dies in 2013 before becoming eligible for benefits, his/her PIA will be the sum of: (a) 90 percent of the first $791 of his/her average indexed monthly earnings, plus (b) 32 percent of his/her average indexed monthly earnings over $791 and through $4,768, plus (c) 15 percent of his/her average indexed monthly earnings over $4,768. Here's an example. Of course, to calculate a benefit in the future, you'll need to calculate projected average indexed monthly earnings; more details here. You'll also need to make assumptions about what those bend points might be in the future. The average wage indexing values for calculating the AIME are available from the Social Security Administration's site, but future indexing values will also need to be projected based on an assumption about their inflation. You'll also need to project the Contribution and Benefit Base which limits the earnings used to calculate contributions and benefits. Also, the PIA calculation assumes benefits are taken at the normal retirement age. Calculating an early or late retirement factor is required to adjust benefits for another age. Then, whatever benefits you get will increase each year, because the benefit is increased based on annual changes in the cost of living. Performing the series of calculations by hand isn't my idea of fun, but implementing it as a spreadsheet (or a web page) and adding in some \"\"ROI based on FICA contributions\"\" calculations might be an interesting exercise if you are so inclined? For completeness sake, I'll mention that the SSA also provides source code for a Social Security Benefit Calculator.\"",
"title": ""
}
] |
fiqa
|
82d29851fe5d3d0fa6241164ec061824
|
Negative interest rates and search for yield
|
[
{
"docid": "1cb916d0e43a50f25c6741433bb8358f",
"text": "\"Can it be so that these low-interest rates cause investors to take greater risk to get a decent return? With interest rates being as low as they are, there is little to no risk in banking; especially after Dodd-Frank. \"\"Risk\"\" is just a fancy word for \"\"Will I make money in the near/ long future.\"\" No one knows what the actual risk is (unless you can see into the future.) But there are ways to mitigate it. So, arguably, the best way to make money is the stock market, not in banking. There is a great misallocation of resources which at some point will show itself and cause tremendous losses, even maybe cause a new financial crisis? A financial crisis is backed on a believed-to-be strong investment that goes belly-up. \"\"Tremendous Losses\"\" is a rather grand term with no merit. Banks are not purposely keeping interest rates low to cause a financial crisis. As the central banks have kept interest rates extremely low for a decade, even negative, this affects how much we save and borrow. The biggest point here is to know one thing: bonds. Bonds affect all things from municipalities, construction, to pensions. If interest rates increased currently, the current rate of bonds would drop vastly and actually cause a financial crisis (in the U.S.) due to millions of older persons relying on bonds as sources of income.\"",
"title": ""
}
] |
[
{
"docid": "4860db445cce6425190155c66a485b3c",
"text": "Dividend yields are a product of the dollar amount paid to shareholders and the stock price. Dividends yields rise when a company is shunned by investors. It may be shunned because the earnings and/or dividend are at risk. Recent examples are SDRL and KMI. Most investors would love an 8% yield so I would wonder why the stock is being ignored or shunned.",
"title": ""
},
{
"docid": "acd9a181cdb5204856ef8ff054d77951",
"text": "A bond fund has a 5% yield. You can take 1/.05 and think of it as a 20 P/E. I wouldn't, because no one else does, really. An individual bond has a coupon yield, and a YTM, yield to maturity. A bond fund or ETF usually won't have a maturity, only a yield.",
"title": ""
},
{
"docid": "a9b26b03c038a3e1efc85bed621c6d75",
"text": "The spot curve (or yield curve) demonstrates the different yields at which bonds of differing maturities are being purchased. When the yield curve is upward sloping, longer maturity bonds are being purchased at higher yields. When it's downward sloping, longer maturity bonds are purchased at lower yields. Keep in mind that yield is inversely related to price, so that a high-yield bond will be at a lower price and vice versa. The spot curve can also be used to determine the forward curve. This is based on the concept that an investor, given two options with identical cash flows, will be indifferent in what to purchase (i.e. their prices should be equal). To learn more about this, stay here in /r/finance. To learn anything about your actual question, try /r/personalfinance.",
"title": ""
},
{
"docid": "5887589fd2f004e5ffadf2a922b01929",
"text": "Im creating a 5-year projection on Profit and loss, cash flow and balance sheet and i\\m suppose to use the LIBOR (5 year forward curve) as interest rate on debt. This is the information i am given and it in USD. Thanks for the link. I guess its the USD LIBOR today, in one year, in two years, three years, four years and five years",
"title": ""
},
{
"docid": "2b49a84cc6307004df52a8092a033866",
"text": "\"You are asking multiple questions here, pieces of which may have been addressed in other questions. A bond (I'm using US Government bonds in this example, and making the 'zero risk of default' assumption) will be priced based on today's interest rate. This is true whether it's a 10% bond with 10 years left (say rates were 10% on the 30 yr bond 20 years ago) a 2% bond with 10 years, or a new 3% 10 year bond. The rate I use above is the 'coupon' rate, i.e. the amount the bond will pay each year in interest. What's the same for each bond is called the \"\"Yield to Maturity.\"\" The price adjusts, by the market, so the return over the next ten years is the same. A bond fund simply contains a mix of bonds, but in aggregate, has a yield as well as a duration, the time-and-interest-weighted maturity. When rates rise, the bond fund will drop in value based on this factor (duration). Does this begin to answer your question?\"",
"title": ""
},
{
"docid": "b67e4d82a9e0277becf00e9f95279d94",
"text": "\"You may be thinking about this the wrong way. The yield (Return) on your investment is effectively the market price paid to the investor for the amount of risk assumed for participating. Looking at the last few years, many including myself would have given their left arm for a so-called \"\"meager return\"\" instead of the devastation visited on our portfolios. In essence, higher return almost always (arguably always) comes at the cost of increased risk. You just have to decide your risk profile and investment goals. For example, which of the following scenarios would you prefer? Investment Option A Treasuries, CD's Worst Case: 1% gain Best Case 5% gain Investment option B Equities/Commodities Worst Case: 25% loss Best Case: 40% gain\"",
"title": ""
},
{
"docid": "cd32495b2fc65a7b03e82757110cf866",
"text": "\"The CBOE states, in an investor's guide to Interest Rate Options: The Options’ Underlying Values Underlying values for the option contracts are 10 times the underlying Treasury yields (rates)— 13-week T-bill yield (for IRX), 5-year T-note yield (for FVX), 10-year T-note yield (for TNX) and 30-year T-bond yield (for TYX). The Yahoo! rate listed is the actual Treasury yield; the Google Finance and CBOE rates reflect the 10 times value. I don't think there's a specific advantage to \"\"being contrary\"\", more likely it's a mistake, or just different.\"",
"title": ""
},
{
"docid": "82ea0d1ce78d1bcdea1963a057b8a119",
"text": "I wrote one to check against the N3 to N6 bonds: http://capitalmind.in/2011/03/sbi-bond-yield-calculator/ Things to note:",
"title": ""
},
{
"docid": "74a6a11df8141bf6906945103103b30f",
"text": "Right, I understand minority interest but it is typically reported as a positive under liabilities instead of a negative. For example, when you are calculating the enterprise value of a company, you add back in the minority interest. Enterprise Value= Market Share +Pref Equity + Min Interest+ Total Debt - Cash and ST Equivalents. EV is used to quantify the total price of a company's worth. If you have negative Min Interest on your books, that will make your EV less than it should be, creating an incorrect valuation. This just doesn't make any sense to me. Does it mean that the subsidiary that they had a stake in had a negative earning?",
"title": ""
},
{
"docid": "6657c05898ceb7473983e062b054aa66",
"text": "\"Thanks! Do you know how to calculate the coefficients from this part?: \"\"The difference between the one-year rate and the spread coefficients represents the response to a change in the one-year rate. As a result, the coefficient on the one-year rate and the difference in the coefficients on the one-year rate and spread should be positive if community banks, on average, are asset sensitive and negative if they are liability sensitive. The coefficient on the spread should be positive because an increase in long-term rates should increase net interest income for both asset-sensitive and liability-sensitive banks.\"\" The one-year treasury yield is 1.38% and the ten-year rate is 2.30%. I would greatly appreciate it if you have the time!\"",
"title": ""
},
{
"docid": "e03ffaa92d15930d884ee78fd0f02558",
"text": "Those are the expected yields; they are not guaranteed. This was actually the bread and butter of Graham Newman, mispriced bonds. Graham's writings in the Buffett recommended edition of Securities Analysis are invaluable to bond valuation. The highest yielder now is a private subsidiary of Société Générale. A lack of financial statements availability and the fact that this is the US derivatives markets subsidiary are probably the cause of the higher rates. The cost is about a million USD to buy them. The rest will be similar cases, but Graham's approach could find a diamond; however, bonds are big ticket items, so one should expect to pay many hundreds of thousands of USD per trade.",
"title": ""
},
{
"docid": "9b8d31c1bf06a5a947b64dd97b240149",
"text": "The MIRR formula uses the finance rate to discount negative cash flows, but since the only negative cash flow in the example in in the current period, there's nothing to discount. It's meant to solve problems with IRR like when there are both positive and negative cash flows, which can result in multiple answers for IRR. The example they give isn't a good one for MIRR because it's a simple spend now, earn later scenario, which IRR is perfectly fine for. If you add a negative cashflow somewhere after the first one you'll see the answer change with difference financing rates.",
"title": ""
},
{
"docid": "ffd1525b4aaf43fd36a2ff04c32e8e8d",
"text": "The Vanguard Short-Term Bond Index mutual fund (VBIRX) might fit your need. Apart from 2008, it has only had one single quarter of negative returns, and has always had positive annual returns. If you're looking for an ETF, you might consider iShares Barclays 1-3 Year Credit Bond (CSJ).",
"title": ""
},
{
"docid": "5f66ae91750684fb0c60a2d4db4cbfe4",
"text": "1) Explicitly, how a company's share price in the secondary market affects the company's operations. (Simply: How does it matter to a company that its share price drops?) I have a vague idea of the answer, but I'd like to see someone cover it in detail. 2) Negative yield curves, or bonds/bills with negative yields Thanks!",
"title": ""
},
{
"docid": "8db18dd45326ffa6fad1f55fc05a345a",
"text": "http://www.scottrade.com/online-brokerage/interest-margin-rates.html Rates fluctuate based upon the federal funds rate.",
"title": ""
}
] |
fiqa
|
f5e71dec178721222bb40924fcf7f7f9
|
Invest in (say, index funds) vs spending all money on home?
|
[
{
"docid": "7ec624787c105617815d274c4cc520a0",
"text": "Rules of thumb? Sure - Put down 20% to pay no PMI. The mortgage payment (including property tax) should be no more than 28% of your gross monthly income. These two rules will certainly put a cap on the home price. If you have more than the 20% to put down on the house you like, stop right here. Don't put more down and don't buy a bigger house. Set that money aside for long term investing (i.e. retirement savings) or your emergency fund. You can always make extra payments and shorten the length of the mortgage, you just can't easily get it back. In my opinion, one is better off getting a home that's too small and paying the transaction costs to upsize 5-10 years later than to buy too big, and pay all the costs associated with the home for the time you are living there. The mortgage, property tax, maintenance, etc. The too-big house can really take it toll on your wallet.",
"title": ""
},
{
"docid": "631bc94058215d246ca94f6f20e91eb5",
"text": "The short answer is that it depends on the taxation laws in your country. The long answer is that there are usually tax avoidance mechanisms that you can use which may make it more economically feasible for you to go one way or the other. Consider the following: The long term average growth rate of the stock market in Australia is around 7%. The average interest on a mortgage is 4.75%. Assuming you have money left over from a 20% deposit, you have a few options. You could: 1) Put that money into an index fund for the long term, understanding that the market may not move for a decade, or even move downwards; 2) Dump that money straight into the mortgage; 3) Put that money in an offset account Option 1 will get you (over the course of 30-40 years) around 7% return. If and when that profit is realised it will be taxed at a minimum of half your marginal tax rate (probably around 20%, netting you around 5.25%) Option 2 will effectively earn you 4.75% pa tax free Option 3 will effectively earn you 4.75% pa tax free with the added bonus that the money is ready for you to draw upon on short notice. Of the three options, until you have a good 3+ months of living expenses covered, I'd go with the offset account every single time. Once you have a few months worth of living expenses covered, I would the adopt a policy of spreading your risk. In Australia, that would mean extra contributions to my Super (401k in the US) and possibly purchasing an investment property as well (once I had the capital to positively gear it). Of course, you should find out more about the tax laws in your country and do your own maths.",
"title": ""
},
{
"docid": "88890edbedd3979b6a8244e4a8df8b85",
"text": "\"Here in the UK, the rule of thumb is to keep a lot of equity in your home if you can. I assume here that you have a lot of savings you're considering using. If you only have say 10% of the house price you wouldn't actually have a lot of choice in the matter, the mortgage lender will penalise you heavily for low deposits. The practical minimum is 5%, but for most people a 95% mortgage is just silly (albeit not as silly as the 100% or greater mortgages you could get pre-2008), and you should take serious individual advice before considering it. According to Which, the average in the UK for first-time buyers is 20% (not the best source for that data I confess, but a convenient one). Above 20% is not at all unusual. You'll do an affordability calculation to figure out how much you can borrow, which isn't at all the same as how much you should borrow, but does get you started. Basically you, decide how much a month you can spend on mortgage payments. The calculation will let you put every penny into this if you choose to, but in practice you'll want some discretionary income so don't do that. decide the term of the mortgage. For a young first-time buyer in the UK I think you'd typically take a 25-year term and consider early repayment options rather than committing to a shorter term, but you don't have to. Mortgage lenders will offer shorter terms as long as you can afford the payments. decide how much you're putting into a deposit make subtractions for cost of moving (stamp duty if applicable, fees, removals aka \"\"people to lug your stuff\"\"). receive back a number which is the house price you can pay under these constraints (and of course a breakdown of what the mortgage principle would be, and the interest rate you'll pay). This step requires access to lender information, since their rates depend on personal details, deposit percentage, phase of the moon, etc. Our mortgage advisor did multiple runs of the calculation for us for different scenarios, since we hadn't made up our minds entirely. Since you have not yet decided how much deposit to make, you can use multiple calculations to see the effect of different deposits you might make, up to a limit of your total savings. Putting up more deposit both increases the amount you can borrow for a given monthly payment (since mortgage rates are lower when the loan is a lower proportion of house value), and of course increases the house price you can afford. So unless you're getting a very high return on your savings, £1 of deposit gets you somewhat more than £1 of house, and the calculation will tell you how much more. Once you've chosen the house you want, the matter is even simpler: do you prefer to put your savings in the house and borrow less and make lower payments, or prefer to put your savings elsewhere and borrow more and make higher payments but perhaps have some additional income from the savings. Assuming you maintain a contingency fund, a lower mortgage is generally considered a good investment in the UK, but you need to check what's right for you and compare it to other investments you could make. The issue is complicated by the fact that residential property prices are rising quite quickly in most areas of the UK, and have been for a long time, meaning that highly-leveraged property investment appears to be a really good idea. This leads to the imprudent, but tempting, conclusion that you should buy the biggest house you can possibly afford and watch its value rises. I do not endorse this advice personally, but it's certainly true that in a sharply rising house market it's easier to get away with buying a bigger house than you need, than it is to get away with it in a flat or falling market. As Stephen says, an offset mortgage is a no-brainer good idea if the rate is the same. Unfortunately in the UK, the rate isn't the same (or anyway, it wasn't a couple of years ago). Offset mortgages are especially good for those who make a lot of savings from income and for any reason don't want to commit all of those savings to a traditional mortgage payment. Good reasons for not wanting to do that include uncertainty about your future income and a desire to have the flexibility to actually spend some of it if you fancy :-)\"",
"title": ""
}
] |
[
{
"docid": "f1ce77cace7085d6fd06cd494c162242",
"text": "Let me add a few thoughts that have not been mentioned so far in the other answers. Note that for the decision of buying vs. renting a home i.e. for personal use, not for renting out there's a rule of thumb that if the price for buying is more than 20 year's (cold) rents it is considered rather expensive. I don't know how localized this rule of thumb is, but I know it for Germany which is apparently the OP's country, too. There are obviously differences between buying a house/flat for yourself and in order to rent it out. As others have said, maintenance is a major factor for house owners - and here a lot depends on how much of that you do yourself (i.e. do you have the possibility to trade working hours for costs - which is closely related to financial risk exposure, e.g. increasing income by cutting costs as you do maintenance work yourself if you loose your day-time job?). This plays a crucial role for landlords I know (they're all small-scale landlords, and most of them do put in substantial work themselves): I know quite a number of people who rent out flats in the house where they actually live. Some of the houses were built with flats and the owner lives in one of the flats, another rather typical setup is that people built their house in the way that a smaller flat can easily be separated and let once the kids moved out (note also that the legal situation for the landlord is easier in that special case). I also know someone who owns a house several 100 km away from where they live and they say they intentionally ask a rent somewhat below the market price for that (nice) kind of flat so that they have lots of applicants at the same time and tenants don't move out as finding a new tenant is lots of work and costly because of the distance. My personal conclusion from those points is that as an investment (i.e. not for immediate or future personal use) I'd say that the exact circumstances are very important: if you are (stably) based in a region where the buying-to-rental-price ratio is favorable, you have the necessary time and are able to do maintenance work yourself and there is a chance to buy a suitable house closeby then why not. If this is not the case, some other form of investing in real estate may be better. On the other hand, investing in further real estate closeby where you live in your own house means increased lump risk - you miss diversification into regions where the value of real estate may develop very differently. There is one important psychological point that may play a role with the observed relation between being rich and being landlord. First of all, remember that the median wealth (without pensions) for Germany is about 51 k€, and someone owning a morgage-free 150 k€ flat and nothing else is somewhere in the 7th decile of wealth. To put it the other way round: the question whether to invest 150 k€ into becoming a landlord is of practical relevance only for rich (in terms of wealth) people. Also, asking this question is typically only relevant for people who already own the home they live in as buying for personal use will typically have a better return than buying in order to rent. But already people who buy for personal use are on average wealthier (or at least on the track to become more wealthy in case of fresh home owners) than people who rent. This is attributed to personal characteristics and the fact that the downpayment of the mortgage enforces saving behaviour (which is typically kept up once the house is paid, and is anyways found to be more pronounced than for non-house-owners). In contrast, many people who decide never to buy a home fall short of their initial savings/investment plans (e.g. putting the 150 k€ into an ETF for the next 21 years) and in the end spend considerably more money - and this group of people rarely invests into directly becoming a landlord. Assuming that you can read German, here's a relevant newspaper article and a related press release.",
"title": ""
},
{
"docid": "74b3f1e58bda2b062d3ad816837fd262",
"text": "Certainly, paying off the mortgage is better than doing nothing with the money. But it gets interesting when you consider keeping the mortgage and investing the money. If the mortgage rate is 5% and you expect >5% returns from stocks or some other investment, then it might make sense to seek those higher returns. If you expect the same 5% return from stocks, keeping the mortgage and investing the money can still be more tax-efficient. Assuming a marginal tax rate of 30%, the real cost of mortgage interest (in terms of post-tax money) is 3.5%*. If your investment results in long-term capital gains taxed at 15%, the real rate of growth of your post-tax money would be 4.25%. So in post-tax terms, your rate of gain is greater than your rate of loss. On the other hand, paying off the mortgage is safer than investing borrowed money, so doing so might be more appropriate for the risk-averse. * I'm oversimplifying a bit by assuming the deduction doesn't change your marginal tax rate.",
"title": ""
},
{
"docid": "44aaaaed94c2fcc169b1218230d3f12f",
"text": "Keep in mind, this is a matter of preference, and the answers here are going to give you a look at the choices and the member's view on the positive/negative for each one. My opinion is to put 20% down (to avoid PMI) if the bank will lend you the full 80%. Then, buy the house, move in, and furnish it. Keep track of your spending for 2 years minimum. It's the anti-budget. Not a list of constraints you have for each category of spending, but a rear-view mirror of what you spend. This will help tell you if, in the new house, you are still saving well beyond that 401(k) and other retirement accounts, or dipping into that large reserve. At that point, start to think about where kids fit into your plans. People in million dollar homes tend to have child care that's 3-5x the cost the middle class has. (Disclosure - 10 years ago, our's cost $30K/year). Today, your rate will be about 4%, and federal marginal tax rate of 25%+, meaning a real cost of 3%. Just under the long term inflation rate, 3.2% over the last 100 years. I am 53, and for my childhood right through college, the daily passbook rate was 5%. Long term government debt is also at a record low level. This is the chart for 30 year bonds. I'd also suggest you get an understanding of the long term stock market return. Long term, 10%, but with periods as long as 10 years where the return can be negative. Once you are at that point, 2-3 years in the house, you can look at the pile of cash, and have 3 choices. We are in interesting times right now. For much of my life I'd have said the potential positive return wasn't worth the risk, but then the mortgage rate was well above 6-7%. Very different today.",
"title": ""
},
{
"docid": "2986506f97a9d44efebb9d02d2a580e9",
"text": "4) Beef up my emergency fund, make sure my 401(k) or IRA was fully funded, put the rest into investments. See many past answers. A house you are living in is not an investment. It is a purchase, just as rental is a purchase. Buying a house to rent out is starting a business. If you want to spend the ongoing time and effort and cash running a business, and if you can buy at the right time in the right place for the righr price, this can be a reasonable investment. If you aren't willing to suffer the pains of being a landlord, it's less attractive; you can hire someone to manage it for you but that cuts the income significantly. Starting a business: Remember that many, perhaps most, small businesses fail. If you really want to run a business it can be a good investment, again assuming you can buy at the right time/price/place and are willing and able to invest the time and effort and money to support the business. Nothing produces quick return with low risk.",
"title": ""
},
{
"docid": "8b7a6bdc360c99bedfb60ace81842d06",
"text": "A loan with modest interest is better than paying by cash if there are better alternatives for investment. For example, suppose you are buying a house. Consider two extremes: a) you pay the house entirely by cash, b) the entire buy is financed by the bank. Historically, real (subtracting inflation) house prices (at least in the U.S.) have not risen at all in the long run, and investing all of your own capital in this way may not be optimal. Notice that we are looking at a situation where one is buying a house and living in it in any case. Rent savings are equal in cases a) and b). If instead you were buying a house not for yourself, but as a separate investment for renting out, then you would receive rent. In the case a), the real return on your capital will be zero, whereas in case b), you can invest the cash in e.g. the stock market and get, on average, 7% (the stock market has yielded a 7% real return annually including dividends) annually minus the bank's interest rate. If the interest is lower than 7%, it may be profitable to take the loan. Of course, the final decision depends on your risk preferences.",
"title": ""
},
{
"docid": "699785d1cb3f24db24145681487e024e",
"text": "\"From what I've read, paying down your mortgage -- above and beyond what you'd normally pay -- is indeed an investment but a very poor form of investment. In other words, you could take that extra money you'd apply towards your mortgage and put it in something that has a much higher rate of return than a house. As an extreme example, consider: if I took $6k extra I would have paid toward my mortgage in a single year, and bought a nice performing stock, I could see returns of 2x or 3x. Now, that implies I know which stock to pick, etcetera.. I found a \"\"mortgage or investment\"\" calculator which could be of use as well: http://www.planningtips.com/cgi-bin/prepay_v_invest.pl (scroll to bottom to see the summary and whether or not prepay or invest wins for the numbers you plugged in)\"",
"title": ""
},
{
"docid": "c517ef7ba52c41d23492de2239036a19",
"text": "Investing in property hoping that it will gain value is usually foolish; real estate increases about 3% a year in the long run. Investing in property to rent is labor-intensive; you have to deal with tenants, and also have to take care of repairs. It's essentially getting a second job. I don't know what the word pension implies in Europe; in America, it's an employer-funded retirement plan separate from personally funded retirement. I'd invest in personally funded retirement well before buying real estate to rent, and diversify my money in that retirement plan widely if I was within 10-20 years of retirement.",
"title": ""
},
{
"docid": "f9e8f42cad8fe877bf8d85961940ffd8",
"text": "The big question is whether you will be flexible about when you'll get that house. The overall best investment (in terms of yielding a good risk/return ratio and requiring little effort) is a broad index fund (mutual or ETF), especially if you're contributing continuously and thereby take advantage of cost averaging. But the downside is that you have some volatility: during an economic downturn, your investment may be worth only half of what it's worth when the economy is booming. And of course it's very bad to have that happening just when you want to get your house. Then again, chances are that house prices will also go down in such times. If you want to avoid ever having to see the value of your investment go down, then you're pretty much stuck with things like your high-interest savings account (which sounds like a very good fit for your requirements.",
"title": ""
},
{
"docid": "516c2d122e4ea621f52e35fbf8647cce",
"text": "My figuring (and I'm not an expert here, but I think this is basic math) is: Let's say you had a windfall of $1000 extra dollars today that you could either: a. Use to pay down your mortgage b. Put into some kind of equity mutual fund Maybe you have 20 years left on your mortgage. So your return on investment with choice A is whatever your mortgage interest rate is, compounded monthly or daily. Interest rates are low now, but who knows what they'll be in the future. On the other hand, you should get more return out of an equity mutual fund investment, so I'd say B is your better choice, except: But that's also the other reason why I favour B over A. Let's say you lose your job a year from now. Your bank won't be too lenient with you paying your mortgage, even if you paid it off quicker than originally agreed. But if that money is in mutual funds, you have access to it, and it buys you time when you really need it. People might say that you can always get a second mortgage to get the equity out of it, but try getting a second mortgage when you've just lost your job.",
"title": ""
},
{
"docid": "5f1818e595b153a093011afb8863d5c1",
"text": "what other pieces of info should I consider If you don't have liquid case available for unexpected repairs, then you probably don't want to use this money for either option. The 7% return on the stocks is absolutely not guaranteed. There is a good amount of risk involved with any stock investment. Paying down the mortgage, by contrast, has a much lower risk. In the case of the mortgage, you know you'll get a 2.1% annual return until it adjusts, and then you can put some constraints on the return you'll get after it adjusts. In the case of stocks, it's reasonable to guess that it will return more than 2.1% annually if you hold it long enough. But there will be huge swings from month to month and from year to year. The sooner you need it, the more guaranteed you will want the return to be. If you have few or no stock (or bond)-like assets, then (nearly) all of your wealth is in your house, and that is independent of the remaining balance on your mortgage. If you are going to sell the house soon, then you will want to diversify your assets to protect you against a drop in home value. If you are going to stay in the house forever, then you will eventually need non-house assets to consume. Ultimately, neither option is inherently better; it really depends on what you need.",
"title": ""
},
{
"docid": "8dcbe5ddda15574ace112c0a790e58a5",
"text": "A lot of people on here will likely disagree with me and this opinion. In my opinion the answer lies in your own motives and intentions. If you'd like to be more cognizant of the market, I'd just dive in and buy a few companies you like. Many people will say you shouldn't pick your own stocks, you should buy an index fund, or this ETF or this much bonds, etc. You already have retirement savings, capital allocation is important there. You're talking about an account total around 10% of your annual salary, and assuming you have sufficient liquid emergency funds; there's a lot of non-monetary benefit to being more aware of the economy and the stock market. But if you find the house you're going to buy, you may have to liquidate this account at a time that's not ideal, possibly at a loss. If all you're after is a greater return on your savings than the paltry 0.05% (or whatever) the big deposit banks are paying, then a high yield savings account is the way I'd go, or a CD ladder. Yes, the market generally goes up but it doesn't ALWAYS go up. Get your money somewhere that it's inured and you can be certain how much you'll have tomorrow. Assuming a gain, the gain you'll see will PALE in comparison to the deposits you'll make. Deposits grow accounts. Consider these scenarios if you allocate $1,000 per month to this account. 1) Assuming an investment return of 5% you're talking about $330 return in the first year (not counting commissions or possible losses). 2) Assuming a high yield savings account at 1.25% you're talking about $80 in the first year. Also remember, both of these amounts would be taxable. I'll admit in the event of 5% return you'll have about four times the gain but you're talking about a difference of ~$250 on $12,000. Over three to five years the most significant contributor to the account, by far, will be your deposits. Anyway, as I'm sure you know this is not investment advice and you may lose money etc.",
"title": ""
},
{
"docid": "3da4efe6540dfd85d329d83f22974972",
"text": "\"With no numbers offered, it's not like we can tell you if it's a wise purchase. -- JoeTaxpayer We can, however, talk about the qualitative tradeoffs of renting vs owning. The major drawback which you won't hear enough about is risk. You will be putting a very large portion of your net worth in what is effectively a single asset. This is somewhat risky. What happens if the regional economy takes a hit, and you get laid off? Chances are you won't be the only one, and the value of your house will take a hit at the same time, a double-whammy. If you need to sell and move away for a job in another town, you will be taking a financial hit - that is, if you can sell and still cover your mortgage. You will definitely not be able to walk away and find a new cheap apartment to scrimp on expenses for a little while. Buying a house is putting down roots. On the other hand, you will be free from the opposite risk: rising rents. Once you've purchased the house, and as long as you're living in it, you don't ever need to worry about a local economic boom and a bunch of people moving into town and making more money than you, pushing up rents. (The San Francisco Bay Area is an example of where that has happened. Gentrification has its malcontents.) Most of the rest is a numbers game. Don't get fooled into thinking that you're \"\"throwing away\"\" money on renting - if you really want to, you can save money yourself, and invest a sum approximately equal to your down payment in the stock market, in some diversified mutual funds, and you will earn returns on that at a rate similar to what you would get by building equity in your home. (You won't earn outsized housing-bubble-of-2007 returns, but you shouldn't expect those in the housing market of today anyway.) Also, if you own, you have broad discretion over what you can do with the property. But you have to take care of the maintenance and stuff too.\"",
"title": ""
},
{
"docid": "2c4bc25e5ecf9f7dd4e2a49e2fe716ba",
"text": "\"To add to what other have stated, I recently just decided to purchase a home over renting some more, and I'll throw in some of my thoughts about my decision to buy. I closed a couple of weeks ago. Note that I live in Texas, and that I'm not knowledgeable in real estate other than what I learned from my experiences in the area when I am located. It depends on the market and location. You have to compare what renting will get you for the money vs what buying will get you. For me, buying seemed like a better deal overall when just comparing monthly payments. This is including insurance and taxes. You will need to stay at a house that you buy for at least 5-7 years. You first couple years of payments will go almost entirely towards interest. It takes a while to build up equity. If you can pay more towards a mortgage, do it. You need to have money in the bank already to close. The minimum down payment (at least in my area) is 3.5% for an FHA loan. If you put 20% down, you don't need to pay mortgage insurance, which is essentially throwing money away. You will also have add in closing costs. I ended up purchasing a new construction. My monthly payment went up from $1200 to $1600 (after taxes, insurance, etc.), but the house is bigger, newer, more energy efficient, much closer to my work, in a more expensive area, and in a market that is expected to go up in value. I had all of my closing costs (except for the deposit) taken care of by the lender and builder, so all of my closing costs I paid out of pocket went to the deposit (equity, or the \"\"bank\"\"). If I decide to move and need to sell, then I will get a lot (losing some to selling costs and interest) of the money I have put in to the house back out of it when I do sell, and I have the option to put that money towards another house. To sum it all up, I'm not paying a difference in monthly costs because I bought a house. I had my closing costs taking care of and just had to pay the deposit, which goes to equity. I will have to do maintenance myself, but I don't mind fixing what I can fix, and I have a builder's warranties on most things in the house. To really get a good idea of whether you should rent or buy, you need to talk to a Realtor and compare actual costs. It will be more expensive in the short term, but should save you money in the long term.\"",
"title": ""
},
{
"docid": "abeead7391f1ad7e527550a2bca32fd5",
"text": "\"For some people, it should be a top priority. For others, there are higher priorities. What it should be for you depends on a number of things, including your overall financial situation (both your current finances and how stable you expect them to be over time), your level of financial \"\"education\"\", the costs of your mortgage, the alternative investments available to you, your investing goals, and your tolerance for risk. Your #1 priority should be to ensure that your basic needs (including making the required monthly payment on your mortgage) are met, both now and in the near future, which includes paying off high-interest (i.e. credit card) debt and building up an emergency fund in a savings or money-market account or some other low-risk and liquid account. If you haven't done those things, do not pass Go, do not collect $200, and do not consider making advance payments on your mortgage. Mason Wheeler's statements that the bank can't take your house if you've paid it off are correct, but it's going to be a long time till you get there and they can take it if you're partway to paying it off early and then something bad happens to you and you start missing payments. (If you're not underwater, you should be able to get some of your money back by selling - possibly at a loss - before it gets to the point of foreclosure, but you'll still have to move, which can be costly and unappealing.) So make sure you've got what you need to handle your basic needs even if you hit a rough patch, and make sure you're not financing the paying off of your house by taking a loan from Visa at 27% annually. Once you've gotten through all of those more-important things, you finally get to decide what else to invest your extra money in. Different investments will provide different rewards, both financial and emotional (and Mason Wheeler has clearly demonstrated that he gets a strong emotional payoff from not having a mortgage, which may or may not be how you feel about it). On the financial side of any potential investment, you'll want to consider things like the expected rate of return, the risk it carries (both on its own and whether it balances out or unbalances the overall risk profile of all your investments in total), its expected costs (including its - and your - tax rate and any preferred tax treatment), and any other potential factors (such as an employer match on 401(k) contributions, which are basically free money to you). Then you weigh the pros and cons (financial and emotional) of each option against your imperfect forecast of what the future holds, take your best guess, and then keep adjusting as you go through life and things change. But I want to come back to one of the factors I mentioned in the first paragraph. Which options you should even be considering is in part influenced by the degree to which you understand your finances and the wide variety of options available to you as well as all the subtleties of how different things can make them more or less advantageous than one another. The fact that you're posting this question here indicates that you're still early in the process of learning those things, and although it's great that you're educating yourself on them (and keep doing it!), it means that you're probably not ready to worry about some of the things other posters have talked about, such as Cost of Capital and ROI. So keep reading blog posts and articles online (there's no shortage of them), and keep developing your understanding of the options available to you and their pros and cons, and wait to tackle the full suite of investment options till you fully understand them. However, there's still the question of what to do between now and then. Paying the mortgage down isn't an unreasonable thing for you to do for now, since it's a guaranteed rate of return that also provides some degree of emotional payoff. But I'd say the higher priority should be getting money into a tax-advantaged retirement account (a 401(k)/403(b)/IRA), because the tax-advantaged growth of those accounts makes their long-term return far greater than whatever you're paying on your mortgage, and they provide more benefit (tax-advantaged growth) the earlier you invest in them, so doing that now instead of paying off the house quicker is probably going to be better for you financially, even if it doesn't provide the emotional payoff. If your employer will match your contributions into that account, then it's a no-brainer, but it's probably still a better idea than the mortgage unless the emotional payoff is very very important to you or unless you're nearing retirement age (so the tax-free growth period is small). If you're not sure what to invest in, just choose something that's broad-market and low-cost (total-market index funds are a great choice), and you can diversify into other things as you gain more savvy as an investor; what matters more is that you start investing in something now, not exactly what it is. Disclaimer: I'm not a personal advisor, and this does not constitute investing advice. Understand your choices and make your own decisions.\"",
"title": ""
},
{
"docid": "2139d24685a800e9d6c9b24094764ec4",
"text": "I think there are a few facets to this, namely: Overall, I wouldn't concentrate on paying off the house if I didn't have any other money parked and invested, but I'd still try to get rid of the mortgage ASAP as it'll give you more money that you can invest, too. At the end of the day, if you save out paying $20k in interest, that's almost $20k you can invest. Yes, I realise there's a time component to this as well and you might well get a better return overall if you invested the $20k now that in 5 years' time. But I'd still rather pay off the house.",
"title": ""
}
] |
fiqa
|
a4b2487d04e44c160930f143f8592891
|
How useful is the PEG Ratio for large cap stocks?
|
[
{
"docid": "83ff91d25d43c5069739a553a5a028ad",
"text": "It is not so useful because you are applying it to large capital. Think about Theory of Investment Value. It says that you must find undervalued stocks with whatever ratios and metrics. Now think about the reality of a company. For example, if you are waiting KO (The Coca-Cola Company) to be undervalued for buying it, it might be a bad idea because KO is already an international well known company and KO sells its product almost everywhere...so there are not too many opportunities for growth. Even if KO ratios and metrics says it's a good time to buy because it's undervalued, people might not invest on it because KO doesn't have the same potential to grow as 10 years ago. The best chance to grow is demographics. You are better off either buying ETFs monthly for many years (10 minimum) OR find small-cap and mid-cap companies that have the potential to grow plus their ratios indicate they might be undervalued. If you want your investment to work remember this: stock price growth is nothing more than You might ask yourself. What is your investment profile? Agressive? Speculative? Income? Dividends? Capital preservation? If you want something not too risky: ETFs. And not waste too much time. If you want to get more returns, you have to take more risks: find small-cap and mid-companies that are worth. I hope I helped you!",
"title": ""
}
] |
[
{
"docid": "4331dfcd3dcdaffd04df712bb8c58514",
"text": "Well Company is a small assets company for example it has 450,000,000 shares outstanding and is currently traded at .002. Almost never has a bid price. Compare it to PI a relative company with 350 million marker cap brokers will buy your shares. This is why blue chip stock is so much better than small company because it is much more safer. You can in theory make millions with start up / small companies. You would you rather make stable medium risk investment than extremely high risk with high reward investment I only invest in medium risk mutual funds and with recent rallies I made 182,973 already in half year period.",
"title": ""
},
{
"docid": "be1b32a07b443f30339d679ae66b7750",
"text": "There are the EDHEC-risk indices based on similar hedge fund types but even then an IR would give you performance relative to the competition, which is not useful for most hf's as investors don't say I want to buy a global macro fund, vs a stat arb fund, investors say I want to pay a guy to give me more money! Most investors don't care how the OTHER funds did or where the market went, they want that NAV to go always up , which is why a modified sharpe is probably better.",
"title": ""
},
{
"docid": "e7b44d6fb01103d972318fdd1aa04c52",
"text": "\"You'll generally get a number close to market cap of a mature company if you divide profits (or more accurately its free cash flow to equity) by the cost of equity which is usually something like ~7%. The value is meant to represent the amount of cash you'd need to generate investment income off it matching the company you're looking at. Imagine it as asking \"\"How much money do I need to put into the bank so that my interest income would match the profits of the company I'm looking at\"\". Except replace the bank with the market and other forms of investments that generate higher returns of course and that value would be lower.\"",
"title": ""
},
{
"docid": "81ec14fc701de02e845c914aa6aa8ca4",
"text": "No, this is quite wrong. Almost all hedge funds (and all hedge fund investors) use Sharpe as a *primary* measure of performance. The fact that they don't consider themselves risk-free has no bearing on the issue (that's a bizarre line of reasoning - you're saying Sharpe is only relevant for assets that consider themselves risk-free?). And as AlphaPortfolio rightly points out, most funds have no explicit benchmark and they are usually paid for performance over zero. I've never seen a hedge fund use a benchmark relative information ratio - for starters, what benchmark would you measure a CB arb fund against? Or market neutral quant? Or global macro? Same for CTAs...",
"title": ""
},
{
"docid": "a8f4d0b823ec45f1f14ee70df1183374",
"text": "It sounds to me like you may not be defining fundamental investing very well, which is why it may seem like it doesn't matter. Fundamental investing means valuing a stock based on your estimate of its future profitability (and thus cash flows and dividends). One way to do this is to look at the multiples you have described. But multiples are inherently backward-looking so for firms with good growth prospects, they can be very poor estimates of future profitability. When you see a firm with ratios way out of whack with other firms, you can conclude that the market thinks that firm has a lot of future growth possibilities. That's all. It could be that the market is overestimating that growth, but you would need more information in order to conclude that. We call Warren Buffet a fundamental investor because he tends to think the market has made a mistake and overvalued many firms with crazy ratios. That may be in many cases, but it doesn't necessarily mean those investors are not using fundamental analysis to come up with their valuations. Fundamental investing is still very much relevant and is probably the primary determinant of stock prices. It's just that fundamental investing encompasses estimating things like future growth and innovation, which is a lot more than just looking at the ratios you have described.",
"title": ""
},
{
"docid": "0cc8c705118c1a33d31241664c06f9e3",
"text": "I would think there would be heavy overlap between companies that do well and market cap. You're not going to get to largest market cap without being well managed, or at least in the top percentile. After all, in a normal distribution, the badly managed firms go out of business or never get large.",
"title": ""
},
{
"docid": "4d14c004981443285c0e14072fc0a322",
"text": "The biggest benefit to having a larger portfolio is relatively reduced transaction costs. If you buy a $830 share of Google at a broker with a $10 commission, the commission is 1.2% of your buy price. If you then sell it for $860, that's another 1.1% gone to commission. Another way to look at it is, of your $30 ($860 - $830) gain you've given up $20 to transaction costs, or 66.67% of the proceeds of your trade went to transaction costs. Now assume you traded 10 shares of Google. Your buy was $8,300 and you sold for $8,600. Your gain is $300 and you spent the same $20 to transact the buy and sell. Now you've only given up 6% of your proceeds ($20 divided by your $300 gain). You could also scale this up to 100 shares or even 1,000 shares. Generally, dividend reinvestment are done with no transaction cost. So you periodically get to bolster your position without losing more to transaction costs. For retail investors transaction costs can be meaningful. When you're wielding a $5,000,000 pot of money you can make your trades on a larger scale giving up relatively less to transaction costs.",
"title": ""
},
{
"docid": "bf6022bc93687e36f52a30b212aea8d4",
"text": "I think it's safe to say that Apple cannot grow in value in the next 20 years as fast as it did in the prior 20. It rose 100 fold to a current 730B valuation. 73 trillion dollars is nearly half the value of all wealth in the world. Unfortunately, for every Apple, there are dozens of small companies that don't survive. Long term it appears the smaller cap stocks should beat large ones over the very long term if only for the fact that large companies can't maintain that level of growth indefinitely. A non-tech example - Coke has a 174B market cap with 46B in annual sales. A small beverage company can have $10M in sales, and grow those sales 20-25%/year for 2 decades before hitting even $1B in sales. When you have zero percent of the pie, it's possible to grow your business at a fast pace those first years.",
"title": ""
},
{
"docid": "ef598db00822ea62dc1ec99fb6904b32",
"text": "Thanks. Just to clarify I am looking for a more value-neutral answer in terms of things like Sharpe ratios. I think it's an oversimplification to say that on average you lose money because of put options - even if they expire uselessly 90% of the time, they still have some expected payoff that kicks in 10% of the time, and if the price is less than the expected payoff you will earn money in the long term by investing in put options (I am sure you know this as a PhD student I just wanted to get it out there.)I guess more formally my question would be are there studies on whether options prices correspond well to the diversification benefits they offer from an MPT point of view.",
"title": ""
},
{
"docid": "ce4221079abce3405a8b34b151d4a4d5",
"text": "The Sharpe ratio is, perhaps, the method you are looking for. That said, not really sure beta is a meaningful metric, as there are plenty of safe bets to be made on volatile stocks (and, conversely, unsafe bets to be made on non-volatile ones).",
"title": ""
},
{
"docid": "c26abce4a4b994467b349f12d67579d0",
"text": "\"Below is just a little information on this topic from my small unique book \"\"The small stock trader\"\": The most significant non-company-specific factor affecting stock price is the market sentiment, while the most significant company-specific factor is the earning power of the company. Perhaps it would be safe to say that technical analysis is more related to psychology/emotions, while fundamental analysis is more related to reason – that is why it is said that fundamental analysis tells you what to trade and technical analysis tells you when to trade. Thus, many stock traders use technical analysis as a timing tool for their entry and exit points. Technical analysis is more suitable for short-term trading and works best with large caps, for stock prices of large caps are more correlated with the general market, while small caps are more affected by company-specific news and speculation…: Perhaps small stock traders should not waste a lot of time on fundamental analysis; avoid overanalyzing the financial position, market position, and management of the focus companies. It is difficult to make wise trading decisions based only on fundamental analysis (company-specific news accounts for only about 25 percent of stock price fluctuations). There are only a few important figures and ratios to look at, such as: perhaps also: Furthermore, single ratios and figures do not tell much, so it is wise to use a few ratios and figures in combination. You should look at their trends and also compare them with the company’s main competitors and the industry average. Preferably, you want to see trend improvements in these above-mentioned figures and ratios, or at least some stability when the times are tough. Despite all the exotic names found in technical analysis, simply put, it is the study of supply and demand for the stock, in order to predict and follow the trend. Many stock traders claim stock price just represents the current supply and demand for that stock and moves to the greater side of the forces of supply and demand. If you focus on a few simple small caps, perhaps you should just use the basic principles of technical analysis, such as: I have no doubt that there are different ways to make money in the stock market. Some may succeed purely on the basis of technical analysis, some purely due to fundamental analysis, and others from a combination of these two like most of the great stock traders have done (Jesse Livermore, Bernard Baruch, Gerald Loeb, Nicolas Darvas, William O’Neil, and Steven Cohen). It is just a matter of finding out what best fits your personality. I hope the above little information from my small unique book was a little helpful! Mika (author of \"\"The small stock trader\"\")\"",
"title": ""
},
{
"docid": "af7535b950b00daa65f3e587fcb3e827",
"text": "Most of the “recommendations” are just total market allocations. Within domestic stocks, the performance rotates. Sometimes large cap outperform, sometimes small cap outperform. You can see the chart here (examine year by year): https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1428692400000&chddm=99646&chls=IntervalBasedLine&cmpto=NYSEARCA:VO;NYSEARCA:VB&cmptdms=0;0&q=NYSEARCA:VV&ntsp=0&ei=_sIqVbHYB4HDrgGA-oGoDA Conventional wisdom is to buy the entire market. If large cap currently make up 80% of the market, you would allocate 80% of domestic stocks to large cap. Same case with International Stocks (Developed). If Japan and UK make up the largest market internationally, then so be it. Similar case with domestic bonds, it is usually total bond market allocation in the beginning. Then there is the question of when you want to withdraw the money. If you are withdrawing in a couple years, you do not want to expose too much to currency risks, thus you would allocate less to international markets. If you are investing for retirement, you will get the total world market. Then there is the question of risk tolerance. Bonds are somewhat negatively correlated with Stocks. When stock dips by 5% in a month, bonds might go up by 2%. Under normal circumstances they both go upward. Bond/Stock allocation ratio is by age I’m sure you knew that already. Then there is the case of Modern portfolio theory. There will be slight adjustments to the ETF weights if it is found that adjusting them would give a smaller portfolio variance, while sacrificing small gains. You can try it yourself using Excel solver. There is a strategy called Sector Rotation. Google it and you will find examples of overweighting the winners periodically. It is difficult to time the rotation, but Healthcare has somehow consistently outperformed. Nonetheless, those “recommendations” you mentioned are likely to be market allocations again. The “Robo-advisors” list out every asset allocation in detail to make you feel overwhelmed and resort to using their service. In extreme cases, they can even break down the holdings to 2/3/4 digit Standard Industrial Classification codes, or break down the bond duration etc. Some “Robo-advisors” would suggest you as many ETF as possible to increase trade commissions (if it isn’t commission free). For example, suggesting you to buy VB, VO, VV instead a VTI.",
"title": ""
},
{
"docid": "32a43dc6ba76140884e09956a9c7bee8",
"text": "There is some convergence, but the chart seems to indicate that 5 star funds end up on the upper end of average (3 stars) whereas 1 star funds end up on the lower end of average (1.9 stars) over the long term. I would have thought that the stars would be completely useless as forward looking indicators, but they seem to have been slightly useful?",
"title": ""
},
{
"docid": "99a35d8a21693b605106176989414fed",
"text": "This is Rob Bennett, the fellow who developed the Valuation-Informed Indexing strategy and the fellow who is discussed in the comment above. The facts stated in that comment are accurate -- I went to a zero stock allocation in the Summer of 1996 because of my belief in Robert Shiller's research showing that valuations affect long-term returns. The conclusion stated, that I have said that I do not myself follow the strategy, is of course silly. If I believe in it, why wouldn't I follow it? It's true that this is a long-term strategy. That's by design. I see that as a benefit, not a bad thing. It's certainly true that VII presumes that the Efficient Market Theory is invalid. If I thought that the market were efficient, I would endorse Buy-and-Hold. All of the conventional investing advice of recent decades follows logically from a belief in the Efficient Market Theory. The only problem I have with that advice is that Shiller's research discredits the Efficient Market Theory. There is no one stock allocation that everyone following a VII strategy should adopt any more than there is any one stock allocation that everyone following a Buy-and-Hold strategy should adopt. My personal circumstances have called for a zero stock allocation. But I generally recommend that the typical middle-class investor go with a 20 percent stock allocation even at times when stock prices are insanely high. You have to make adjustments for your personal financial circumstances. It is certainly fair to say that it is strange that stock prices have remained insanely high for so long. What people are missing is that we have never before had claims that Buy-and-Hold strategies are supported by academic research. Those claims caused the biggest bull market in history and it will take some time for the widespread belief in such claims to diminish. We are in the process of seeing that happen today. The good news is that, once there is a consensus that Buy-and-Hold can never work, we will likely have the greatest period of economic growth in U.S. history. The power of academic research has been used to support Buy-and-Hold for decades now because of the widespread belief that the market is efficient. Turn that around and investors will possess a stronger belief in the need to practice long-term market timing than they have ever possessed before. In that sort of environment, both bull markets and bear markets become logical impossibilities. Emotional extremes in one direction beget emotional extremes in the other direction. The stock market has been more emotional in the past 16 years than it has ever been in any earlier time (this is evidenced by the wild P/E10 numbers that have applied for that entire time-period). Now that we are seeing the losses that follow from investing in highly emotional ways, we may see rational strategies becoming exceptionally popular for an exceptionally long period of time. I certainly hope so! The comment above that this will not work for individual stocks is correct. This works only for those investing in indexes. The academic research shows that there has never yet in 140 years of data been a time when Valuation-Informed Indexing has not provided far higher long-term returns at greatly diminished risk. But VII is not a strategy designed for stock pickers. There is no reason to believe that it would work for stock pickers. Thanks much for giving this new investing strategy some thought and consideration and for inviting comments that help investors to understand both points of view about it. Rob",
"title": ""
},
{
"docid": "c28eb69add00010b45511f54bf8ebe0e",
"text": "\"Maria, there are a few questions I think you must consider when considering this problem. Do fundamental or technical strategies provide meaningful information? Are the signals they produce actionable? In my experience, and many quantitative traders will probably say similar things, technical analysis is unlikely to provide anything meaningful. Of course you may find phenomena when looking back on data and a particular indicator, but this is often after the fact. One cannot action-ably trade these observations. On the other hand, it does seem that fundamentals can play a crucial role in the overall (typically long run) dynamics of stock movement. Here are two examples, Technical: suppose we follow stock X and buy every time the price crosses above the 30 day moving average. There is one obvious issue with this strategy - why does this signal have significance? If the method is designed arbitrarily then the answer is that it does not have significance. Moreover, much of the research supports that stocks move close to a geometric brownian motion with jumps. This supports the implication that the system is meaningless - if the probability of up or down is always close to 50/50 then why would an average based on the price be predictive? Fundamental: Suppose we buy stocks with the best P/E ratios (defined by some cutoff). This makes sense from a logical perspective and may have some long run merit. However, there is always a chance that an internal blowup or some macro event creates a large loss. A blended approach: for sake of balance perhaps we consider fundamentals as a good long-term indication of growth (what quants might call drift). We then restrict ourselves to equities in a particular index - say the S&P500. We compare the growth of these stocks vs. their P/E ratios and possibly do some regression. A natural strategy would be to sell those which have exceeded the expected return given the P/E ratio and buy those which have underperformed. Since all equities we are considering are in the same index, they are most likely somewhat correlated (especially when traded in baskets). If we sell 10 equities that are deemed \"\"too high\"\" and buy 10 which are \"\"too low\"\" we will be taking a neutral position and betting on convergence of the spread to the market average growth. We have this constructed a hedged position using a fundamental metric (and some helpful statistics). This method can be categorized as a type of index arbitrage and is done (roughly) in a similar fashion. If you dig through some data (yahoo finance is great) over the past 5 years on just the S&P500 I'm sure you'll find plenty of signals (and perhaps profitable if you calibrate with specific numbers). Sorry for the long and rambling style but I wanted to hit a few key points and show a clever methods of using fundamentals.\"",
"title": ""
}
] |
fiqa
|
6c27e9201a00dcaebe2bea9fe580b344
|
Should I save for my children's university education in Canada, or am I better off paying off loans and gaining debt room?
|
[
{
"docid": "d1772e385625c5a0d5bc135f86cef8cd",
"text": "At the very least I'd look closely at what you could get from the RESP (Registered Education Savings Plan). Depending on your income the government are quite generous with grants and bonds you can get over $11,000 of 'free' money if you qualify for everything CESG - Canada Education Savings Grant By applying for the CESG, up to $7,200 can be directly deposited by the Federal Government into your RESP. The Canada Education Savings Grant section offers information about eligibility requirements for the grant as well as how to use it when the beneficiary enrolls at a post-secondary institution. CLB - Canada Learning Bond CLB is available to children born after December 31st, 2003 if an RESP has been opened on their behalf. Browse the Canada Learning Bond section to find out who is eligible, how to apply, and how much the Government of Canada will contribute to your RESP. I can recomend the TD e-series funds as a low cost way of getting stock market exposure in your RESP So if I were you... As an example if you earn $40k and you pay in the minimum amount to get all the grants ($500/year, $42/month) assuming zero growth you'll have almost $14k of which $5.4k would have been given to you buy the government, if you can afford to save $200/month you'll get over $11,000 from the government",
"title": ""
}
] |
[
{
"docid": "1fabf957eff80d0895815ff0de31c158",
"text": "Dazed, an RESP is a type of account. Within the RESP, you can have cash, investments or even savings vehicles like GICs etc. So depending on where you put the money within the RESP, yes, there is a chance of losing money. If you think your children will attend post secondary education, I don't think that there is a better way to save. The government will match 20% of your contribution, up to a maximum grant of $500 per year. To take advantage of the grant, we contribute $2500 per year to obtain the maximum $500 grant. Hope this helps!",
"title": ""
},
{
"docid": "bc18c3a95b8204077e22822c3017ac1a",
"text": "\"Thank God you have your child back, it is so awesome that you finally found a medical treatment that worked. It must have been a truly trying time in your lives. That situation is an important template in personal finance. Through no fault of your own, a series of events occurred that caused you to spend far more money then you anticipated. Per your post this was complicated by lost income due to economic situations. What is to say that this does not happen again in the future? While we can all hope that our child does not get sick, there are other events that could also fit into this template. Because of this I hate all options you present. Per your post, you are pretty thin with free cash flow and have high income, and yet you are looking to borrow more. That is a recipe for disaster with it being made worse as you are considering putting your home at risk. The 20K per year per kid sounds like a live at the university state school; or, a close by private school. Your finances do not support either option. There are times when the word \"\"No\"\" is in order when answering questions. Doing a live at home community college to university will cost you a total of about 30K per kid rather than the 80K you are proposing. Doing this alone will greatly reduce the risk you are attempting to assume. Doing that and having your child work some, you could cash flow college. That is what I would recommend. Given that you are so thin, you will also have to put constraints on college attendance. No changing major three times, only majors with an employable skills, and studying before partying. It may be worth it to wait a year of two before attending if a decision cannot be made. I was in a similar situation when my son started college. High income, but broke. He worked and went to a community college and was able to pay for the bulk of it himself. From there he obtained a job with a healthy salary and completed his degree at the University. It took him a little longer, but he is debt free and has a fantastic work ethic.\"",
"title": ""
},
{
"docid": "e3d121c1dc35d24f6c41a2c118e5ee39",
"text": "It depends on where you live and what your situation is. If you're a born and bred New Yorker who thinks that White Plains, NY is a stop on the way to Canada, than you're ok. If you're a single person living in downtown Boston, you may want to err on the side of spending less. You may find yourself in a situation in a few short years where you significant other has a job in the suburbs and the prospect of sending your child to a city school is not appealing.",
"title": ""
},
{
"docid": "9075a1b90b624b7d2e67c5e63436e91f",
"text": "Pro tip (I'm a financial advisor): some people aren't lucky enough to have rich parents or relatives who will pay for their education. Those who aren't poor or wealthy are caught in the middle, unable to pay their way and unable to get enough grants to pay their way. Scholarships are never a given. Using debt to increase your intrinsic value is a wise investment.",
"title": ""
},
{
"docid": "3bf2007efcb1606b85d40d03de6b5b05",
"text": "I think about debt as a good option for capital investments that offer a return. In my opinion, a house and clothes you need for that new job are good things to borrow for. School is ok, depending on the amount. Car is ok, if it's a 3 year loan. The rest is not good. You should try to carry as little debt as possible, but don't let it dominate your life. If faced between the choice of paying ahead on your student loan and blowing $300 on an XBox, you should pay the loan. If the choice is between taking your kid to the zoo and paying the loan, have fun at the zoo.",
"title": ""
},
{
"docid": "ad4d2d9c3b94825c000b340d06134c64",
"text": "I would not advise you to go entirely broke in order to clear debts. You could use the cash you have to invest, or render some other services other students need in school while you raise cash from doing so.",
"title": ""
},
{
"docid": "9a0e3038ab0c6e03e0356d28e43f05f3",
"text": "Since your child is 2, he has a long time horizon for investment. Assuming the savings will be used at age 19, that's 17 years. So, I think your best bet is to invest primarily in equities (i.e. stock-based funds) and inside an RESP. Why equities? Historically, equities have outperformed debt and cash over longer time periods. But, equities can be volatile in the short term. So, do purchase some fixed-income investments (e.g. 30% government bonds and money market funds), and do also spread your equity money around as well -- e.g. buy some international funds in addition to Canadian funds. Rebalance every year, and as your child gets closer to university age, start shifting some assets out of equities and into fixed-income, to reduce risk. You don't want the portfolio torpedoed by an economic crisis the year before the money is required! Next, why inside an RESP? Finally... what if your kid doesn't attend post-secondary education? First, you should probably get a Family RESP, not a Group RESP. Group RESPs have strict rules and may forfeit contributions if your kid doesn't attend. Have a look at Choosing the Right RESP and Canadian Capitalist's post The Pros and Cons of Group RESP Plans. In a Family plan, if none of your kids end up attending post-secondary education, then you forfeit the government match money -- the feds get it back through a 20% surtax on withdrawals. But, you'll have the option of rolling over remaining funds into your RRSP, if you have room.",
"title": ""
},
{
"docid": "f3046c7cf6ed9abb2345c7fd839c685f",
"text": "Not a financial adviser, but I think there is some amount of debt that's ok. So I wouldn't suggest someone should go $200k into debt for a BA in English, but if you went somewhat into debt, say $30k, for a major with good job prospects and a high salary, it will probably be a good decision. Which is exactly what I did, and it worked out very well for me. I would advise students to apply to lots of schools with different entry requirements and tuition rates, just to see what their financial aid packages are like. Very often if a $50k a year school really wants you, they'll give you some scholarships to make it more affordable. If they don't give you enough, then you may just need to go to a cheaper school. edit: also, if your family isn't wealthy (like mine) you'll often qualify for federal loans. My loans from 2012 are at 3.5% interest, and my financial adviser is telling me to make the minimum payments so I can put more money in stocks.",
"title": ""
},
{
"docid": "8ddf37e74216c6c1bc579683b1faa7f9",
"text": "I'd like to propose a 4th option: Let your kid(s) take out their own student loans, and then you can make payments directly to help them pay them down. Some advantages to this method: Note the many similarities to the HELOC, which would probably be my second choice.",
"title": ""
},
{
"docid": "1ffb9e75e89a8bbb7048addcba49b656",
"text": "If you have any non-mortgage debt – e.g. a credit card, a line of credit, a student loan, or a car loan – then I would pay that down first. The interest being paid on that kind of borrowed money likely exceeds what you could expect to earn in reasonable investments. If you don't have any non-mortgage debt, and your mortgage is large (e.g. thinking about it keeps you up at night, sometimes :-) then go for the the extra mortgage payment. Also go for the mortgage if you're paying at a relatively high interest rate compared to what you could expect from investments. If your mortgage is small (e.g. it's going to be paid off in a few years) and at a relatively low interest rate, then I would choose the RRSP or TFSA. Unless you're in the top income tax bracket, I would favor the TFSA over RRSP – TFSAs were only introduced this year and any balance there already is likely tiny compared to the RRSP. For retirement, I'm aiming to have equal amounts of RRSP and TFSA money. One option you haven't mentioned is an RESP. If you have children under the age of 18, your bonus could also be used to make next year's RESP contribution and qualify for the 20% matching Canada Education Savings Grant (CESG) from the government.",
"title": ""
},
{
"docid": "51866e5ddfe886708561f21f4af9113d",
"text": "Tl;dr by anecdata I paid for my master's degree from investments/savings with a HELOC backstop It appears you don't have the 62k cash needed for tuition and living expenses so your decision is between financing a degree by selling your investments or a loan. Ultimately this comes down to the yes/no sell decision on the investments. Some things to consider:",
"title": ""
},
{
"docid": "6897089a80d17369614fab853c13e7e6",
"text": "Did you account for college? That's 40k per year in tuition alone. Also I'm not sure you accounted that the number included income forgone, as in if they weren't taking care of the kids they could've been earning more money. The article says the cost to *parents* is 900,000 per kid, but that doesn't mean the parents are actually spending 900,000 per kid. Lots of other things to account for...a couple w/o kids doesn't need to get a 4-bedroom house for example. Does your co-worker own a house? Did you account for the cost of ownership?",
"title": ""
},
{
"docid": "66d1c6d62fb4b1cb88089c3cfedc583b",
"text": "You're doing great. I'd suggest trying get putting 5-10% towards your retirement and the balance to the student loans. You are a little weak in retirement savings, but you have $550k house with 20% equity that you bought at the bottom of the market. That's a smart investment IMO, and in my mind compensates somewhat for your low 401k balance. If I were you, I would retire the student loans ASAP to reduce the money that you have to shell out each month. That way, you have the option of scaling back you or your wife's work somewhat to avoid paying thousands for child care. In my mind, less debt == more options, and I like options.",
"title": ""
},
{
"docid": "16ee117db6c744f258caf872585d7bbc",
"text": "\"Also, since I'm guessing OP isn't flush with cash, not having to come up with additional money to pay the student loans for some time will provide some short-term \"\"debt relief\"\"... possibly reducing the possibility of racking up more CC debt.\"",
"title": ""
},
{
"docid": "2e2ee7ee87735ca5b9e3bfd3e33331d1",
"text": "My son is in a similar situation where he is 21 and in college. My wife and I claimed him as a dependant on our taxes last year. He had still been able to get some student loans as a dependant as well as scholarships. I have told him that we will not cosign on a loan for him. It isn't because we don't like our son, it is simply because too many unexpected things can happen. He has been working multiple jobs which is one thing I would suggest as well as donating plasma for extra money to have a social life. As an electrical engineering major he doesn't have much time to be social. He cuts rent by having roommates and does most of his own cooking to help with food costs. The main thing he does to keep his costs under control is attends a school that isn't outrageously expensive. An expensive school does not offer as much benefit for an undergrad degree as it might for a graduate degree. Another option is to look for a job that had some sort of tuition assistance. Another option along that same line is look into military service either active duty or reserves as there is tuition help to be found there. There are options that don't involve debt. As a side note my son used a student loan last year however, this coming year he has his budget figured out and he will not be needing one at all.",
"title": ""
}
] |
fiqa
|
066a3de7c7bb4873a5da9b895f2501ca
|
Is a credit card deposit a normal part of the vehicle purchase process
|
[
{
"docid": "2c91d469adaf30cb4392e92342f5ad50",
"text": "\"Unfortunately, it's not unusual enough. If you're looking for a popular car and the dealer wants to make sure they aren't holding onto inventory without a guarantee for sale, then it's a not completely unreasonable request. You'll want to make sure that the deposit is on credit card, not cash or check, so you can dispute if an issue arises. Really though, most dealers don't do this, requiring a deposit, pre sale is usually one of those hardball negotiating tactics where the dealer wrangles you into a deal, even if they don't have a good deal to make. Dealers may tell you that you can't get your deposit back, even if they don't have the car you agreed on or the deal they agreed to. You do have a right for your deposit back if you haven't completed the transaction, but it can be difficult if they don't want to give you your money back. The dealer doesn't ever \"\"not know if they have that specific vehicle in stock\"\". The dealer keeps comprehensive searchable records for every vehicle, it's good for sales and it's required for tax records. Even when they didn't use computers for all this, the entire inventory is a log book or phone call away. In my opinion, I would never exchange anything with the dealer without a car actually attached to the deal. I'd put down a deposit on a car transfer if I were handed a VIN and verified that it had all the exact options that we agreed upon, and even then I'd be very cautious about the condition.\"",
"title": ""
}
] |
[
{
"docid": "5732591aae33f59231af5cb46932ab57",
"text": "A credit card is not a bank account. It is, essentially, a contract to extend a line of credit on an as needed basis through a process accepted by the provider(purchase through approved vender, cash advance, etc). There is no mechanism for the bank to accept or hold a deposit. While most card issuers will simple retain the money for a period of up 30-60 days to apply toward transactions, I have had a card that actually charged a fee for having a negative balance in excess of $10 for more than 30 days(the fee was $10/month). So no you can not DEPOSIT money on any credit card. You need an account that accepts deposits to make a deposit.",
"title": ""
},
{
"docid": "9e814218015e61c473d66135a4cfd495",
"text": "I agree with the deposit part. But if you are buying a new car, the loan term should meet the warranty term. Assuming you know you won't exceed the mileage limits, it's a car with only maintainence costs and the repayment cost at that point.",
"title": ""
},
{
"docid": "013e7bbdcf2f60f8c14ed6aeb7d90a95",
"text": "\"This is most likely protecting Square's relationship with Visa/Mastercard/AMEX/etc. Credit card companies typically charge their customers a much higher interest rate with no grace period on cash advances (withdrawals made from an ATM using a credit card). If you use Square to generate something that looks like a \"\"merchandise transaction\"\" but instead just hand over a wad of banknotes, you're forcing the credit card company to apply their cheaper \"\"purchases\"\" interest rate on the transaction, plus award any applicable cashback offers†, etc. Square would absolutely profit off of this, but since it would result in less revenue for the partner credit card companies, that would quickly sour the relationship and could even result in them terminating their agreements with Square altogether. † This is the kind of activity they are trying to prevent: 1. Bill yourself $5,000 for \"\"merchandise\"\", but instead give yourself cash. 2. Earn 1.5% cashback ($75). 3. Use $4,925 of the cash and a $75 statement credit to pay your credit card statement. 4. Pocket the difference. 5. Repeat. Note, the fees involved probably negate any potential gain shown in this example, but I'm sure with enough creative thinking someone would figure out a way to game the system if it wasn't expressly forbidden in the terms of service\"",
"title": ""
},
{
"docid": "f3e72bdefbd10e71f4e78095e8889f4b",
"text": "It will depend on credit they are offering you during the period being covered. A gas station locks up what they expect is the maximum transaction for most people. When the prices of gas spikes some people have the pump turn off before the tank is filled, therefore they need to use a 2nd card to complete the purchase. Before you arrive at a hotel they lockup the cost of one night in the hotel, that way they still sell the room for one night if you never show. While you are there they lockup the cost of what you could owe them. This would include the cost of the room, and average room service or bar service. For a car rental, it would be based on the risk they perceive. They don't want to try and collect against a card you gave them when you reserved the car, or when you picked up the car, only to find that you have gone over the limit. Some online systems will let you see what is pending against your card. Others could provide that information to you over the phone.",
"title": ""
},
{
"docid": "ca6825a395b2bee9c84e0f46ececc662",
"text": "\"At one point in my life I sold cars and from what I saw, three things stick out. Unless the other dealership was in the same network, eg ABC Ford of City A, and ABC Ford of City B, they never had possession of that truck. So, no REAL application for a loan could be sent in to a bank, just a letter of intent, if one was sent at all. With a letter of intent, a soft pull is done, most likely by the dealership, where they then attached that score to the LOI that the bank has an automated program send back an automatic decline, an officer review reply, or a tentative approval (eg tier 0,1,2...8). The tentative approval is just that, Tentative. Sometime after a lender has a loan officer look at the full application, something prompts them to change their offer. They have internal guidelines, but lets say an app is right at the line for 2-3 of the things they look at, they chose to lower the credit tier or decline the app. The dealership then goes back and looks at what other offers they had. Let's say they had a Chase offer at 3.25% and a CapOne for 5.25% they would say you're approved at 3.5%, they make their money on the .25%. But after Chase looks into the app and sees that, let's say you have been on the job for actually 11 months and not 1 year, and you said you made $50,000, but your 1040 shows $48,200, and you have moved 6 times in the last 5 years. They comeback and say no he is not a tier 2 but a tier 3 @ 5.5%. They switch to CapOne and say your rate has in fact gone up to 5.5%. Ultimately you never had a loan to start with - only a letter of intent. The other thing could be that the dealership finance manager looked at your credit score and guessed they would offer 3.5%, when they sent in the LOI it came back higher than he thought. Or he was BSing you, so if you price shopped while they looked for a truck you wouldn't get far. They didn't find that Truck, or it was not what they thought it would be. If a dealership sees a truck in inventory at another dealer they call and ask if it's available, if they have it, and it's not being used as a demo for a sales manager, they agree to send them something else for the trade, a car, or truck or whatever. A transfer driver of some sort hops in that trade, drives the 30 minutes - 6 hours away and comes back so you can sign the Real Application, TODAY! while you're excited about your new truck and willing to do whatever you need to do to get it. Because they said it would take 2-5 days to \"\"Ship\"\" it tells me it wasn't available. Time Kills Deals, and dealerships know this: they want to sign you TODAY! Some dealerships want \"\"honest\"\" money or a deposit to go get the truck, but reality is that that is a trick to test you to make sure you are going to follow through after they spend the gas and add mileage to a car. But if it takes 2 days+, The truck isn't out there, or the dealer doesn't have a vehicle the other dealership wants back, or no other dealership likes dealing with them. The only way it would take that long is if you were looking for something very rare, an odd color in an unusual configuration. Like a top end model in a low selling color, or configuration you had to have that wouldn't sell well - like you wanted all the options on a car except a cigarette lighter, you get the idea. 99.99% of the time a good enough truck is available. Deposits are BS. They don't setup any kind of real contract, notice most of the time they want a check. Because holding on to a check is about as binding as making you wear a chicken suit to get a rebate. All it is, is a test to see if you will go through with signing the deal. As an example of why you don't let time pass on a car deal is shown in this. One time we had a couple want us to find a Cadillac Escalade Hybrid in red with every available option. Total cost was about $85-90k. Only two new Red Escalade hybrids were for sale in the country at the time, one was in New York, and the other was in San Fransisco, and our dealership is in Texas, and neither was wanting to trade with us, so we ended up having to buy the SUV from one of the other dealerships inventory. That is a very rare thing to do by the way. We took a 25% down payment, around $20,000, in a check. We flew a driver to wherever the SUV was and then drove it back to Texas about 4 days later. The couple came back and hated the color, they would not take the SUV. The General Manager was pissed, he spent around $1000 just to bring the thing to Texas, not to mention he had to buy the thing. The couple walked and there was nothing the sales manager, GM, or salesman could do. We had not been able to deliver the car, and ultimately the dealership ate the loss, but it shows that deposits are useless. You can't sell something you don't own, and dealerships know it. Long story short, you can't claim a damage you never experienced. Not having something happen that you wanted to have happen is not a damage because you can't show a real economic loss. One other thing, When you sign the paperwork that you thought was an application, it was an authorization for them to pull your credit and the fine print at the bottom is boiler plate defense against getting sued for everything imaginable. Ours took up about half of one page and all of the back of the second page. I know dealing with car dealerships is hard, working at them is just as hard, and I'm sorry that you had to deal with it, however the simplest and smoothest car deals are the ones where you pay full price.\"",
"title": ""
},
{
"docid": "39bcb0e40e9aeb3a52b16e3a23dae31e",
"text": "\"Retail purchases are purchases made at retail, i.e.: as a consumer/individual customer. That would include any \"\"standard\"\" individual expenditure, but may exclude wholesale sales or purchases from merchants who identify themselves as service providers to businesses. Specifics of these limitations really depend on your card issuer, and you should inquire with the customer service at what are their specific eligibility requirements. As an example, here in the US many cards give high cash-back for gasoline purchases, but only at \"\"retail\"\" locations. That excludes wholesale/club sellers like Costco, for example.\"",
"title": ""
},
{
"docid": "9aa425c9c92adc20f4795526b3aebf2a",
"text": "Very good answers as to how 0% loans are typically done. In addition, many are either tied to a specific large item purchase, or credit cards with a no interest period. On credit card transactions the bank is getting a fee from the retailer, who in turn is giving you a hidden charge to cover that fee. In the case of a large purchase item like a car, the retailer is again quite likely paying a fee to cover what would be that interest, something they are willing to do to make the sale. They will typically be less prone to deal as low a price in negotiation if you were not making that deal, or at times they may offer either a rebate or special low to zero finance rates, but you don't get both.",
"title": ""
},
{
"docid": "230bf99815c0f1b4b3d8aea5c08f2c0f",
"text": "The car dealership doesn't care where you get the cash; they care about it becoming their money immediately and with no risk or complications. Any loan or other arrangements you make to raise the cash is Your Problem, not theirs, unless you arrange the loan through them.",
"title": ""
},
{
"docid": "707710b1f52ebd3e174ecd48ca16ad0c",
"text": "\"I have never had a credit card and have been able to function perfectly well without one for 30 years. I borrowed money twice, once for a school loan that was countersigned, and once for my mortgage. In both cases my application was accepted. You only need to have \"\"good credit\"\" if you want to borrow money. Credit scores are usually only relevant for people with irregular income or a past history of delinquency. Assuming the debtor has no history of delinquency, the only thing the bank really cares about is the income level of the applicant. In the old days it could be difficult to rent a car without a credit car and this was the only major problem for me before about 2010. Usually I would have to make a cash deposit of $400 or something like that before a rental agency would rent me a car. This is no longer a problem and I never get asked for a deposit anymore to rent cars. Other than car rentals, I never had a problem not having a credit card.\"",
"title": ""
},
{
"docid": "c03c89b9c8a7b1f7dc27747751e1c316",
"text": "\"This is completely disgusting, utterly unethical, deeply objectionable, and yes, it is almost certainly illegal. The Federal Trade Commission has indeed filed suit, halted ads, etc in a number of cases - but these likely only represent a tiny percentage of all cases. This doesn't make what the car dealer's do ok, but don't expect the SWAT team to bust some heads any time soon - which is kind of sad, but let's deal with the details. Let's see what the Federal Trade Commission has to say in their article, Are Car Ads Taking You for a Ride? Deceptive Car Ads Here are some claims that may be deceptive — and why: Vehicles are available at a specific low price or for a specific discount What may be missing: The low price is after a downpayment, often thousands of dollars, plus other fees, like taxes, licensing and document fees, on approved credit. Other pitches: The discount is only for a pricey, fully-loaded model; or the reduced price or discount offered might depend on qualifications like the buyer being a recent college graduate or having an account at a particular bank. “Only $99/Month” What may be missing: The advertised payments are temporary “teaser” payments. Payments for the rest of the loan term are much higher. A variation on this pitch: You will owe a balloon payment — usually thousands of dollars — at the end of the term. So both of these are what the FTC explicitly says are deceptive practices. Has the FTC taken action in cases similar to this? Yes, they have: “If auto dealers make advertising claims in headlines, they can’t take them away in fine print,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “These actions show there is a financial cost for violating FTC orders.” In the case referenced above, the owners of a 20+ dealership chain was hit with about $250,000 in fines. If you think that's a tiny portion of the unethical gains they made from those ads in the time they were running, I'd say you were absolutely correct and that's little more than a \"\"cost of doing business\"\" for unscrupulous companies. But that's the state of the US nation at this time, and so we are left with \"\"caveat emptor\"\" as a guiding principle. What can you do about it? Competitors are technically allowed to file suit for deceptive business practices, so if you know any honest dealers in the area you can tip them off about it (try saying that out loud with a serious face). But even better, you can contact the FTC and file a formal complaint online. I wouldn't expect the world to change for your complaint, but even if it just generates a letter it may be enough to let a company know someone is watching - and if they are a big business, they might actually get into a little bit of trouble.\"",
"title": ""
},
{
"docid": "d48785f98d580c2f0bba55a4e048f87c",
"text": "\"You do not say what country you are in. This is an answer for readers in the UK. Most normal balance transfer deals are only for paying off other credit cards. However there are \"\"money transfer\"\" deals that will pay the money direct to your bank account. The deals aren't as good as balance transfer deals but they are often a competitive option compared to other types of borrowing. Another option depending on how much you need to borrow and your regular spending habits is to get a card with a \"\"0% for purchases\"\" deal and use that card for your regular shopping, then put the money you would have spent on your regular shopping towards the car.\"",
"title": ""
},
{
"docid": "b427ead79d6bc0ca641b104f8705fd3c",
"text": "I would presume this goes entirely through the credit card network rather than the banking network. I am guessing that it's essentially the same operation as if you had returned something purchased on a card to the store for credit, but I'm not sure whether it really looks like a vendor credit to the network or if it is marked as a different type of transaction.",
"title": ""
},
{
"docid": "d2256b53f1ae824a23694655782ddbbd",
"text": "Basically you put down a deposit ($49-$200) and then you get a credit limit related to that card. I think it's got a 29% APR (might wanna double check that) and you have to have a checking account. Once you can show a good payment history with it and that you've had it for a little while it will open up more options with capital one and your credit in general. The one I have had an original credit limit of $300 and now has one of $700 after 7 months. Also, make sure you're going onto Credit Karma to get updates on your credit and see what they suggest you can work on.",
"title": ""
},
{
"docid": "69eacef6ab630c1a74ab135faf233369",
"text": "\"When processing credit/debit cards there is a choice made by the company on how they want to go about doing it. The options are Authorization/Capture and Sale. For online transactions that require the delivery of goods, companies are supposed to start by initially Authorizing the transaction. This signals your bank to mark the funds but it does not actually transfer them. Once the company is actually shipping the goods, they will send a Capture command that tells the bank to go ahead and transfer the funds. There can be a time delay between the two actions. 3 days is fairly common, but longer can certainly be seen. It normally takes a week for a gas station local to me to clear their transactions. The second one, a Sale is normally used for online transactions in which a service is immediately delivered or a Point of Sale transaction (buying something in person at a store). This action wraps up both an Authorization and Capture into a single step. Now, not all systems have the same requirements. It is actually fairly common for people who play online games to \"\"accidentally\"\" authorize funds to be transferred from their bank. Processing those refunds can be fairly expensive. However, if the company simply performs an Authorization and never issues a capture then it's as if the transaction never occurred and the costs involved to the company are much smaller (close to zero) I'd suspect they have a high degree of parents claiming their kids were never authorized to perform transactions or that fraud was involved. If this is the case then it would be in the company's interest to authorize the transaction, apply the credits to your account then wait a few days before actually capturing the funds from the bank. Depending upon the amount of time for the wait your bank might have silently rolled back the authorization. When it came time for the company to capture, then they'd just reissue it as a sale. I hope that makes sense. The point is, this is actually fairly common. Not just for games but for a whole host of areas in which fraud might exist (like getting gas).\"",
"title": ""
},
{
"docid": "8d71273268765dcba15255bd606fe944",
"text": "I had one of those banks that reordered transactions. Deposit cash first thing in the morning means you should have money in your account, right? Nah son. First they're going to take your balance at the beginning of the day, then they'll deduct all of the transactions you made that day, in order from largest to smallest. Did one of those put you in the red (ignoring the deposit)? Time to apply an overdraft fee to that one and every single one that comes after (in order of largest purchase to smallest, mind you). Only then would they apply your deposit, but, for many, that wasn't enough to cover the overdraft fees. I eventually received money from either a class action or a CFPB thing, but not enough to cover the amount they took in fees through that scheme. Thankfully, my deposits were large enough to at least cover the fees, so I didn't have those damnable daily fees on top of it all.",
"title": ""
}
] |
fiqa
|
9d81d18cb904961eceddab84d97dd79a
|
How will I pay for college?
|
[
{
"docid": "74d11f73384f97df8cd325a8fd3f3011",
"text": "\"First, it's clear from your story that you very likely should be able to receive some financial aid. That may be in the form of loans or, better, grants in which you just get free money to attend college. For example, a Pell grant. You won't get all you'd need for a free ride this way, but you can really make a dent in what you'd pay. The college may likely also provide financial aid to you. In order to get any of this, though, you have to fill out a FAFSA. There are deadlines for this for each state and each college (there you would ask individually). I'd get looking into that as soon as you can. Do student loans have to be paid monthly? Any loan is a specific agreement between a lender and a borrower, so any payment terms could apply, such as bimonthly or quarterly. But monthly seems like the most reasonable assumption. Generally, you should assume the least favorable (reasonably likely) terms for you, so that you are prepared for a worst-case scenario. Let's say monthly. Can I just, as I had hoped, borrow large sums of money and only start paying them after college? Yes. That is a fair summary of all a student loan is. Importantly, though, some loans are federal government subsidized loans for which the interest on the loan is paid for you as long as you stay in college + 6 months (although do check that is the current situation). Unsubsidized loans may accrue interest from the start of the loan period. If you have the option, obviously try hard to get the subsidized loans as the interest can be significant. I made a point to only take subsidized loans. WARNING: Student loans currently enjoy a (nearly?) unique status in America as being one of the only loan types that are not forgivable in bankruptcy. This means that if you leave college with $100,000 in debt that begins accruing interest, there is no way for you to get out of it short of fleeing the country or existence. And at that point the creditors may come after your mother for the balance. These loans can balloon into outrageous amounts due to compounding interest. Please have a healthy fear of student loans. For more on this, listen to this hour long radio program about this. Would a minimum wage job help, Of course it will \"\"help\"\" but will it \"\"help enough\"\"? That depends on how much you work. If you make $7.50/hr and work 20 hrs/week for all but 3 weeks of the year, after taxes you will be adding about $6,000 to offset your costs. In 3 years of college (*see below), that's $18,000, which, depending on where you go, is not bad at helping defray costs. If you are at full-time (40 hrs), then it is $12k/yr or $36k toward defraying costs. These numbers are nothing to sniff at. Do you have any computer/web/graphics skills? It's possible you could find ways to make more than minimum wage if you learn some niche IT industry skill. (If I could go back and re-do those years I wouldn't have wasted much time delivering pizzas and would have learned HTML in the 90s and would have potentially made some significant money.) would college and full-time job be manageable together? That's highly specific to each situation (which job? how far a commute to it? which major? how efficient are you? how easily do you learn?) but I would say that, for the most part, it's not a good idea, not only for the academic-achievement side of it, but the personal-enrichment aspect of college. Clubs, sports, relationships, activities, dorm bull sessions, all that good stuff, they deserve their space and time and it'd be a shame to miss out on that because you're on the 2nd shift at Wal-Mart 40hrs/week. How do I find out what scholarships, grants, and financial aid I can apply for? Are you in a high school with a career or guidance counselor? If so, go to that person about this as a start. If not, there are tons of resources out there. Public libraries should have huge directories of scholarships. The Federal Student Loan program has a website. There are also a lot of resources online found by just searching Google for scholarships--though do be careful about any online sources (including this advice!). Sermon: Lastly, please carefully consider the overall cost vs. benefit to you. College in 2012 is anything but cheap. A typical price for a textbook is $150 or more. Tuition and board can range over $40k at private colleges. There is a recent growing call for Americans to re-think the automatic nature of going to college considering the enormous financial burden it puts many families under. Charles Murray, for one, has put out a book suggesting that far too many students go to college now, to society's and many individuals' detriment (he's a controversial thinker, but I think some of his points are valid and actually urgent). With all that said, consider ways to go to college but keep costs down. Public colleges in your state will almost always be significantly cheaper than private or out-of-state. Once there, aim for As and Bs--don't cheat yourself out of what you pay for. And lastly, consider a plan in which you complete college in three years, by attending summer courses. This website has a number of other options for helping to reduce the cost of college.\"",
"title": ""
},
{
"docid": "a2d11b7654ee1eb9c61a511d77b08a9b",
"text": "Firstly, good on you for thinking about it before you commit to it. Next. Chelonian provides lots of detail. Read that answer. Consider the cost of going. Use your local community college. Use a state school. Get a job as an intern or another entry level position, with an employer that will reimburse you for education. Consider the military in the United State. Consider not going. That last one sounds rough, but do you have a very clear idea in your mind what you want to do for a living? I would suggest that at today's costs, figuring out what you want to do should be done before you commit to school.",
"title": ""
},
{
"docid": "78ab9aba895609270936e9fa23a1b938",
"text": "\"You sound like you're well educated, well spoken, and resourceful, so I'm going to assume that you are somewhere in the neighborhood of top 5% material. That means you can pretty much do anything you want to if you put enough effort into it. There are two types of people in this world: those who run the world and those who live comfortably in it (and, of course, everyone else, but they are irrelevant to the discussion). Who do you want to be? I've been around a lot of wildly successful people, and they have two consistent traits: connections and freedom. First, everyone always told me that \"\"it's not what you know, it's who you know\"\", but I never appreciated it until after college. The world runs on connections. The more connections you have, and the more successful they are, the more successful you will be. Second, the more freedom you have, the more opportunity you will have to take chances, which is how you become wildly successful. Freedom comes from not being in debt (first) and having money (second). Why do you think Harvard grads are the guys that end up having so much money and power? It's probably because they grew up in a rich family which provided them money (freedom) and a wide social circle of rich people (connections). So you're not rich. What to do? Well, the easiest way to get into that group is to go to college with them. And that means you need to get into Harvard or another Ivy League. Stanford if you want to be an engineer. College will be where you will make your most intense and long-lasting friendships. That roommate at Harvard that you went on the crazy four-day road trip with may someday be CEO of a company... and when he needs a CIO, you can be damn sure you'll be at the top of the list if you're qualified. But Harvard costs a lot of money...which means you'll be in debt, a lot, when you get out of college. You'll have lots of rich, important friends(connections), but you'll be deeply in debt (no freedom). Most of these type of people end up becoming consultants at big firms because they pay well. You'll live a comfortable life and pay off your student loans in five or 10 years. Then you'll continue to live comfortably, but at that point you'll be too old to take huge chances and too comfortable to change things (or perhaps you'll have a big mortgage = no freedom). With a heavy debt load, it's almost impossible to, say, join an early stage startup and really be able to take huge chances. You can do it, maybe. Or, as an alternate option, you can do what I did. Go to a cheap state school and graduate with no debt. That puts you on the other side of the fence: freedom, but no connections. Then, in order to be successful, you have to figure out how to get connections. Goldman Sachs won't hire you, and everyone you meet is going to automatically assume you're mediocre because of where you went to college. At this point, your only option is to take big chances. Move to New York or San Francisco, offer to work for free as an intern somewhere or something. It can be done, and it's really not too hard, you just have to have lots of spending restraint because the little money you have has to go a long way. So what are the other options? Well, some people are recommending that you think about not going to college at all. That will certainly save you money and give you a four year head start on whatever you decide to do (freedom), but you'll forever be branded as that guy without a college degree. Think my second option above but just two or three times worse. You won't even get that free internship, and you'll be that weird guy at dinner parties who can\"\"t answer the first question \"\"So, where did you go to college?\"\". It doesn't matter if you're self-taught; life isn't a meritocracy. If you're very good, you'll end up getting a nice cushy job pushing ones and zeros. A nice cushy golden handcuff job. Well, you could go to community college. They're certainly cheap. You can spend very little money so you'll end up with fairly good freedom. I might add, though, that community colleges teach trades, and not high-level things like management and complex architecture. You'll be behind technically, but not as bad as if you didn't go at all. How about connections? Your fellow students will probably lack ambition, money, and connections. They'll be candidates for entry-level wage slave jobs at Fortune 500 companies after they graduate. If they get lucky, they'll work up to middle management. There's no alumni association, and there's certainly no \"\"DeVry Club\"\" in downtown Boston. At New York and Silicon Valley dinner parties, having a community college degree is almost as bad as having nothing at all. Indeed, the entire value of the community college degree will be what you learn, and you'll be learning at the speed and level of your classmates. My advice? If you get into an Ivy League school, go and hope you get some grants to help you out. The debt will suck, but you'll be well positioned for the future. Otherwise, go to a cheap second-tier school where you can get a large scholarship. There are also lots of third-party scholarships that are out there on the Internet you can get. I got a couple from local organizations. Don't work during college. Focus on expanding your network instead; the future value of a minimum wage job while you're trying to go through school is practically zero.\"",
"title": ""
},
{
"docid": "56ab1e217ee6d4935d741186be8d3634",
"text": "One potentially useful option to avoid the crippling tuition fees in the states is to instead get your degree abroad. Numerous European countries have very low tuition fees, even for international students. Tuition can be as low as a 1000 EUR and housing is generally also very affordable. There is of course the language barrier but many universities are oriented towards receiving international students, providing relocation assistance and offering courses in English. As a bonus, most Europeans speak excellent English and are generally quite happy to practice it so you shouldn't have any problems off-campus either. Going to the UK is an option but likely considerably more expensive than colleges in mainland Europe. This article, while written for a Nigerian audience, lists some of the most attractive options for the international student. The quality of the education is also generally very high for these colleges. As an example Belgium, one of the cheapest options in the list, has two universities ranked in the Top 100: Leuven and Ghent. Many other German, French, Dutch or Scandinavian universities figure in that list.",
"title": ""
},
{
"docid": "4f741b5e69fc8bdf210951b55a0ed4c7",
"text": "There are some useful comments about the tradeoffs of the decisions in front of you. Intertwined with the financial choices, hopefully you can see a map opening up. Make a little chart if it helps. Benefit and Cost. If you're looking for financial options, you will have to also add more columns to that chart: Option and Cost. An example is the comment on making connections with rich kids. Trust fund babies are everywhere in this country. Did you know any rich kids while growing up? How were those rich kids you knew of back then... in your school... in your town? How did they treat you? Were you ever invited to their parties or gatherings? Now there's an opportunity for the privilege to pay a lot of money to sit in a classroom next to them? Even in the early days of American history with merit based millionaires... tycoons who made it rich by the seat of their pants. At fancy dinner parties and soirees, a new term emerged to put each other again out of reach: old money (the deserving) and new money (uncultured climbers). That's my bias. You'll have some of your own. What is important to YOU has to come through because these days, the price tag of any higher education implies a considerable piece of your life's timeline will be committed to... something. Make sure you get what you feel is worth that commitment. Take stock of what has been said here by the others, but put a value on those choices and seriously consider what you're willing to pay for... and what you're not. There is no formula for your success as there's been thousands of exceptions... ESID (Every Situation is Different).",
"title": ""
}
] |
[
{
"docid": "54df40bf61e056d37576ccc99111fa4c",
"text": "So many answers here are missing the mark. I have a $100k mortgage--because that isn't paid off, I can't buy a car? That's really misguided logic. You have a reasonably large amount of college debt and didn't mention any other debt-- It's a really big deal what kind of debt this is. Is it unsecured debt through a private lender? Is it a federal loan from the Department of Education? Let's assume the worst possible (reasonable) situation. You lose your job and spend the next year plus looking for work. This is the boat numerous people out of college are in (far far far FAR more than the unemployment rates indicate). Federal loans have somewhat reasonable (indentured servitude, but I digress) repayment strategies; you can base the payment on your current income through income-based and income-continent repayment plans. If you're through a private lender, they still expect payment. In both cases--because the US hit students with ridiculous lending practices, your interest rates are likely 5-10% or even higher. Given your take-home income is quite large and I don't know exactly the cost of living where you live--you have to make some reasonable decisions. You can afford a car note for basically any car you want. What's the worst that happens if you can't afford the car? They take it back. If you can afford to feed yourself, house yourself, pay your other monthly bills...you make so much more than the median income in the US that I really don't see any issues. What you should do is write out all your monthly costs and figure out how much unallocated money you have, but I'd imagine you have enough money coming in to finance any reasonable new or used car. Keep in mind new will have much higher insurance and costs, but if you pick a good car your headaches besides that will be minimal.",
"title": ""
},
{
"docid": "c8fcd729c504730cd96afd2987df495a",
"text": "OK 40k vs 10k per year. That's 120k in loans difference. At 6% interest over 20 years that's roughly 200k (10k) a year to pay for school. Do you really think most people will get 10k a year extra because they when to Berkeley instead of Iowa state?",
"title": ""
},
{
"docid": "8c4d1c29aaa5949c44d7160199b21ac1",
"text": "\"First, excellent choice to say no to non-subsidized loans! But I'd say you are cutting things very close either way, and you need to face up to that now. $35/mo extra at the end of the month is \"\"within the noise\"\" of financial life, meaning you should think of it as essentially $0 each month or even negative money, since one vet bill/school books/unforeseen problem could remove it for the entire year, easily. You are leaving yourself no buffer. But by taking the loan, unless you are (as Joe said) socking away savings to pay for it upon graduation, you are guaranteeing you'll leave college with debt, which I think should be avoided if you can. Could you do a hybrid plan in which you worked hard to do the following?: If you do these things or something along these lines, the loan is probably OK; if not, I'd be concerned about taking it. [Probably unnecessary, but: Keep in mind that student loans are not excusable by bankruptcy, so one is on the hook for them no matter what]. Also consider whether you can take a semester off now and then to catch up financially. The key is to really stay far from the edge of any financial cliffs.\"",
"title": ""
},
{
"docid": "b52227a0cdb648ad6167508cec36e17d",
"text": "Basically do some math on the 2 schools. Let's say you know it will take 4 years if you go the cheaper route, at $8k/yr, plus the $300/month, total cost: $46,400. If you (for these purposes) do not have to pay back new loans until school is completed, (and depending on the rate of those loans), you would need approx $6k/yr in loans, plus the same costs ($300/month + $8k/yr to cover the other part of tuition). Let's say the expensive school takes 3 years to complete, which means you're out of pocket $34,800 and in debt an additional $18,000, totaling $52,800. This means that to make the 2nd school worth it (assuming your rates don't kill you, etc) you should have an increased earning potential of at least $6,400/yr after you get your degree. If you can finish in 2 years, your costs are: $23,200 + $12k, and you don't even have to change your earning potential to come out ahead. Other factors to consider are: If you aren't following any of the math, or want to post more information, just comment back to me, and I'll try to explain further. Best of luck!",
"title": ""
},
{
"docid": "13b73ae643a979d3c3ef1778ab3581b8",
"text": "\"Now asking if college is worth it? That's not the question that should be asked. Higher education and extended training are always a benefit at any point in life when it's of high quality. The question that should be asked is, \"\"why is the cost of college as high as it is?\"\" When I went to college to get my Bachelors, a semester at my state university cost $940 bucks US (this was in the early to mid 90s). Twenty years later, that same education cost $6,500 per semester. The main difference between these periods is that borrowing for school is now standard practice (much less so in the 90s). Any time you need to borrow to pay for something, you're going to overpay just because you have access to credit and can keep borrowing when someone hands you a bill. Today, kids borrow for college because they don't have much choice if their parents didn't save enough or stopped supporting them right out of high school. And if you have this level of debt right out of college, your hands will be tied for decades - it affects things like first home buying and disposable income spending. The only way to drive the cost of college down is to plan ahead and pay with cash - and to do that, you need to have enough luck to be born to parents who care enough to help with your future. If schools know you can't or won't borrow to pay for an education, they adjust.\"",
"title": ""
},
{
"docid": "39759f3a694b4c798f6717f6d8314396",
"text": "\"This is a tricky question, because the financial aid system can create odd incentives. Good schools tend to price themselves above and beyond any reasonable middle-class ability to save and then offer financial aid, much of it in the form of internal \"\"grants\"\" or \"\"loans\"\". If you think about it, the internal grant is more of a discount than a grant since no money need have ever existed to \"\"fund\"\" the grant. The actual price to the parents is based on financial aid paperwork and related rules, perhaps forming a college price-setting cartel. It is these rules that need to be considered when creating a savings plan. Suppose it is $50k/year to send your kids to the best school admitting them. Thats $200k for the 4 years. Suppose you had $50k now to save instead of $10K, and are wondering whether to put it in your son's college savings (whether or not you can do so in a tax advantaged way) or to pay down the mortgage. If you put it in your kids savings, and the $50k becomes $75k over time, that $75k will be used up in a year and a half as the financial aid system will suck it dry first before offering you much help. On the other hand, if you put the $50k on paying down the mortgage [provided the mortgage is \"\"healthy\"\" not upside down], your house payment will still be the same when your kids go to college. The financial aid calculations will consider that the kid has no savings, and allocate a \"\"grant\"\" and some loans the first year and a parental portion that you might be able to tap with a home equity loan or work overtime. Generally, you should also be encouraging your kids to excel and perhaps obtain academic scholarships or at least obtain some great opportunities. A large college savings fund might be as counterproductive as a zero fund. They shouldn't be expecting to breeze through some party school with a nice pad and car, homework assistance, and beer money. Unless they are good at a sport, like maybe football -- in which case you won't need to be the provider. It is not obvious how much the optimal ESA amount is. It might not be $0. Saving like crazy in there probably isn't the best thing to do, either.\"",
"title": ""
},
{
"docid": "d5eb3828d5cad0bb6084f28b4bec7086",
"text": "I agree that college doesn't or shouldn't have to be all about job prep. However, the caveat I will add is that if you go into DEBT for your education, you should certainly be thinking about the economic value your education can provide you. The last point about subsidized college being cheaper than the current system.. I don't know.. I'd have to see these reports you speak of, and who made them, and for what incentive. At the end of the day though, these findings are all moot unless we can have a conversation about the hyperinflation in college costs directly related to 'free' aka subsidized education.",
"title": ""
},
{
"docid": "a32a6677638574ad2bfc7dea4305e4d9",
"text": "Or, are there specific types of investments we can make that won't count against college financial aid? Yes - Start saving for college. You seem to be very willing to save for your own retirement and other investments but are willing to let your kids suffer through college loans and subsidies for college. Invest in your children's education.",
"title": ""
},
{
"docid": "cc6cabbe1f7fa651b281fe4f2d4c80f5",
"text": "FYI: David Knopf is a graduate of Princeton with a BA in Econ. His parents are rich. Like totally fucking rich. You might do better. If your parents make less than $140k, tuition at Princeton is zero. Of course your chance of getting into Princeton, unless you are a legacy admission, or ace the SAT, is about zero. Better bone up on Algebra if you want to ace the SAT. And yes, you ARE a math person. Everyone is. It's just that nobody ever taught you right. Forget about the CCNA or CCNP, that stuff will be obsolete before you would finish learning it. And even if you did, some H-1 visa immigrant will do the job for a quarter of what it would cost you to make a living. I completely sympathize with your situation. I'm not going to pour out my life story, but I always thought I'd be a multimillionaire by the time I was 30. Instead, I have made choices that took a troublesome path, including depression and poverty. Even today I am suffering from choices I made (or avoided making) decades ago. BUT I am suffering only by OTHER people's standards. I don't regret the choices I made. I turned down fast money I could have made by exploiting people, it would have only cost me my soul. I have been exploited by other people, and it taught me the value of dealing with people who have ethics like my own. So ultimately, you have to admit to yourself, you are exactly where you need to be. You are struggling because what you want to do is hard. I am an artist too, and that is just about the hardest thing to do on this earth. If it was easy, anyone could do it. So don't despair, get busy. I remember when I lived in a slum, barely subsisting, but I had a sunny window and a table, I spent $2 on a cheap brush and a tube of black watercolor, and a $2 tablet of cheap watercolor paper. And I sat at that sunny table and made art that made me happy. Nobody but me has ever seen it. And for all the changes I have gone through in decades since, I would give almost anything to be living in abject poverty, sitting at that sunny window with that cheap paintbrush in hand again. [So I'll just leave you with this odd comic by Carol Lay, it's one of my all time favorites.](http://i.imgur.com/4XsDbnE.gif)",
"title": ""
},
{
"docid": "0b418207b6cf9316c2b7b5d6ebf0b31c",
"text": "\"There is no simple answer to your question. It depends on many things, perhaps most notably what college your daughter ends up going to and what kind of aid you hope to receive. Your daughter will probably fill out the FAFSA as part of her financial aid application. Here is one discussion of what parental assets \"\"count\"\" towards the Expected Family Contribution on the FAFSA. You can find many similar pages by googling. Retirement accounts and primary residence are notable categories that do not count. So, if you were looking to reduce your \"\"apparent\"\" assets for aid purposes, dumping money into your mortgage or retirement account is a possibility. However, you should be cautious when doing this type of gaming, because it's not always clear exactly how it will affect financial aid. For one thing, \"\"financial aid\"\" includes both grants and loans. Everyone wants grants, but sometimes increasing your \"\"eligibility\"\" may just make you (or your daughter) eligible for larger loans, which may not be so great. Also, each college has its own system for allocating financial aid. Individual schools may ask for more detailed information (such as the CSS Profile). So strategies for minimizing your apparent assets that work for one school may not work for others. Some elite schools with large endowments have generous aid policies that allow even families with sizable incomes to pay little or nothing (e.g., Stanford waives tuition for most families with incomes under $125,000). You should probably research the financial aid policies of schools your daughter is interested in. It can be helpful to talk to financial aid advisors at colleges, as well as high school counselors, not to mention general financial advisors if you really want to start getting technical about what assets to move around. Needless to say, it all begins with talking with your daughter about her thoughts on where to go.\"",
"title": ""
},
{
"docid": "b8f0d645ba2c6b1ef9a62e5b425032fa",
"text": "I know what you are talking about and this is what students at UC I know usually do in such cases: Talk with the cashier's/registar's office and see if you have been reported to collections. If you had plans to pay via financial aid, this can be a non-issue, but be sure. It's critical to remove your record from collections, if any. Take a loan and find out how the loan will be paid. Most lenders pay the school directly based on what the school bills for the quarter. If you signed up for X units in Fall '10 and plan to take Y units in Winter '12, add X+Y units in your list of courses. Those X units could be anything in your course catalog. Once the school sends out the bill and the lender pays it, drop the X units. This will give you a check and use that to pay out the outstanding amounts. Most schools will include all outstanding amounts in the bill for your current quarter, but I am not sure if your lenders has agreements otherwise. Also, some lenders have agreements in place to send refunds directly to them, but remember, the cashier is king and she can make refunds happen the way she likes, and she is likely to help a student unless you have a bad payment history (collections, bounced checks..)",
"title": ""
},
{
"docid": "9171ded8dbd337e2bc5882b928fee24e",
"text": "Get a job, get a car, get a better job, save more money, invest that money in a high yield savings account, keep adding to that account until you turn 18. Start buying in bulk from China and reselling on eBay or Amazon for a 200-500% mark up, put that money in savings, ????, Profit. You can easily make 7-10 grand a year while still going to school, just save it all. Don't spend a dime unless you absolutely have to.",
"title": ""
},
{
"docid": "b0bb7134b4976d519582afd0b2420571",
"text": "The context actually was higher education and student debt load (which extends to cost). You can try to broaden it but the title of the thread, the linked article, the comment I replied to and my comments all reference higher education and costs. Once again, your comment is correct in a broader context, just not in the one we were in, at least not to all readers clearly. You want to be right but what you need to accept is that you just flubbed your post (tbh I agree with you on most points here) and should likely add some more detail to your statements.",
"title": ""
},
{
"docid": "39e2e45e8bcc7adf720d1c39d4c7aa85",
"text": "\"Is a student loan a type of loan or just a generic name used to refer to a loan for someone who is going back to school? A student loan from the federal government is a specific type of loan used for education purposes (i.e. attending college). They have guidelines associated with them that are very flexible as compared to a student loan from a private bank. If a student loan is a different type of loan, does it only cover the costs of going to the school? Every student at a university has a \"\"budget\"\" or the \"\"cost of attendance\"\". That includes direct and indirect costs. Direct costs are ones billed directly to you (i.e. tuition, room and board - should you choose to live on campus, and associated fees). Indirect costs are such things like books, travel expenses (if you live out of state), and personal things. Direct costs are controlled by the school. Indirect costs are estimated. The school will usually conduct market research to determine the costs for indirect items. Some students go above that, and some go below. For example, transportation is an indirect cost. A school could set that at $500. There are students who will be above that, and some below that. If you choose not to live on campus, then rent and food will become an indirect cost. Student loans can cover up to 100% of your budget (direct and indirect added together). If your total budget is $60,000 (tuition, room and board, transportation, books, supplies, etc.) Then you are able to borrow up to that amount ($60,000). However, because your budget is both direct and indirect costs, you will only be billed for your direct costs (tuition, etc.). So if your direct costs equal $50,000 and your student loan was certified for $60,000, then you will get that $10,000 back in the form of a refund from the school. That does not mean you don't have to pay it back - you still do. But that money is meant for indirect costs (i.e. books, rent - if you're not staying on campus, etc.). If your school is on semesters vs quarters, then that amount is divided between the terms. Summer term is not factored in, that's another process. Also with student loans, there are origination costs - the money associated with processing a loan. A good rule of thumb is to never borrow more than you need. Source: I used to work in financial aid at my college.\"",
"title": ""
},
{
"docid": "4a8ff89be169d4386afa9703d41dbe4a",
"text": "You say: Every time it seems the share price dips. Does it? Have you collected the data? It may just be that you are remembering the events that seem most painful at the time. To move the market with your trade you need to be dealing in a large amount of shares. Unless the stock is illiquid (e.g most VCT in the UK), I don’t think you are dealing in that large a number; if you were then you would likely have access to a real time feed of the order book and could see what was going on.",
"title": ""
}
] |
fiqa
|
005b675aff46efe4caef364301baebfe
|
What are futures and how are they different from options?
|
[
{
"docid": "2021896ab5fde00bf401811c12b52f10",
"text": "Cart's answer is basically correct, but I'd like to elaborate: A futures contract obligates both the buyer of a contract and the seller of a contract to conduct the underlying transaction (settle) at the agreed-upon future date and price written into the contract. Aside from settlement, the only other way either party can get out of the transaction is to initiate a closing transaction, which means: The party that sold the contract buys back another similar contract to close his position. The party that bought the contract can sell the contract on to somebody else. Whereas, an option contract provides the buyer of the option with the choice of completing the transaction. Because it's a choice, the buyer can choose to walk away from the transaction if the option exercise price is not attractive relative to the underlying stock price at the date written into the contract. When an option buyer walks away, the option is said to have expired. However – and this is the part I think needs elaboration – the original seller (writer) of the option contract doesn't have a choice. If a buyer chooses to exercise the option contract the seller wrote, the seller is obligated to conduct the transaction. In such a case, the seller's option contract is said to have been assigned. Only if the buyer chooses not to exercise does the seller's obligation go away. Before the option expires, the option seller can close their position by initiating a closing transaction. But, the seller can't simply walk away like the option buyer can.",
"title": ""
},
{
"docid": "f828dd29f501be8e0e71d26d8579a317",
"text": "For futures, you are obligated to puchase the security at $x when the contract expires. For an option, you have the right or option to do so if it's favorable to you.",
"title": ""
}
] |
[
{
"docid": "bbefe50d05a17ab5e03bbdd33a74cb84",
"text": "\"**Modern portfolio theory** Modern portfolio theory (MPT), or mean-variance analysis, is a mathematical framework for assembling a portfolio of assets such that the expected return is maximized for a given level of risk, defined as variance. Its key insight is that an asset's risk and return should not be assessed by itself, but by how it contributes to a portfolio's overall risk and return. Economist Harry Markowitz introduced MPT in a 1952 essay, for which he was later awarded a Nobel Prize in economics. *** **Option (finance)** In finance, an option is a contract which gives the buyer (the owner or holder of the option) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specific strike price on a specified date, depending on the form of the option. The strike price may be set by reference to the spot price (market price) of the underlying security or commodity on the day an option is taken out, or it may be fixed at a discount in a premium. The seller has the corresponding obligation to fulfill the transaction—to sell or buy—if the buyer (owner) \"\"exercises\"\" the option. An option that conveys to the owner the right to buy at a specific price is referred to as a call; an option that conveys the right of the owner to sell at a specific price is referred to as a put. *** ^[ [^PM](https://www.reddit.com/message/compose?to=kittens_from_space) ^| [^Exclude ^me](https://reddit.com/message/compose?to=WikiTextBot&message=Excludeme&subject=Excludeme) ^| [^Exclude ^from ^subreddit](https://np.reddit.com/r/finance/about/banned) ^| [^FAQ ^/ ^Information](https://np.reddit.com/r/WikiTextBot/wiki/index) ^| [^Source](https://github.com/kittenswolf/WikiTextBot) ^] ^Downvote ^to ^remove ^| ^v0.27\"",
"title": ""
},
{
"docid": "d4dff35891ae13eeff3533f54e752a6d",
"text": "R/stockmarket is probably the best. When I have some free time I can test that strategy back as long as you would like in quantstrat, although the only problem with testing futures is joining the consolidated contracts, however I can test it with SPY as SPY returns and ES_F track very closely.",
"title": ""
},
{
"docid": "2b5eaed08c1cfa0ee6679393252ffd58",
"text": "Both of these are futures contracts on the Ibovespa Brasil Sao Paulo Stock Exchange Index; the mini being exactly that, a mini version (or portion) of the regular futures contract. The mini counterpart makes trading the index more affordable to individual investors and hence increase liquidity.",
"title": ""
},
{
"docid": "4258443886a300618076589ed87e0270",
"text": "If you know what you are doing, bear markets offer fantastic trading opportunities. I'm a futures and futures options trader, and am equally comfortable trading long or short, although I have a slight preference for the short side, in that moves are typically much quicker to the down side.",
"title": ""
},
{
"docid": "eb54ab11238ad586241ec0fa1c95968d",
"text": "The futures market trades 24 hours a day, 5.5 days a week. S&P 500 futures market continues trading, and this gives pricing exposure and influences the individual stocks when they resume trading in US session.",
"title": ""
},
{
"docid": "bca014b926dcdb6cd2bdd8d72311a85d",
"text": "There are two basic kinds of derivatives - forward contracts and options. A forward is an agreement between two parties for one party to buy/sell some asset to the other at a price that they agree upon today at some date in the future. An option is an agreement that gives one party the right, but not the obligation, to buy/sell the asset at some date in the future. Most derivatives that exist are a combination of these two things. For instance, a futures contract is a standardized forward contract that is traded on an exchange, and a swap is a portfolio (or chain) of forward contracts linked together. American/Bermudan options are just options that allow you to exercise on more than one day.",
"title": ""
},
{
"docid": "16e7501c9ae0531f21f66a8cb46cfa3e",
"text": "\"In general economic theory, there are always two markets created based on a need for a good; a spot market (where people who need something now can go outbid other people who need the same thing), and a futures market (where people who know they will need something later can agree to buy it for a pre-approved price, even if the good in question doesn't exist yet, like a grain crop). Options exist as a natural extension of the futures market. In a traditional future, you're obligated, by buying the contract, to execute it, for good or ill. If it turns out that you could have gotten a lower price when buying, or a higher price when selling, that's tough; you gave up the ability to say no in return for knowing, a month or three months or even a year in advance, the price you'll get to buy or sell this good that you know you need. Futures thus give both sides the ability to plan based on a known price, but that's their only risk-reduction mechanism. Enter the option. You're the Coors Brewing Company, and you want to buy 50 tons of barley grain for delivery in December in order to brew up for the Super Bowl and other assorted sports parties. A co-op bellies up to close the deal. But, since you're Coors, you compete on price with Budweiser and Miller, and if you end up paying more than the grain's really worth, perhaps because of a mild wet fall and a bumper crop that the almanac predicts, then you're going to have a real bad time of it in January. You ask for the right to say \"\"no\"\" when the contract falls due, if the price you negotiate now is too high based on the spot price. The co-op now has a choice; for such a large shipment, if Coors decided to leave them holding the bag on the contract and instead bought it from them anyway on a depressed spot market, they could lose big if they were counting on getting the contract price and bought equipment or facilities on credit against it. To mitigate those losses, the co-op asks for an option price; basically, this is \"\"insurance\"\" on the contract, and the co-op will, in return for this fee (exactly how and when it's paid is also negotiable), agree to eat any future realized losses if Coors were to back out of the contract. Like any insurance premium, the option price is nominally based on an outwardly simple formula: the probability of Coors \"\"exercising\"\" their option, times the losses the co-op would incur if that happened. Long-term, if these two figures are accurate, the co-op will break even by offering this price and Coors either taking the contract or exercising the option. However, coming up with accurate predictions of these two figures, such that the co-op (or anyone offering such a position) would indeed break even at least, is the stuff that keeps actuaries in business (and awake at night).\"",
"title": ""
},
{
"docid": "27e17fd6b2b1f4c97eedce55bf9f4842",
"text": "Futures exchanges are essentially auction houses facilitating a two-way auction. While they provide a venue for buyers and sellers to come together and transact (be that a physical venue such as a pit at the CME or an electronic network such as Globex), they don't actively seek out or find buyers and sellers to pair them together. The exchanges enable this process through an order book. As a futures trader you may submit one of two types of order to an exchange: Market Order - this is sent to the exchange and is filled immediately by being paired with a limit order. Limit Order - this is placed on the books of the exchange at the price you specify. If other participants enter opposing market orders at this price, then their market order will be paired with your limit order. In your example, trader B wishes to close his long position. To do this he may enter a market sell order, which will immediately close his position at the lowest possible buy limit price, or he may enter a limit sell order, specifying the price at or above which he is willing to sell. In the case of the limit order, he will only sell and successfully close his position if his order becomes the lowest sell order on the book. All this may be a lot easier to understand by looking at a visual image of an order book such as the one given in the explanation that I have published here: Stop Orders for Futures Finally, not that as far as the exchange is concerned, there is no difference between an order to open and an order to close a position. They're all just 'buy' or 'sell' orders. Whether they cause you to reduce/exit a position or increase/establish a position is relative to the position you currently hold; if you're flat a buy order establishes a new position, if you're short it closes your position and leaves you flat.",
"title": ""
},
{
"docid": "617a7517cb417ed7ce90bb074959be08",
"text": "On the US markets, most index options are European style. Most stock and ETF options are, as you noted, American style.",
"title": ""
},
{
"docid": "06c3aa66d042265db3e1ee1097acdadf",
"text": "\"Futures are an agreement to buy or sell something in the future. The futures \"\"price\"\" is the price at which you agree to make the trade. This price does not indicate what will happen in the future so much as it indicates the cost of buying the item today and holding it until the future date. Hence, for very liquid products such as stock index futures, the futures price is a very simple function of today's stock index value and current short-term interest rates. If the stock exchange is closed but the futures exchange is open, then using the futures price and interest rates one can back out an implied \"\"fair value\"\" for the index, which is in essence the market's estimate of what the stock index value would be right now if the stock market were open. Of course, as soon as the stock exchange opens, the futures price trades to within a narrow band of the actual index value, where the size of the band depends on transaction costs (bid-ask spread, commissions, etc.).\"",
"title": ""
},
{
"docid": "31b3c1f70fe06fe230cde5a7ce490664",
"text": "I know I can not trade futures realistically (I never claimed I could). All I wanted was some exposure to commodities. If I could just trade many of these things in an ETF like GLD or XLV, I would have done that. On the topic of margin, I appreciate your explaining that to me. I admit readily that I could never invest in futures straight, but I would like to get into commodities and other types of investments. I have tried to look for value in the market, but I have not found many things I would put my money in. I have gone as far as to look through OTC ADRs to find some foreign value, and I found nothing. I just want to be able to trade in any market, and I would consider shorting, but I don't like to be too risky. I want to go long on positions, and it seemed like commodities may be a good speculation to LOOK INTO. Taking rough rice as an example, there are millions (if not billions) of people who eat rice to survive. People will always need oil to fuel their cars. People will always need electricity. So I guess what I am trying to do is look into things that allow me to profit, regardless of where equities are going. The only thing I want to do is trade the options of the futures, not the actual futures themselves. I hope I did not confuse you. If I can earn even $20 from buying an option at a lower price and selling higher, it would allow me to have a greater breadth of tools to use when the market may be overvalued.",
"title": ""
},
{
"docid": "9e23f734f751b12c8348d91beaac1cbf",
"text": "\"The third Friday of each month is an expiration for the monthly options on each stock. Stock with standardized options are in one of three \"\"cycles\"\" and have four open months at any give time. See http://www.investopedia.com/terms/o/optioncycle.asp In addition some stocks have weekly options now. Those generally have less interest because they are necessarily short-term. Anything expiring on April 8 and 22 (Fridays this year but not third Fridays of the month) are weeklies. The monthly options are open for longer periods of time so they attract more interest over the time that they are open. They also potentially attract a different type of investor due to their length of term, although, as it gets close to their expiration date they may start to behave more like weeklies.\"",
"title": ""
},
{
"docid": "316e57e2c474493f63b6f03c78c7bfcf",
"text": "What you should compare is SPX, SPY NAV, and ES fair value. Like others have said is SPX is the index that others attempt to track. SPY tracks it, but it can get a tiny bit out of line as explained here by @Brick . That's why they publish NAV or net asset value. It's what the price should be. For SPY this will be very close because of all the participants. The MER is a factor, but more important is something called tracking error, which takes into account MER plus things like trading expenses plus revenue from securities lending. SPY (the few times I've checked) has a smaller tracking error than the MER. It's not much of a factor in pricing differences. ES is the price you'll pay today to get SPX delivered in the future (but settled in cash). You have to take into account dividends and interest, this is called fair value. You can find this usually every morning so you can compare what the futures are saying about the underlying index. http://www.cnbc.com/pre-markets/ The most likely difference is you're looking at different times of the day or different open/close calculations.",
"title": ""
},
{
"docid": "042f2ff7f584f4b17f0df4146c750c9e",
"text": "Futures contracts are a member of a larger class of financial assets called derivatives. Derivatives are called such because their payoffs depend on the price of other assets (financial or real). Other kinds of derivatives are call options, put options. Fixed income assets that mimic the behavior of derivatives are callable bonds, puttable bonds etc. A futures contract is a contract that specifies the following: Just like with any other contract, there are two parties involved. One party commits to delivering the underlying asset to the other party on expiration date in exchange for the futures price. The other party commits to paying the futures price in exchange for the asset. There is no price that any of the two parties pay upfront to engage in the contract. The language used is so that the agent committing to receiving the delivery of the underlying asset is said to have bought the contract. The agent that commits to make the delivery is said to have sold the contract. So answer your question, buying on June 1 a futures contract at the futures price of $100, with a maturity date on August 1 means you commit to paying $100 for the underlying asset on August 1. You don't have to pay anything upfront. Futures price is simply what the contract prescribes the underlying asset will exchange hands for.",
"title": ""
},
{
"docid": "52b9f5ee1b90297437cee372ff29cca8",
"text": "\"If there's one thing the futures markets don't lack, it's leverage. It's more than even most of the most aggressive investors use. Trading options might make more sense for some investors, but I can't think of how this would be \"\"a safer way\"\" compared to owning actual futures contracts, even at relatively high leverage.\"",
"title": ""
}
] |
fiqa
|
c0d8759a227ab9132a710e0346e87f0f
|
Should I move my money market funds into bonds?
|
[
{
"docid": "47d5ccdb39f1ba3248876645856fccec",
"text": "It depends how much risk you're prepared to accept. The short-term risk-free rate of return at present is something in the vicinity of 0.1% (three month US treasuries are currently yielding 0.08%), so anything paying a higher rate on money that's accessible quickly will involve some degree of risk -- the higher the rate then the higher the risk.",
"title": ""
},
{
"docid": "b01d95f8b94c0c2cbca6f0916c0342b8",
"text": "One thing to note before buying bond funds. The value of bonds you hold will drop when interest rates go up. Interest rates are at historical lows and pretty much have nowhere to go but up. If you are buying bonds to hold to maturity this is probably not a major concern, but for a bond fund it might impair performance if things suddenly shift in the interest rate market.",
"title": ""
},
{
"docid": "bbe5397d9417e54c85543cd31c858101",
"text": "If your money market funds are short-term savings or an emergency fund, you might consider moving them into an online saving account. You can get interest rates close to 1% (often above 1% in higher-rate climates) and your savings are completely safe and easily accessible. Online banks also frequently offer perks such as direct deposit, linking with your checking account, and discounts on other services you might need occasionally (i.e. money orders or certified checks). If your money market funds are the lowest-risk part of your diversified long-term portfolio, you should consider how low-risk it needs to be. Money market accounts are now typically FDIC insured (they didn't used to be), but you can get the same security at a higher interest rate with laddered CD's or U.S. savings bonds (if your horizon is compatible). If you want liquidity, or greater return than a CD will give you, then a bond fund or ETF may be the right choice, and it will tend to move counter to your stock investments, balancing your portfolio. It's true that interest rates will likely rise in the future, which will tend to decrease the value of bond investments. If you buy and hold a single U.S. savings bond, its interest payments and final payoff are set at purchase, so you won't actually lose money, but you might make less than you would if you invested in a higher-rate climate. Another way to deal with this, if you want to add a bond fund to your long-term investment portfolio, is to invest your money slowly over time (dollar-cost averaging) so that you don't pay a high price for a large number of shares that immediately drop in value.",
"title": ""
},
{
"docid": "ccdfb95bba9a39dd154f1bfddbefe85b",
"text": "How much money do you have in your money market fund and what in your mind is the purpose of this money? If it is your six-months-of-living-expenses emergency fund, then you might want to consider bank CDs in addition to bond funds as an alternative to your money-market fund investment. Most (though not necessarily all, so be sure to check) bank CDs can be cashed in at any time with a penalty of three months of interest, and so unless you anticipate being laid off very soon, you might get a slightly better rate of interest, FDIC insurance (which mutual funds do not have), and with any luck you may never have to break a CD and lose the interest. Building a ladder of CDs with one maturing each month might be another way to reduce the risk of loss. On the other hand, bond mutual funds are a risky bet now because your investment will lose value if interest rate go up, and as JohnFx points out, interest rates have nowhere to go but up. Finally, the amount of the investment is something that you might want to consider before making changes. If you have $50K put away as your six-month fund, you are talking of $500 versus $350 per annum in changing to a riskier investment with a 1% yield from a safer investment with a 0.7% yield. Whether bragging rights at neighborhood parties are worth the trouble is something for you to decide.",
"title": ""
},
{
"docid": "562199728b298b68e02ab2224814095c",
"text": "\"Your only real alternative is something like T-Bills via your broker or TreasuryDirect or short-term bond funds like the Vanguard Short-Term Investment-Grade Fund. The problem with this strategy is that these options are different animals than a money market. You're either going to subject yourself to principal risk or lose the flexibility of withdrawing the money. A better strategy IMO is to look at your overall portfolio and what you actually want. If you have $100k in a money market, and you are not going to need $100k in cash for the forseeable future -- you are \"\"paying\"\" (via the low yield) for flexibility that you don't need. If get your money into an appropriately diversified portfolio, you'll end up with a more optimal return. If the money involved is relatively small, doing nothing is a real option as well. $5,000 at 0.5% yields $25, and a 5% return yields only $250. If you need that money soon to pay tuition, use for living expenses, etc, it's not worth the trouble.\"",
"title": ""
},
{
"docid": "41cd2b8425e2101f7d1b7b665b5ad625",
"text": "There is a thing called the Sharpe Ratio. This Ratio takes return/risk with risk being defined as the standard deviation of prices over time. According to Financial theory the investment with the highest (best) Sharpe Ratio is a market portfolio. Technically accepting the lower risk of a treasury is accepting an amplified lower return(market sharpe would be 1 than tbill sharpe would be at most .9999999999999). Because of this, unless there are liquidity restraints (don't buy ETFs with your payroll money DUH) you should ALWAYS be in market funds, otherwise you are leaving money on the table. Everything else is just speculation. Now the real question is value or growth.......",
"title": ""
}
] |
[
{
"docid": "07f7202017432ca3558e5ec9494595bc",
"text": "Current evidence is that, after you subtract their commission and the additional trading costs, actively managed funds average no better than index funds, maybe not as well. You can afford to take more risks at your age, assuming that it will be a long time before you need these funds -- but I would suggest that means putting a high percentage of your investments in small-cap and large-cap stock indexes. I'd suggest 10% in bonds, maybe more, just because maintaining that balance automatically encourages buy-low-sell-high as the market cycles. As you get older and closer to needing a large chunk of the money (for a house, or after retirement), you would move progressively more of that to other categories such as bonds to help safeguard your earnings. Some folks will say this an overly conservative approach. On the other hand, it requires almost zero effort and has netted me an average 10% return (or so claims Quicken) over the past two decades, and that average includes the dot-bomb and the great recession. Past results are not a guarantee of future performance, of course, but the point is that it can work quite well enough.",
"title": ""
},
{
"docid": "ad3f4ad517e76e988202279128dd35d6",
"text": "In your case, you could very well leave it in something like FFFFX, which for readers is a self balancing fund with a target retirement date of 2040. These funds are a conglomeration of other funds that tend to move more conservatively as time passes. However, I like to put no more than 10% of my portfolio in one fund with exceptions made for balances less than 20K. So If I had 18K it really wouldn't matter if it was in FUSEX a S&P 500 index fund. However by investing in FFFFX you pretty much meet that requirement. So you are golden if that fund meets your goals. For me, I kind of hate bonds and despite being of similar age, I have almost no money invested in bonds.",
"title": ""
},
{
"docid": "d4bd9d7b067b67dad5472849802226cc",
"text": "\"If by \"\"putting money in the bank\"\" you mean regular savings or checking, then the bond locks a rate for a period of time, whereas your savings/checking rate can vary over that period. That variation might go for you or against you. Depending on your situation, you might prefer to take a determined rate to the variations. In addition, some bond types provide tax benefits (e.g. treasuries and municipal bonds) that change the effective return - You cannot just compare the interest rates. Finally, the bonds have \"\"resale\"\" value on the secondary market like stock - Depending on your outlook and strategy, you might by the bond for its value as a security rather than for the interest specifically just like you'd could buy a dividend-paying stock for its value as a security rather than for the dividend. In other words, you might think that bond values are going up, so you buy bonds with the intent of making a capital gain rather than counting on the interest returned. (The bond market does depend on the interest rate, so these are not independent factors.) I see the other answer that mentions the potential for your bank busting and you losing money beyond the FDIC insurance limit. The question doesn't specify U.S. Government bonds though, so I don't think that answer is generally good. It would be good in the case that you had a lot of money (especially an institution or foreign government) and you were specifically interested in U.S. Treasury bonds. Not so much if you invest in corporate bonds where you have no government insurance / assurance of any sort. Municipal bounds are also not backed by the U.S. (federal) government, but they may have some backing at the state level, depending on the state.\"",
"title": ""
},
{
"docid": "463fdf12613144bedc0bfe74333f35f4",
"text": "\"How should I allocate short-term assets in a rising-interest rate environment? Assuming that the last part is correct, there could be bear bond funds that short bonds that could work well as a way to invest. However, bear in that the the \"\"rising-interest rate environment\"\" is part of the basis that may or may not be true in the end as I'm not sure I've seen anything to tell me why rates couldn't stay where they are for another couple of years or more. Long-Term Capital Management would be a cautionary tale before about bonds that had assumptions that backfired when something that wasn't supposed to happen, happened. Thus, while you can say there is \"\"rising-interest rate environment\"\" what else are you prepared to assume and how certain are you of that happening? An alternate theory here would be that \"\"junk bonds\"\" may do well because the economy has to be heating up for rates to rise and thus the bonds that are priced down so much because of default risk may turn out to not go bust and thus could do well. Course this would carry the \"\"Your mileage may vary\"\" and without a working time machine I couldn't say which funds will be good and which would suck. As for what I would do if I was dealing with my own money: Money market funds and CDs would likely be my suggestion for the short-term where I want to prevent principal risk. This is likely what I would do if I believed the rising rate environment is here.\"",
"title": ""
},
{
"docid": "15983d0615c613868763cc51ea2610bd",
"text": "It looks like an improvement to me, if for no other reason than lowering the expenses. But if you are around 35 years away from retirement you could consider eliminating all bond funds for now. They will pay better in a few years. And the stock market(s) will definitely go up more than bonds over the next 35 years.",
"title": ""
},
{
"docid": "f3532117ebd729f5fb0d5b00f4a6a637",
"text": "\"Possible but very unlikely. Money market funds invest in high grade liquid assets and the primary goal is not to lose money. I have not been able to find an example of a Vanguard money market fund ever \"\"breaking the buck\"\" and having the value of a share go below a dollar. It is possible that this could happen in the event of a large scale financial collapse, but even then I would call it possible rather than likely.\"",
"title": ""
},
{
"docid": "36e643c89da53b0e2d4622950dd89045",
"text": "I would disagree with your analysis. To me there are two purposes for a money market (MM): Your emergency fund should be from 3 to 6 months of expenses. Think of it of an insurance policy against Murphy. You may want to have some money designated for big expenses, or even sinking funds. For example, I keep some money in a MM for a car as both the wife, daughter, and I driver older vehicles. I may need to replace them. If you were planning on making a larger purchase car, house, boat, engagement ring I would put the money in a MM fund so you are not subject to the whims of the market. After that you are free to invest all your money. Its likely that you should have some money outside of tax advantaged funds so if you want to start a business you will not have to do high cost withdrawals.",
"title": ""
},
{
"docid": "5cff844c4aa3d9514ed094edddef9515",
"text": "Yes, you're absolutely right. For such small amounts and such large fees, almost any investment choice is pointless. Some brokers allow for commission free ETF trading. Seek them out. As you've noticed, bond interest rates are almost 0%. This is a far cry from the days of Benjamin Graham, where the USD acted more like gold, with much more frequent booms and busts. During Graham's heyday, one could sell one's bonds at super low interest rates and buy them back again when high. In his day, interest rates would be very high one year like in 2008 and next to nothing the next like in 2009, cycling back and forth, until the 1960s hit, and he didn't know what to do. Graham preferred to wait for the reversion to the mean, and act only when far from it. Those opportunities are few and far between now since fiat currencies are far better managed than they were then, the Fed-caused 2009 total destruction as an outlier to recent times. In your case, it's best to leave the bonds to the insurance companies and buy equities. If you want less volatility, buy a buy-write ETF. Bonds will surely disappoint unless one is lucky enough to hold bonds while interest rates fall from ~6% to ~3%, an eventuality that shouldn't be expected to occur again, as Bill Gross is painfully discovering.",
"title": ""
},
{
"docid": "5d4190e4e9d5d39e206d1e79faa6f863",
"text": "The expense ratio is 0.17% so doesnt that mean that for every 10K I keep in the money market fund I lose $17/year? Not really. The expense ratio is taken before distributions are paid which applies to all mutual funds. Should I care about this? In this case not really. If it was a taxable account, then other options may be more tax-efficient that is worth noting. The key with money market funds is that the expense ratio often represents how much money the administrators will take before paying out the rest. So, if your money market fund bought investments that paid .25% then you'd likely see .08% as that is what is left over after the .17% is taken in the dividends. If at the start of the year, the funds NAV is $1, and at the end of the year, the funds NAV is still $1, I havent lost anything right? Right. Wikipedia has a good article on money market funds. Keep in mind that most money market funds are run as one of a number of funds from a fund family that may have to take a little less profit on the money market funds when rates are low.",
"title": ""
},
{
"docid": "fc784201d1147155f79cd4e356cbe61a",
"text": "edit: nevermind. i glanced and thought you meant total market mutual funds. For fixed income - if you want to get a good analysis of the bond market/interest rates, i would suggest you read some of bill gross' letters off the pimco site - a lot of discussion about our current zero bound interest rates. For equities - I have the view that if the economy is doing well, people are less inclined to focus on dividend yield...thereby lowering the relative multiples on dividend/fcf yielding stocks. So total return fund may be trading slightly cheaper.",
"title": ""
},
{
"docid": "e5721cba909291bba46948d3e9801e4e",
"text": "As others have pointed out your bond funds should have short durations, preferably not more than about 2 years. If you are in a bond fund for the long haul meaning you do not have to draw on your bond fund a short time after interest rates have gone up, it is not a big issue. The fund's holdings will eventually turn over into higher interest bearing paper. If bonds do go down, you might want to add more to the fund(s) (see my comment on age-specific asset allocation below). Keep in mind that some stocks are interest sensitive, for example utility stocks which are used as an income source and their dividends compete with rates on CDs which are much safer. Right now CD rates are very low. This could change. It's possible that we may be in an unusually sensitive interest rate period that might have large effects on the stock market, yet to be determined. The reason is that rates have been so low for such a long time that folks that normally would have obtained income streams from bonds have turned to dividend bearing stocks. Some believe that recent market rises are due to such people seeking dividends to enhance cash inflows. If, and emphasis on if, this is true, we could see a sharp drop in the market as sell offs occur as those who want cash streams move from stocks to ultra safe, government insured CDs. Only time will tell if this is going to play out. If retirement for you is 15+ years in the future and the market goes down (bonds or equities), good stuff - it's a buying opportunity in whatever category has dropped. Most important is to keep an eye on your asset allocation and make sure it is appropriate to your age. You did not state the percentages in each category, so further discussion is impossible on that topic. With more than 15 years to go, I personally would be heavily weighted on the equity side, mostly mid-cap and some small equity funds or ETFs in both domestic and international markets. As you age, shuffle some equities into fixed income (bonds, CDs and the like). Work up an asset allocation plan - start thinking about it now. Don't wait.",
"title": ""
},
{
"docid": "d260390122c29d523b7a720197f3b5a8",
"text": "I am voting you up because this is a legitimate question with a correct possible answer. Yes, you shouldn't buy penny stocks, yes you shouldn't speculate, yes people will be jealous that you have money to burn. Your question: how to maximize expected return. There are several definitions of return and the correct one will determine the correct answer. For your situation, $1,000 sounds like disposable income and that you have the human capital to make more income in the future with your productive years. So we will not assume you want to take this money and reinvest the remains until you are dead. This rules out #2. It sounds like you are the sole beneficiary of this fund and that your value proposition is regardless of asset class and competition to other investment opportunities. In other words, you are committed to blowing this $1,000 and would not consider instead putting the money towards paying down credit card debt or other valuable uses. This rules out #3. You are left with #1, expected value. Now there is already evidence that penny stocks are a losing proposition. In fact, some people have been successful in setting up honeypot email accounts and waiting for penny stock spam... then shorting those stocks. So to maximize expected return, invest 0% of your bankroll. But that's boring, let's ignore it. As you have correctly identified, the transaction costs are significant, $14 in tolls on crossing the bridge both ways on a $1,000 investment already exceeds the 5-year US bond rate. Diversification will affect the correlation and overall risk (Kelly Criterion) of your portfolio -- but it has no effect on your expected return. In summary, diversification has zero effect on your expected return and is not justified by the cost.",
"title": ""
},
{
"docid": "f1929e88f0214dc218452d12e55a4339",
"text": "\"1. Interest rates What you should know is that the longer the \"\"term\"\" of a bond fund, the more it will be affected by interest rates. So a short-term bond fund will not be subject to large gains or losses due to rate changes, an intermediate-term bond fund will be subject to moderate gains or losses, and a long-term bond fund will be subject to the largest gains or losses. When a book or financial planner says to buy \"\"bonds\"\" with no other qualification, they almost always mean investment-grade intermediate-term bond funds (or for individual bonds, the equivalent would be a bond ladder averaging an intermediate term). If you want technical details, look at the \"\"average duration\"\" or \"\"average maturity\"\" of the bond fund; as a rough guide, if the duration is 10, then a 1% change in interest rates would be a 10% gain or loss on the fund. Another thing you can do is look at long-term (10 years or ideally longer) performance history on some short, intermediate, and long term bond index funds, and you can see how the long term funds bounced around more. Non-investment-grade bonds (aka junk bonds or high yield bonds) are more affected by factors other than interest rates, including some of the same factors (economic booms or recessions) that affect stocks. As a result, they aren't as good for diversifying a portfolio that otherwise consists of stocks. (Having stocks, investment grade bonds, and also a little bit in high-yield bonds can add diversification, though. Just don't replace your bond allocation with high-yield bonds.) A variety of \"\"complicated\"\" bonds exist (convertible bonds are an example) and these are tough to analyze. There are also \"\"floating rate\"\" bonds (bank loan funds), these have minimal interest rate sensitivity because the rate goes up to offset rate rises. These funds still have credit risks, in the credit crisis some of them lost a lot of money. 2. Diversification The purpose of diversification is risk control. Your non-bond funds will outperform in many years, but in other years (say the -37% S&P 500 drop in 2008) they may not. You will not know in advance which year you'll get. You get risk control in at least a few ways. There's also an academic Modern Portfolio Theory explanation for why you should diversify among risky assets (aka stocks), something like: for a given desired risk/return ratio, it's better to leverage up a diverse portfolio than to use a non-diverse portfolio, because risk that can be eliminated through diversification is not compensated by increased returns. The theory also goes that you should choose your diversification between risk assets and the risk-free asset according to your risk tolerance (i.e. select the highest return with tolerable risk). See http://en.wikipedia.org/wiki/Modern_portfolio_theory for excruciating detail. The translation of the MPT stuff to practical steps is typically, put as much in stock index funds as you can tolerate over your time horizon, and put the rest in (intermediate-term investment-grade) bond index funds. That's probably what your planner is asking you to do. My personal view, which is not the standard view, is that you should take as much risk as you need to take, not as much as you think you can tolerate: http://blog.ometer.com/2010/11/10/take-risks-in-life-for-savings-choose-a-balanced-fund/ But almost everyone else will say to do the 80/20 if you have decades to retirement and feel you can tolerate the risk, so my view that 60/40 is the max desirable allocation to stocks is not mainstream. Your planner's 80/20 advice is the standard advice. Before doing 100% stocks I'd give you at least a couple cautions: See also:\"",
"title": ""
},
{
"docid": "c976a1f9cf1a5014ba73a9b00bd8da2b",
"text": "A mutual fund that purchases bonds is a bond fund. Bond funds are considered to be less risk than a traditional stock mutual fund. The cost of this less risk is that they have earned (on average) less than mutual funds investing in stocks. Sometimes, bonds have different tax consequences than stocks.",
"title": ""
},
{
"docid": "412af011c70132f78f47a1037f0fc2cd",
"text": "Nominal. What you say is true, but I'm guessing it would be too complicated to modelate. Plus, a shareholder of a very large company would not necessarily experience said loss if he/she sells the stock in small chunks at a time.",
"title": ""
}
] |
fiqa
|
9bdcb7791fecbeed1fcc4283cf9efc34
|
How are startup shares worth more than the total investment funding?
|
[
{
"docid": "ee8a6f97c97ef7941969a41f0081da28",
"text": "\"What littleadv said is correct. His worth is based on the presumed worth of the total company value (which is much greater than all investment dollars combined because of valuation growth)*. In other words, his \"\"worth\"\" is based on the potential return for his share of ownership at a rate based on the latest valuation of the company. He is worth $17.5 billion today, but the total funding for Facebook is only $2.4 billion? I don't understand this. In private companies, valuations typically come from either speculation/analysts or from investments. Investment valuations are the better gauge, because actual money traded hands for a percentage ownership. However, just as with public companies on the stock market, there are (at least) two caveats. Just because someone else sold their shares at a given rate, doesn't mean that rate... In both cases, it's possible the value may be much lower or much higher. Some high-value purchases surprise for how high they are, such as Microsoft's acquisition of Skype for $8.5 billion. The formula for one owner's \"\"worth\"\" based on a given acquisition is: Valuation = Acquisition amount / Acquisition percent Worth = Owner's percent × Valuation According to Wikipedia Zuckerberg owns 24%. In January, Goldman Sach's invested $500 million at a $50 billion valuation. That is the latest investment and puts Zuckerberg's worth at $12 billion. However, some speculation places a Facebook IPO at a much higher valuation, such as as $100 billion. I don't know what your reference is for $17 billion, but it puts their valuation at $70.8 billion, between the January Goldman valuation and current IPO speculation. * For instance, Eduardo Saverin originally invested $10,000, which, at his estimated 5% ownership, would now be worth $3-5 billion.\"",
"title": ""
},
{
"docid": "91c1f60c9ac92a5e9629c21ba800d911",
"text": "The net worth is based on an estimate of how much he would get if he relinquished his stake. The total funding is based on how much he has relinquished thus far. Suppose I have a candy jar with 100 candies. I'm not sure how much these candies are worth, so I start off by selling 10% of the jar for $10. Now I have 90 candies and $10, a total value of $100. Then someone comes along offering $100 for another 10% (of the original jar, or 10 candies), which I accept. Now I have 80 candies and $110. Since I value each candy at $10 now, I calculate my worth as $910. Then I do another deal selling 10% for $1000. Now I have $1110 in cash and 70 candies valued at $100 each. My total worth is now $8110 (cash + remaining candies), while the candy jar has only received $1110 in funding. Replace candies with equity in The Facebook, Inc. and you get the idea.",
"title": ""
},
{
"docid": "b9bde54954b659f05d07dfa2c0a7ec94",
"text": "He is worth $17.5 billion today Note that he is worth that dollar figure, but he doesn't have that many dollars. That's the worth of his stake in the company (number of shares he owns times the assumed value per share), i.e. assuming its total value being several hundreds of billions, as pundits assume. However, it is not a publicly traded company, so we don't really know much about its financials.",
"title": ""
}
] |
[
{
"docid": "922ae0ac97a125d6aea9d7bae67c61cf",
"text": "No. Not directly. A company issues stock in order to raise capital for building its business. Once the initial shares are sold to the public, the company doesn't receive additional funds from future transactions of those shares of stock between the public. However, the company could issue more shares at the new higher price to raise more capital.",
"title": ""
},
{
"docid": "adbdd54925b565f216b4280ab7340fb6",
"text": "Selling stock means selling a portion of ownership in your company. Any time you issue stock, you give up some control, unless you're issuing non-voting stock, and even non-voting stock owns a portion of the company. Thus, issuing (voting) shares means either the current shareholders reduce their proportion of owernship, or the company reissues stock it held back from a previous offering (in which case it no longer has that stock available to issue and thus has less ability to raise funds in the future). From Investopedia, for exmaple: Secondary offerings in which new shares are underwritten and sold dilute the ownership position of stockholders who own shares that were issued in the IPO. Of course, sometimes a secondary offering is more akin to Mark Zuckerberg selling some shares of Facebook to allow him to diversify his holdings - the original owner(s) sell a portion of their holdings off. That does not dilute the ownership stake of others, but does reduce their share of course. You also give up some rights to dividends etc., even if you issue non-voting stock; of course that is factored into the price presumably (either the actual dividend or the prospect of eventually getting a dividend). And hopefully more growth leads to more dividends, though that's only true if the company can actually make good use of the incoming funds. That last part is somewhat important. A company that has a good use for new funds should raise more funds, because it will turn those $100 to $150 or $200 for everyone, including the current owners. But a company that doesn't have a particular use for more money would be wasting those funds, and probably not earning back that full value for everyone. The impact on stock price of course is also a major factor and not one to discount; even a company issuing non-voting stock has a fiduciary responsibility to act in the interest of those non-voting shareholders, and so should not excessively dilute their value.",
"title": ""
},
{
"docid": "030434531674e30800c6f5ed5d97f02c",
"text": "\"There is a legal document called a \"\"Stock Purchase Agreement\"\" and it depends on who is the other party to the buyer in the Agreement. In almost all startups the sale goes through the company, so the company keeps the money. In your example, the company would be worth $10,000 \"\"Post-Money\"\" because the $1k got 10% of the Company.\"",
"title": ""
},
{
"docid": "4218b3b9f76e1089d835b39e4b1f631a",
"text": "There are a LOT of variables at play here, so with the info you've provided we can't give you an exact answer. Generally speaking, employee options at a startup are valued by a 409a valuation (http://en.wikipedia.org/wiki/Internal_Revenue_Code_section_409A) once a year or more often. But it's entirely possible that the company split, or took a round of funding that reduced their valuation, or any other number of things. We'd need a good bit more information (which you may or may not have) to really answer the question.",
"title": ""
},
{
"docid": "59ed460e51c03b18119d4006de23a159",
"text": "Similar premise, yes. It's an investment so you're definitely hoping it grows so you can sell it for a profit/gain. Public (stock market) vs. private (shark tank) are a little different though in terms of how much money you get and the form of income. With stocks, if you buy X number of shares at a certain price, you definitely want to sell them when they are worth more. However, you don't get, say 0.001% (or whatever percentage you own, it would be trivial) of the profits. They just pay a dividend to you based on a pre-determined amount and multiply it by the number of shares you own and that would be your income. Unless you're like Warren Buffet and Berkshire who can buy significant stakes of companies through the stock market, then they can likely put the investment on the balance sheet of his company, but that's a different discussion. It would also be expensive as hell to do that. With shark tank investors, the main benefit they get is significant ownership of a company for a cheap price, however the risk can be greater too as these companies don't have a strong foundation of sales and are just beginning. Investing in Apple vs. a small business is pretty significant difference haha. These companies are so small and in such a weak financial position which is why they're seeking money to grow, so they have almost no leverage. Mark Cuban could swoop in and offer $50k for 25% and that's almost worth it relative to what $50k in Apple shares would get him. It's all about the return. Apple and other big public companies are mature and most of the growth has already happened so there is little upside. With these startups, if they ever take off then and you own 25% of the company, it can be worth billions.",
"title": ""
},
{
"docid": "764624b0e84789c70bc3f1b715a280c3",
"text": "Shares in a company represent a portion of a company. If that company takes in money and doesn't pay it out as a dividend (e.g. Apple), the company is still more valuable because it has cold hard cash as an asset. Theoretically, it's all the same whether your share of the money is inside the company or outside the company; the only immediate difference is tax treatment. Of course, for large bank accounts that means that an investment in the company is a mix of investment in the bank account and investment in the business-value of the company, which may stymie investors who aren't particularly interested in buying larve amounts of bank accounts (known for low returns) and would prefer to receive their share of the cash to invest elsewhere (or in the business portion of the company.) Companies like Apple have in fact taken criticism for this. Your company could also use that cash to invest in itself (growing the value of its profits) or buy other companies that are worth money, essentially doing the job for you. Of course, they can do the job well or they can do it poorly... A company could also be acquired by a larger company, or taken private, in exchange for cash or the stock of another company. This is another way that the company's value could be returned to its shareholders.",
"title": ""
},
{
"docid": "0b36fbeef3d2e0382204ce3a2d75bfba",
"text": "\"Hi Amy, thank you for your article. Got to say however that I tend to disagree. I've been through the venture rabbit hole a number of times. Each one was an experience I'll never forget and wouldn't trade for anything. I learned so much more about how the business world actually works (or...doesn't) than I would have at some more established company. That said, I am also quite sour on the whole VC thing and at my most recent startup we've foregone outside investors and bootstrapped things from the get go. It was probably the best decision we made because it allowed us to be flexible in our strategy and not always beholden to the \"\"quick exit\"\" that VC money always drives. However, I realize that not all businesses can be like ours. We started off as a consulting company and moved into build products as our cash reserve grew. If we had wanted to do something big, or fast, or perhaps manufacture something, we would never have had the capital to get it going. Those types of business *need* outside funding, and generally it's only VCs who are willing to take the 1 in 20 bet that startups usually entail. For that, I'm glad that VCs are there, and think they provide a very valuable service and part of our economy. I just don't ever want to have to deal with them again...\"",
"title": ""
},
{
"docid": "2c22c52e4aaebff770a0c2e1acd89cf3",
"text": "\"A share of stock is a share of the underlying business. If one believes the underlying business will grow in value, then one would expect the stock price to increase commensurately. Participants in the stock market, in theory, assign value based on some combination of factors like capital assets, cash on hand, revenue, cash flow, profits, dividends paid, and a bunch of other things, including \"\"intangibles\"\" like customer loyalty. A dividend stream may be more important to one investor than another. But, essentially, non-dividend paying companies (and, thus, their shares) are expected by their owners to become more valuable over time, at which point they may be sold for a profit. EDIT TO ADD: Let's take an extremely simple example of company valuation: book value, or the sum of assets (capital, cash, etc) and liabilities (debt, etc). Suppose our company has a book value of $1M today, and has 1 million shares outstanding, and so each share is priced at $1. Now, suppose the company, over the next year, puts another $1M in the bank through its profitable operation. Now, the book value is $2/share. Suppose further that the stock price did not go up, so the market capitalization is still $1M, but the underlying asset is worth $2M. Some extremely rational market participant should then immediately use his $1M to buy up all the shares of the company for $1M and sell the underlying assets for their $2M value, for an instant profit of 100%. But this rarely happens, because the existing shareholders are also rational, can read the balance sheet, and refuse to sell their shares unless they get something a lot closer to $2--likely even more if they expect the company to keep getting bigger. In reality, the valuation of shares is obviously much more complicated, but this is the essence of it. This is how one makes money from growth (as opposed to income) stocks. You are correct that you get no income stream while you hold the asset. But you do get money from selling, eventually.\"",
"title": ""
},
{
"docid": "010b125cc1d4bd32e988b62c1b1cffdd",
"text": "\"No, a jump in market capitalization does not equal the amount that has been invested. Market cap is simply the stock price times the total number of shares. This represents a theoretical value of the company. I say \"\"theoretical\"\" because the company might not be able to be sold for that at all. The quoted stock price is simply what the last buyer and seller of stock agreed upon for the price of their trade. They really only represent themselves; other investors may decide that the stock is worth more or less than that. The stock price can move on very little volume. In this case, Amazon had released a very good earnings report after the bell yesterday, and the price jumped in after hours trading. The stock price is up, but that simply means that the few shares traded overnight sold for much higher than the closing price yesterday. After the market opens today and many more shares are traded, we'll get a better idea what large numbers of investors feel about the price. But no matter what the price does, the change in market cap does not equal the amount of new money being invested in the company. Market cap is the price of the most recent trades extrapolated out across all the shares.\"",
"title": ""
},
{
"docid": "a26da9e8aaa057b993b4972726e78b83",
"text": "For each class A share (GOOGL) there's a class C share (GOOG), hence the missing half in your calculation. The almost comes from the slightly higher market price of the class A shares (due to them having voting powers) over class C (which have no voting powers). There's also class B share which is owned by the founders (Larry, Sergei, Eric and perhaps some to Stanford University and others) and differs from class A by the voting power. These are not publicly traded.",
"title": ""
},
{
"docid": "8399543fe9b611cc89a88cecf78f9c74",
"text": "It's been awhile since my last finance course, so school me here: What is the market cap of a company actually supposed to represent? I get that it's the stock price X the # of shares, but what is that actually representing? Revenues? PV of all future revenues? PV of future cash flows? In any case, good write up. Valuation of tech stocks is quite the gambit, and you've done a good job of dissecting it for a layman.",
"title": ""
},
{
"docid": "7ffa49547ede3ac0898ebc62bf9ffbc6",
"text": "Yep, a lot of startup funding these days is called equity, which makes for nice valuation, but there are often so many extra stipulations (I've even read of caps on upside; wish I could find the Matt Levine column on it now) that it really is effectively debt.",
"title": ""
},
{
"docid": "3ccaab31cbf55185b353f68bf4441bad",
"text": "Presumably you're talking about the different share class introduced in the recent stock split, which mean that there are now three Google share classes: Due to the voting rights, Class A shares should be worth more than class C, but how much only time will tell. Actually, one could very well argue that a non-voting share of a company that pays no dividends has no value at all. It's unlikely the markets will see it that way, though.",
"title": ""
},
{
"docid": "14f2999deae606e6f6c4ece90479ef58",
"text": "If the company's ownership is structured similarly to a typical start-up then an 1% employee ownership in a company which sells for 1 million will yield far less than 10k due to various liquidation preferences of the investors, different share classes, etc. It's pretty hard to get a specific number because it depends a lot on the details of earlier fundraising and stock grants. That said, unless the company is circling the drain and the sale was just to avoid BK, the share price you get should be higher unless the share class structure and acquisition deal are completely unfair.",
"title": ""
},
{
"docid": "6ea060c6609dda916ca73e499a6d44a5",
"text": "A company generally sells a portion of its ownership in an IPO, with existing investors retaining some ownership. In your example, they believe that the entire company is worth $25MM, so in order to raise $3MM it is issuing stock representing 12% of the ownership stake (3/25), which dilutes some or all of the existing stockholders' claims.",
"title": ""
}
] |
fiqa
|
f8a8e12e42e5a32965d32f8e9aaeb0f9
|
Is it better to buy put options or buy an inverse leveraged ETF?
|
[
{
"docid": "49bbe5472ca883c7041040c040f2ab7d",
"text": "You don't have to think it is going down, it is currently trending down as on a weekly chart there are lower lows and lower highs. Until there is a higher low with confirmation of a higher high, the downtrend will continue. The instrument you use to profit from a market drop depends on your risk profile, the time frame you are looking at, and your trading plan and risk management. With a put option your loss is limited to your initial premium and your potential profits can be quite large compared to the premium paid, however your timeframe is limited to the expiry of the option. You could buy a longer dated option but this will cost more in the premium you pay. With inverse ETF you are not restricted by an expiry date, but if you don't have appropriate risk management in place your potential losses can be large. With a leveraged inverse ETF again you are not restricted by an expiry date, you can potentially make higher percentage profits than with an standard ETF. but once again your losses can be very large (larger than you initial investment) if you don't have appropriate risk management in place.",
"title": ""
},
{
"docid": "8669ca18d1876d62225229827919ee84",
"text": "\"Depends on how far down the market is heading, how certain you are that it is going that way, when you think it will fall, and how risk-averse you are. By \"\"better\"\" I will assume you are trying to make the most money with this information that you can given your available capital. If you are very certain, the way that makes the most money for the least investment from the options you provided is a put. If you can borrow some money to buy even more puts, you will make even more. Use your knowledge of how far and when the market will fall to determine which put is optimal at today's prices. But remember that if the market stays flat or goes up you lose everything you put in and may owe extra to your creditor. A short position in a futures contract is also an easy way to get extreme leverage. The extremity of the leverage will depend on how much margin is required. Futures trade in large denominations, so think about how much you are able to put to risk. The inverse ETFs are less risky and offer less reward than the derivative contracts above. The levered one has twice the risk and something like twice the reward. You can buy those without a margin account in a regular cash brokerage, so they are easier in that respect and the transactions cost will likely be lower. Directly short selling an ETF or stock is another option that is reasonably accessible and only moderately risky. On par with the inverse ETFs.\"",
"title": ""
},
{
"docid": "30d4f2b1754be91f57a993e6cefa797c",
"text": "The only use of options that I will endorse is selling them. If you believe the market is going down then sell covered, out of the money, calls. Buying calls or buying puts usually wastes money. That is because of a quality called Theta. If the underlying security stays the same the going price of an option will decrease, every day, by the Theta amount. Think of options as insurance. A person only makes money by selling insurance, not by buying it.",
"title": ""
}
] |
[
{
"docid": "8494644078503993e2ff848a53ef4583",
"text": "There are ETF funds that only purchase preferred stock from banks. I have one that pays a monthly dividend of a little under 6% per year. That means that it pays just under 0.5% every month. The purchase price of this stock just slowly goes up and up. You can do a whole lot better than 2% per year. The crux of the issue, as I understand it, is the lousy 2% interest she is getting. My point is that you can do a lot better than 2%. An ETF is not a scam. The price has stability and slow growth because it buys preferred stock from banks. http://www.marketwatch.com/investing/Fund/PGF?countrycode=US http://stockcharts.com/h-sc/ui?s=PGF&p=D&yr=2&mn=3&dy=0&id=p52078664654 Yes, she should invest. My answer is yes because 2% ROI is a lousy return and she can do better. Looking at the 200 day moving average, the price goes from 15.25 in May of 2014 to 17.95 in Dec of 2015. That, in price appreciation alone, is a 17.7% increase. Add on top of that a 0.5% increase per month and you get a stellar 27.7% Total Return. The increase in the Fed funds rate is a benefit to banks. PGF invests in Banks by buying their preferred stock. This means that the share price of PGF will continue to increase and its ability to pay the, nearly, 6% per year dividend will also improve.",
"title": ""
},
{
"docid": "1bd71d2b21416caa623fa525043c3812",
"text": "That's not 100% correct, as some leveraged vehicles choose to re-balance on a monthly basis making them less risky (but still risky). If I'm not mistaken the former oil ETN 'DXO' was a monthly re-balance before it was shut down by the 'man' Monthly leveraged vehicles will still suffer slippage, not saying they won't. But instead of re-balancing 250 times per year, they do it 12 times. In my book less iterations equals less decay. Basically you'll bleed, just not as much. I'd only swing trade something like this in a retirement account where I'd be prohibited from trading options. Seems like you can get higher leverage with less risk trading options, plus if you traded LEAPS, you could choose to re-balance only once per year.",
"title": ""
},
{
"docid": "cfe07a5e0fcc828bbcbcfe452ecd4d1b",
"text": "The risk situation of the put option is the same whether you own the stock or not. You risk $5 and stand to gain 0 to $250 in the period before expiration (say $50 if the stock reaches $200 and you sell). Holding the stock or not changes nothing about that. What is different is the consideration as to whether or not to buy a put when you own the stock. Without an option, you are holding a $250 asset (the stock), and risking that money. Should you sell and miss opportunity for say $300? Or hold and risk loss of say $50 of your $250? So you have $250 at risk, but can lock in a sale price of $245 for say a month by buying a put, giving you opportunity for the $300 price in that month. You're turning a risk of losing $250 (or maybe only $50 more realistically) into a risk of losing only $5 (versus the price your stock would get today).",
"title": ""
},
{
"docid": "78fb7b54077f8e66ce9097b1568768b3",
"text": "So this is only a useful strategy if you already own the stock and want protection. The ITM put has a delta closer to 1 than an OTM put. But all LEAPS have massive amounts of theta. Since the delta is closer to 1 it will mimic the price movements of the underlying which has a delta of 1. And then you can sell front month calls on that over time. Note, this strategy will tie up a large amount of capital.",
"title": ""
},
{
"docid": "6735f84dcd7acb165b02e3d9718e3125",
"text": "The liquidity is quite bad. I have seen open Intrest drop from thousands to zero. Theta and the lack of liquidity are strong reasons not to buy options. Instead, consider selling them. They say that most Option purchases expire worthless. Why is this so? Because hedge funds buy those out-of-the-money puts in case their position goes against them (like insurance). Make money selling insurance. No one makes money buying insurance.",
"title": ""
},
{
"docid": "5eba55b8b3ae2afd8cc8c689c49f5463",
"text": "\"More perspective on whether buying the stock (\"\"going long\"\") or options are better. My other answer gave tantalizing results for the option route, even though I made up the numbers; but indeed, if you know EXACTLY when a move is going to happen, assuming a \"\"non-thin\"\" and orderly option market on a stock, then a call (or put) will almost of necessity produce exaggerated returns. There are still many, many catches (e.g. what if the move happens 2 days from now and the option expires in 1) so a universal pronouncement cannot be made of which is better. Consider this, though - reputedly, a huge number of airline stock options were traded in the week before 9/11/2001. Perversely, the \"\"investors\"\" (presumably with the foreknowledge of the events that would happen in the next couple of days) could score tremendous profits because they knew EXACTLY when a big stock price movement would happen, and knew with some certainty just what direction it would go :( It's probably going to be very rare that you know exactly when a security will move a substantial amount (3% is substantial) and exactly when it will happen, unless you trade on inside knowledge (which might lead to a prison sentence). AAR, I hope this provides some perspective on the magnitude of results above, and recognizing that such a fantastic outcome is rather unlikely :) Then consider Jack's answer above (his and all of them are good). In the LONG run - unless one has a price prediction gift smarter than the market at large, or has special knowledge - his insurance remark is apt.\"",
"title": ""
},
{
"docid": "db1d6dbabfd82180886694f24033d49f",
"text": "PST, or any of the Ultra Short/Long funds aren't actually holding any traditional securities -- just swaps that are betting on the underlying asset. They also don't track the value of the underlying security over time -- just for one day. (And they're not even guaranteed to do that!) IEF is an actual treasury bond fund that holds real-life treasury securities, not swaps. Shorting a fund like IEF is one option, another is to buy options on a fund like IEF. Be very careful investing with ETFs, and don't buy any until you fully read and understand the prospectus. I got burned by an Ultra Long ETF because I didn't do my homework.",
"title": ""
},
{
"docid": "5e378ee1d0052e8237391cc8a26c5555",
"text": "How should we disregard leverage when it's the leverage that creates the 'wipe-out' potential? If you simply convert 100K EUR to USDollars, you dollars might then fluctuate a few thousand, maybe even 10K over a year, but the guy that only put up 1000 EUR to do this has a disproportionally higher risk.",
"title": ""
},
{
"docid": "dca3cf0140f34ac6c9cd6621379c2367",
"text": "In the case of VFIAX versus VOO, if you're a buy-and-hold investor, you're probably better off with the mutual fund because you can buy fractional shares. However, in general the expense ratio for ETFs will be lower than equivalent mutual funds (even passive index funds). They are the same in this case because the mutual fund is Admiral Class, which has a $10,000 minimum investment that not all people may be able to meet. Additionally, ETFs are useful when you don't have an account with the mutual fund company (i.e. Vanguard), and buying the mutual fund would incur heavy transaction fees.",
"title": ""
},
{
"docid": "a1067988ca3dbd54832b06c64a3db0e8",
"text": "Based on what you wrote, you would be better off with no position to start, and then enter a buy stop 10% above the market, and a sell stop 10% below the market, both to open positions depending on which way the market moves. If the market doesn't move that 10%, you stay flat. However, a long option straddle position requires that the market moves significantly one way or the other just so you recover the premium that you paid for the straddle. If the market doesn't move, you will lose money on your straddle due to theta decay and a drop in volatility. Alternatively, you could buy a strangle, with a call strike 10% out, and a put strike 10% out. The premiums would be much much lower, and these wculd take the place of the stop entries. Personally, I would never buy a straddle, but I do sometimes sell them, especially when implied volatility is very high.",
"title": ""
},
{
"docid": "a1c8b750f6c21453c59ba60da65eed80",
"text": "\"Step 2 is wrong. Leverage is NOT necessary. It increases possible gain, but increases risk of loss by essentially the same amount. Those two numbers are pretty tightly linked by market forces. See many, many other answers here showing that one can earn \"\"market rate\"\" -- 8% or so -- with far less risk and effort, if one is patient, and some evidence that one can do better with more effort and not too much more risk. And yes, investing for a longer time horizon is also safer.\"",
"title": ""
},
{
"docid": "5a9627f82260bb39df76ebc5d187e383",
"text": "according to the Options Industry council ( http://www.optionseducation.org/tools/faq/splits_mergers_spinoffs_bankruptcies.html ) put options the shares (and therefore the options) may continue trading OTC but if the shares completely stop trading then: if the courts cancel the shares, whereby common shareholders receive nothing, calls will become worthless and an investor who exercises a put would receive 100 times the strike price and deliver nothing. The reason for this is that it is not the company whose shares you have the option on that you have a contract with but the counterparty who wrote the option. If the counterparty goes bankrupt then you may not get paid out (depending on assets available at liquidation - this is counterparty risk) but, unless the two are the same, if the company whose shares you have a put option on declares bankruptcy then you will get paid",
"title": ""
},
{
"docid": "565b9544c89d35295a9af661cc3a06fd",
"text": "\"If you have someplace to put the money which you think will yield significantly better returns, by all means sell and buy that. On the other hand, if you think this stock is likely to recover its value, you might want to hold it, or even buy more as a \"\"contrarian\"\" investment. Buy low, sell high, as much as possible. And diversify. You need to make a judgement call about the odds. We can point out the implications, but in the end whether to sell, buy, hold or hedge is your decision. (This also suggests you need to sit down and draw up a strategy. Agonizing over every decision is not productive. If you have a plan, you make this sort of decision before you ever put money into the stock in the first place.)\"",
"title": ""
},
{
"docid": "1e9cebde4465fbb20cb434e8b71958d4",
"text": "First, a margin account is required to trade options. If you buy a put, you have the right to deliver 100 shares at a fixed price, 50 can be yours, 50, you'll buy at the market. If you sell a put, you are obligated to buy the shares if put to you. All options are for 100 shares, I am unaware of any partial contract for fewer shares. Not sure what you mean by leveraging the position, can you spell it out more clearly?",
"title": ""
},
{
"docid": "909417d8d10021a49861245cd34381e3",
"text": "\"Not to detract from the other answers at all (which are each excellent and useful in their own right), but here's my interpretation of the ideas: Equity is the answer to the question \"\"Where is the value of the company coming from?\"\" This might include owner stakes, shareholder stock investments, or outside investments. In the current moment, it can also be defined as \"\"Equity = X + Current Income - Current Expenses\"\" (I'll come back to X). This fits into the standard accounting model of \"\"Assets - Liabilities = Value (Equity)\"\", where Assets includes not only bank accounts, but also warehouse inventory, raw materials, etc.; Liabilities are debts, loans, shortfalls in inventory, etc. Both are abstract categories, whereas Income and Expense are hard dollar amounts. At the end of the year when the books balance, they should all equal out. Equity up until this point has been an abstract concept, and it's not an account in the traditional (gnucash) sense. However, it's common practice for businesses to close the books once a year, and to consolidate outstanding balances. When this happens, Equity ceases to be abstract and becomes a hard value: \"\"How much is the company worth at this moment?\"\", which has a definite, numeric value. When the books are opened fresh for a new business year, the Current Income and Current Expense amounts are zeroed out. In this situation, in order for the big equation to equal out: Assets - Liabilities = X + Income - Expeneses the previous net value of the company must be accounted for. This is where X comes in, the starting (previous year's) equity. This allows the Assets and Liabilities to be non-zero, while the (current) Income and Expenses are both still zeroed out. The account which represents X in gnucash is called \"\"Equity\"\", and encompasses not only initial investments, but also the net increase & decreases from previous years. While the name would more accurately be called \"\"Starting Equity\"\", the only problem caused by the naming convention is the confusion of the concept Equity (X + Income - Expenses) with the account X, named \"\"Equity\"\".\"",
"title": ""
}
] |
fiqa
|
16f8aa7e2d7c9cdaeee59a84b67878e0
|
Interest payments for leveraged positions
|
[
{
"docid": "d7f2391e31ce498b64165c6829fe0da9",
"text": "\"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.\"",
"title": ""
}
] |
[
{
"docid": "9369686ff9624d06b4a4d5eeb8a3d237",
"text": "When you pay interest on a loan used to fund a legitimate investment or business activity, that interest becomes an expense that you can deduct against related income. For example, if you borrowed $10k to buy stocks, you could deduct the interest on that $10k loan from investment gains. In your case, you are borrowing money to invest in the stock of your company. You would be able to deduct the interest expense against investment gain (like selling stock or receiving dividends), but not from any income from the business. (See this link for more information.) You do not have to pay taxes on the interest paid to your father; that is an expense, not income. However, your father has to pay taxes on that interest, because that is income for him.",
"title": ""
},
{
"docid": "7b02b98626fee0603c28741c38a3d1b7",
"text": "I wouldn't recommend leveraged dividend fishing. Dividend stocks with such high dividends are highly volatile, you will run out of collateral to cover your trades very quickly",
"title": ""
},
{
"docid": "22f025f3845889d3cc252261cb9cc829",
"text": "I will add one point missing from the answers by CQM and THEAO. When you take a loan and invest the proceeds, the interest that you pay on the loan is deductible on Schedule A, Line 14 of your Federal income tax return under the category of Investment Interest Expense. If the interest expense is larger than all your investment earnings (not just those from the loan proceeds), then you can deduct at most the amount of the earnings, and carry over the excess investment interest paid this year for deduction against investment earnings in future years. Also, if some of the earnings are long-term capital gains and you choose to deduct the corresponding investment interest expense, then those capital gains are taxed as ordinary income instead of at the favored LTCG rate. You also have the option of choosing to deduct only that amount of interest that offsets dividend (and short-term capital gain) income that is taxed at ordinary rates, pay tax at the LTCG rate on the capital gains, and carry over rest of the interest for deduction in future years. In previous years when the tax laws called for reduction in the Schedule A deductions for high-income earners, this investment interest expense was exempt from the reduction. Whether future tax laws will allow this exemption depends on Congress. So, this should be taken into account when dealing with the taxes issue in deciding whether to take a loan to invest in the stock market.",
"title": ""
},
{
"docid": "1bd71d2b21416caa623fa525043c3812",
"text": "That's not 100% correct, as some leveraged vehicles choose to re-balance on a monthly basis making them less risky (but still risky). If I'm not mistaken the former oil ETN 'DXO' was a monthly re-balance before it was shut down by the 'man' Monthly leveraged vehicles will still suffer slippage, not saying they won't. But instead of re-balancing 250 times per year, they do it 12 times. In my book less iterations equals less decay. Basically you'll bleed, just not as much. I'd only swing trade something like this in a retirement account where I'd be prohibited from trading options. Seems like you can get higher leverage with less risk trading options, plus if you traded LEAPS, you could choose to re-balance only once per year.",
"title": ""
},
{
"docid": "38b1c484d23f6bd6605e7aa55bb6899f",
"text": "Interest payments You can make loans to people and collect interest.",
"title": ""
},
{
"docid": "8db18dd45326ffa6fad1f55fc05a345a",
"text": "http://www.scottrade.com/online-brokerage/interest-margin-rates.html Rates fluctuate based upon the federal funds rate.",
"title": ""
},
{
"docid": "d8daa76dbdb645d5b8cf76a415051d09",
"text": "\"You'd have to look at the terms of the loan to be sure, but if the interest compounds weekly then you'd have to calculate the effect of 3 compounding periods, then compute for weekly payments. The balance after 3 weeks would be: Using Excel's PMT function for that principal balance, I get a weekly payment of $189.48. If the interest doesn't compound, the principal balance will be about $8888.37 and the weekly payment would be $189.85. Note, however, that the terms of the loan could be completely customized, so you'd need to be sure that the payment and the amortization schedule make sense to you before you agree to the loan. Since the interest is very high, I suspect this is a \"\"no credit needed\"\" car loan which are notorious for unfavorable (to the borrower) terms.\"",
"title": ""
},
{
"docid": "ca30e776472a9f4a206f93e759e22900",
"text": "In this case, it looks like the interest is simply the nominal daily interest rate times number of days in the period. From that you can use a spreadsheet to calculate the total payment by trial and error. With the different number of days in each period, any formula would be very complicated. In the more usual case where the interest charge for each period is the same, the formula is: m=P*r^n*(r-1)/(r^n-1) where * is multiplication ^ is exponentiation / is division (Sorry, don't know if there's a way to show formulas cleanly on here) P=original principle r=growth factor per payment period, i.e. interest rate + 100% divided by 100, e.g. 1% -> 1.01 n=number of payments Note the growth factor above is per period, so if you have monthly payments, it's the rate per month. The last payment may be different because of rounding errors, unequal number of days per period, or other technicalities. Using that formula here won't give the right answer because of the unequal periods, but it should be close. Let's see: r=0.7% times an average of 28.8 days per period gives 20.16% + 1 = 1.2016. n=5 P=500 m=500*1.2016^5*(1.2016-1)/(1.2016^5-1) =167.78 Further off than I expected, but ballpark.",
"title": ""
},
{
"docid": "8d9a776d08c206dacd7cec3133072133",
"text": "\"With (1), it's rather confusing as to where \"\"interest\"\" refers to what you're paying and where it refers to what you're being paid, and it's confusing what you expect the numbers to work out to be. If you have to pay normal interest on top of sharing the interest you receive, then you're losing money. If the lending bank is receiving less interest than the going market rate, then they're losing money. If the bank you've deposited the money with is paying more than the going market rate, they're losing money. I don't see how you imagine a scenario where someone isn't losing money. For (2) and (3), you're buying stocks on margin, which certainly is something that happens, but you'll have to get an account that is specifically for margin trading. It's a specific type of credit with specific rules, and you if you want to engage in this sort of trading, you should go through established channels rather than trying to convert a regular loan into margin trading. If you get a personal loan that isn't specifically for margin trading, and buy stocks with the money, and the stocks tank, you can be in serious trouble. (If you do it through margin trading, it's still very risky, but not nearly as risky as trying to game the system. In some cases, doing this makes you not only civilly but criminally liable.) The lending bank absolutely can lose if your stocks tank, since then there will be nothing backing up the loan.\"",
"title": ""
},
{
"docid": "4bd07322012f097a21bf63a11cc85067",
"text": "Since the compounding period and payment period differs (Compounded Daily vs Paid Monthly), you need to find the effective interest rate for one payment period (month). This means that each month you pay 0.33387092772% of the outstanding principal as interest. Then use this formula to find the number of months: Where PV = 21750, Pmt = 220, i = 0.0033387092772 That gives 120 Months. Depending on the day count convention, (30/360 or 30.416/365 or Actual/Actual), the answer may differ slightly. Using Financial Calculator gives extremely similar answer. The total cash paid in the entire course of the loan is 120 x $220 = $26,400",
"title": ""
},
{
"docid": "1817994c9560574df390b55f263b5a9f",
"text": "In addition to the other answers, which cover the risks of what is essentially leveraged investing, I'd like to point out that the 2.6% penalty is a flat rate. If you are responsible for withholding your own taxes then you are paying tax four times a year. So any underpayment on your first quarterly tax payment will have much more time to accrue in the stock market than your last payment, although each underpayment will be penalized by the 2.6%. It may make sense for someone to make full payments on later payments but underpay on earlier ones.",
"title": ""
},
{
"docid": "5a85c32b5206c1616c747f3235aea00e",
"text": "The principal of the loan is the amount you borrow. The capitalized interest is added to the principal of the loan, because you are not paying this interest as it accrues. So when you begin payments, the principal of the loan is $5,500 + $436 = $5,936. Using the standard amortization formula (see this page for details), the per-month payment for a ten-year payment plan at 6.8% interest on principal of $5,936 is $68.31. One hundred twenty payments (each month for ten years) totals $8,197.40.",
"title": ""
},
{
"docid": "b8f73b9acadf8986c48c36572b1a410d",
"text": "First consider the basic case of what you are asking: you expect to have a future obligation to pay interest, and you are concerned that the rate when you pay it, will be higher than the rate today. In the simplest case, you could theoretically hedge that risk by buying an asset which pays the market interest rate. As the interest rate rises, increasing your costs, your return on this asset would also increase. This would minimize your exposure to interest rate fluctuations. There are of course two problems with this simplified solution: (1) The reason you expect to pay interest, is because you need/want to take on debt to purchase your house. To fully offset this risk by putting all your money in an asset which bears the market interest rate, would effectively be the same as just buying your house in cash. (2) The timing of the future outflow is a bit unique: you will be locking in a rate, in 5 years, which will determine the payments for the 5 years after that. So unless you own this interest-paying asset for that whole future duration, you won't immediately benefit. You also won't need / want to buy that asset today, because the rates from today to 2022 are largely irrelevant to you - you want something that directly goes against the prevailing mortgage interest rate in 2022 precisely. So in your specific case, you could in theory consider the following solution: You could short a coupon bond, likely one with a 10 year maturity date from today. As interest rates rise, the value of the coupon bond [for it's remaining life of 5 years], which has an implied interest rate set today, will drop. Because you will have shorted an asset dropping in value, you will have a gain. You could then close your short position when you buy your house in 5 years. In theory, your gain at that moment in time, would equal the present value of the rate differential between today's low mortgage rates and tomorrow's high interest rates. There are different ways mechanically to achieve what I mention above (such as buying forward derivative contracts based on interest rates, etc.), but all methods will have a few important caveats: (1) These will not be perfect hedges against your mortgage rates, unless the product directly relates to mortgage rates. General interest rates will only be a proxy for mortgage rates. (2) There is additional risk in taking this type of position. Taking a short position / trading on a margin requires you to make ongoing payments to the broker in the event that your position loses money. Theoretically those losses would be offset by inherent gains in the future, if mortgage rates stay low / go lower, but that offset isn't in your plan for 5 years. (3) 5 years may be too long of a timeline for you to accurately time the maturity of your 'hedge' position. If you end up moving in 7 years, then changes in rates between 2022-2024 might mean you lose on both your 'hedge' position and your mortgage rates. (4) Taking on a position like this will tie up your capital - either because you are directly buying an asset you believe will offset growing interest rates, or because you are taking on a margin account for a short position (preventing you from using a margin account for other investments, to the extent you 'max out' your margin limit). I doubt any of these solutions will be desirable to an individual looking to mitigate interest rate risk, because of the additional risks it creates, but it may help you see this idea in another light.",
"title": ""
},
{
"docid": "1b2fe13efa1af1ae35a47d65b5cddbe4",
"text": "No, the interest payments you receive do not change. To help avoid confusion, it is better to call those payments the coupons of the bond. Each treasury note or bond is issued with a certain coupon that remains fixed throughout its whole life. However, as the general level of bank interest rates change maybe because the FED is moving its deposit rate for banks, the value of the treasury bond will change. At maturity it will always be worth its face value, but at any time before that its price will depend on the general level of interest rates in the country. Because of the way a bond is structured, it is usually possible to convert the bond's price into a yield, which is usually a percentage like 3% or sometwhere near the current level of general interest rates. But don't be confused, this yield is just an alternative way of stating the current price of the treasury bond, and it changes as the prices of the bond changes. It is not the coupon that is changing, but the yield.",
"title": ""
},
{
"docid": "a990852a5fbc94b6c23aa4c32112c7c2",
"text": "There are two obvious cases in which your return is lower with a heavily leveraged investment. If a $100,000 investment of your own cash yields $1000 that's a 1% return. If you put in $50,000 of your own money and borrow $50,000 at 2%, you get a 0% return (After factoring in the interest as above.) If you buy an investment for $100,000 and it loses $1000, that's a -1% return. If you borrow $100,000 and buy two investments, and they both lose $1000, that's a -2% return.",
"title": ""
}
] |
fiqa
|
5ad570bac5f084157f252edbdb28d0ac
|
How much principal do I get back with a target-maturity ETF?
|
[
{
"docid": "5aac882d0fd51a8aa74372c90ee294ab",
"text": "Adding a couple more assumptions, I'd compute about $18.23 would be that pay out in 2018. This is computed by taking the Current Portfolio's Holdings par values and dividing by the outstanding shares(92987/5100 for those wanting specific figures used). Now, for those assumptions: Something to keep in mind is that bonds can valued higher than their face value if the coupon is higher than other issues given the same risk. If you have 2 bonds maturing in 3 years of the same face value and same risk categories though one is paying 5% and the other is paying 10% then it may be that the 5% sells at a discount to bring the yield up some while the other sells at a premium to bring the yield down. Thus, you could have bonds worth more before they mature that will eventually lose this capital appreciation.",
"title": ""
}
] |
[
{
"docid": "e3cc2326e8fa93452b5c41bfe54f0584",
"text": "Right now, the unrealized appreciation of Vanguard Tax-Managed Small-Cap Fund Admiral Shares is 28.4% of NAV. As long as the fund delivers decent returns over the long term, is there anything stopping this amount from ballooning to, say, 90% fifty years hence? I'd have a heck of a time imagining how this grows to that high a number realistically. The inflows and outflows of the fund are a bigger question along with what kinds of changes are there to capital gains that may make the fund try to hold onto the stocks longer and minimize the tax burden. If this happens, won't new investors be scared away by the prospect of owing taxes on these gains? For example, a financial crisis or a superior new investment technology could lead investors to dump their shares of tax-managed index funds, triggering enormous capital-gains distributions. And if new investors are scared away, won't the fund be forced to sell its assets to cover redemptions (even if there is no disruptive event), leading to larger capital-gains distributions than in the past? Possibly but you have more than a few assumptions in this to my mind that I wonder how well are you estimating the probability of this happening. Finally, do ETFs avoid this problem (assuming it is a problem)? Yes, ETFs have creation and redemption units that allow for in-kind transactions and thus there isn't a selling of the stock. However, if one wants to pull out various unlikely scenarios then there is the potential of the market being shut down for an extended period of time that would prevent one from selling shares of the ETF that may or may not be as applicable as open-end fund shares. I would however suggest researching if there are hybrid funds that mix open-end fund shares with ETF shares which could be an alternative here.",
"title": ""
},
{
"docid": "441c9c7dbaf65942463e75068c6c32b4",
"text": "I'll offer another answer, using different figures. Let's assume 6% is the rate of return you can expect. You are age 25, and plan to retire at age 65. If you have $0 and want $1M at retirement, you will need to put away $524.20/month, or $6,290.40/year, which is 15% of $41,936. So $41,936 is what you'd need to make per year in order to get to your target. You can calculate your own figures with a financial calculator: 480 months as your term (or, adjust this to your time horizon in months), .486755% as your interest (or, take your assumed interest rate + 1 to the 1/12th power and subtract 1 to convert to a monthly interest rate), 0 as your PV, and $1M as your FV; then solve for PMT.",
"title": ""
},
{
"docid": "b809640eecffebcc467fe3278d7eec43",
"text": "Real world example. AGNC = 21.79 time of post. Upcoming .22 cents ex-div Mar 27th Weekly options Mar 27th - $22 strike put has a bid ask spread of .22 / .53. If you can get that put for less than .21 after trade fee's, you'll have yourself a .22 cent arbitrage. Anything more than .21 per contract eats into your arbitrage. At .30 cents you'll only see .13 cent arbitrage. But still have tax liability on .22 cents. (maybe .05 cents tax due to REIT non-exempt dividend rates) So that .13 gain is down to a .08 cents after taxes.",
"title": ""
},
{
"docid": "470a55e9ddb04e17e975a30f9abc11ec",
"text": "Say one makes $60k/yr. The net gain is that half these funds are received about 2 weeks prior. To keep the math simple, let's assume a 12% return per year on the funds during this time. $30K * 12% is $3600. But 2 weeks is about 4% of a year, so $144. That's at a 12% return. In an offset mortgage the return will be closer to 4%, a $48/yr benefit. With short term rates at or below 1%, we're really looking at a gain of $12 or so for the extra time with the funds.",
"title": ""
},
{
"docid": "daeb68910f70be984d51f671d0e67cae",
"text": "The Creation/Redemption mechanism is how shares of an ETF are created or redeemed as needed and thus is where there can be differences in what the value of the holdings can be versus the trading price. If the ETF is thinly traded, then the difference could be big as more volume would be where the mechanism could kick in as generally there are blocks required so the mechanism usually created or redeemed in lots of 50,000 shares I believe. From the link where AP=Authorized Participant: With ETFs, APs do most of the buying and selling. When APs sense demand for additional shares of an ETF—which manifests itself when the ETF share price trades at a premium to its NAV—they go into the market and create new shares. When the APs sense demand from investors looking to redeem—which manifests itself when the ETF share price trades at a discount—they process redemptions. So, suppose the NAV of the ETF is $20/share and the trading price is $30/share. The AP can buy the underlying securities for $20/share in a bulk order that equates to 50,000 shares of the ETF and exchange the underlying shares for new shares in the ETF. Then the AP can turn around and sell those new ETF shares for $30/share and pocket the gain. If you switch the prices around, the AP would then take the ETF shares and exchange them for the underlying securities in the same way and make a profit on the difference. SEC also notes this same process.",
"title": ""
},
{
"docid": "ba304fbf8b1580d1a4cef5833694200f",
"text": "You've got the right idea, except that the stated interest rate is normalized for a 1-year investment. Hence if you buy a 4-week bill, you're getting something closer to 4/52 of what you've computed in your question. More precisely, the Treasury uses a 360 day year for these calculations, so you multiply the stated rate by (number of days until maturity)/360 to get the actual rate of return.",
"title": ""
},
{
"docid": "caa5d97fc383cae03ecd6b727f445d39",
"text": "I-series Treasury bonds are the closest thing you can get to an investment where your principal is guaranteed to be returned (even accounting for inflation). https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm Treasury Inflation Protected Securities are another option, but if you have to sell before maturity then 'the market' may not pay you back your initial investment. https://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm",
"title": ""
},
{
"docid": "c7ce8a8943cebbacfc68a2735d5f6f1d",
"text": "\"I wonder if ETF's are further removed from the actual underlying holdings or assets giving value to the fund, as compared to regular mutual funds. Not exactly removed. But slightly different. Whenever a Fund want to launch an ETF, it would buy the underlying shares; create units. Lets say it purchased 10 of A, 20 of B and 25 of C. And created 100 units for price x. As part of listing, the ETF company will keep the purchased shares of A,B,C with a custodian. Only then it is allowed to sell the 100 units into the market. Once created, units are bought or sold like regular stock. In case the demand is huge, more units are created and the underlying shares kept with custodian. So, for instance, would VTI and Total Stock Market Index Admiral Shares be equally anchored to the underlying shares of the companies within the index? Yes they are. Are they both connected? Yes to an extent. The way Vanguard is managing this is given a Index [Investment Objective]; it is further splitting the common set of assets into different class. Read more at Share Class. The Portfolio & Management gives out the assets per share class. So Vanguard Total Stock Market Index is a common pool that has VTI ETF, Admiral and Investor Share and possibly Institutional share. Is VTI more of a \"\"derivative\"\"? No it is not a derivative. It is a Mutual Fund.\"",
"title": ""
},
{
"docid": "58986463fbf12cdd78a18aa57e6414b2",
"text": "No that is your implicit return if you hold it to maturity per year. That yield is quoted per annum. You will receive semi-annual payments base on the coupon of whatever off the run 10yr you buy. If your coupon is 2% then you will receive $10 bi-yearly. Mind you, buying a 10 year in this environment will yield a negative real return, meaning after inflation over 10 years you will have your entire principal back, but inflation adjusted it will have less purchasing power than today, meaning there isn't enough yield to make the purchase worth it. Also about your upward slope question, yes the 30 will yield more than the 2,5,7,10. This is because longer time means more risk. Will in the future the USA be perceived as near riskless? There is also interest rate risk, and liquidity risk.",
"title": ""
},
{
"docid": "8b16542ff6aa0d91ed303490a3691bc1",
"text": "You could use the Gordon growth model implied expected return: P = D/(r-g) --> r = D/P (forward dividend yield) + g (expected dividend growth). But obviously there is no such thing as a good market return proxy.",
"title": ""
},
{
"docid": "2b23681c3322b5595b3103d3e8839086",
"text": "\"Generally, ETFs work on the basis that there exists a pair of values that can be taken at any moment in time: A Net Asset Value of each share in the fund and a trading market price of each share in the fund. It may help to picture these in baskets of about 50,000 shares for the creation/redemption process. If the NAV is greater than the market price, then arbitrageurs will buy up shares at the market price and do an \"\"in-kind\"\" transaction that will be worth the NAV value that the arbitrageurs could turn around and sell for an immediate profit. If the market price is greater than the NAV, then the arbitrageurs will buy up the underlying securities that can be exchanged \"\"in-kind\"\" for shares in the fund that can then be sold on the market for an immediate profit. What is the ETF Creation/Redemption Mechanism? would be a source on this though I imagine there are others. Now, in the case of VXX, there is something to be said for how much trading is being done and what impact this can have. From a July 8, 2013 Yahoo Finance article: At big option trade in the iPath S&P 500 VIX Short-Term Futures Note is looking for another jump in volatility. More than 250,000 VXX options have already traded, twice its daily average over the last month. optionMONSTER systems show that a trader bought 13,298 August 26 calls for the ask price of $0.24 in volume that was 6 times the strike's previous open interest, clearly indicating new activity. Now the total returns of the ETF are a combination of changes in share price plus what happens with the distributions which could be held as cash or reinvested to purchase more shares.\"",
"title": ""
},
{
"docid": "6ad39f83aacc8997b0def6e760c28763",
"text": "You have to call Interactive Brokers for this. This is what you should do, they might even have a web chat. These are very broker specific idiosyncrasies, because although margin rules are standardized to an extent, when they start charging you for interest and giving you margin until settlement may not be standardized. I mean, I can call them and tell you what they said for the 100 rep.",
"title": ""
},
{
"docid": "123f0272358ed7eadb08eeecede863eb",
"text": "Yes, it can buy back the call, but much before stock hits the $30 mark. Let us say you got 1$ from selling the call. So the total money in your account is 4$ + 1 $ = 5 $. When stock hits 10$ (your strike), the maintenance margin is 5$. As soon as stock goes past 10, your maintenance margin is violated. So broker will buy back your call (at least IB does that, it does not wait for a margin call). Now if the stock gapped up from 8 to 30,then yes, broker will buy it back at 30, so your account will have a negative balance. Assume the call cost 20$ when stock hit 30, your balance is: 5 - (30-10) = -15. Depending on broker, I suppose they will ask you to bring your account balance back up to positive. If they don't do that, they risk going out of business.",
"title": ""
},
{
"docid": "36f2b43894ed30fd935722af2ad6a7f2",
"text": "There isn't a single hard and fast return to expect. Securities, like all things in a free market, compete for your money. As the Fed sets the tone for the market with their overnight Fed funds rate, you might want to use a multiple of the 'benchmark' 10-year T-note yeald. So let's suppose that a good multiple is four. The current yeald on the 10-year T-note is hovering around two. That would give a target yeald of eight. http://stockcharts.com/h-sc/ui?s=%24UST10Y&p=W&b=5&g=0&id=p47115669808",
"title": ""
},
{
"docid": "299853db8bcf407fd6521d9673dc0cde",
"text": "One strategy to consider is a well-diversified index fund of equities. These have historically averaged 7-8% real growth. So withdrawing 3% or 4% yearly under that growth should allow you to withdraw 30+ years with little risk of drawing down all your capital. As a bonus you're savings target would come down from $10 million to $2.5 million to a little under $3.5 million.",
"title": ""
}
] |
fiqa
|
cc9a068111a4d0bb85ec18eed8867da8
|
Receiving partial payment of overseas loan/company purchase?
|
[
{
"docid": "9abd5ec370b082cf841e039c527ee01a",
"text": "\"Is it equity, or debt? Understanding the exact nature of one's investment (equity vs. debt) is critical. When one invests money in a company (presumably incorporated or limited) by buying some or all of it — as opposed to lending money to the company — then one ends up owning equity (shares or stock) in the company. In such a situation, one is a shareholder — not a creditor. As a shareholder, one is not generally owed a money debt just by having acquired an ownership stake in the company. Shareholders with company equity generally don't get to treat money received from the company as repayment of a loan — unless they also made a loan to the company and the payment is designated by the company as a loan repayment. Rather, shareholders can receive cash from a company through one of the following sources: \"\"Loan repayment\"\" isn't one of those options; it's only an option if one made a loan in the first place. Anyway, each of those ways of receiving money based on one's shares in a company has distinct tax implications, not just for the shareholder but for the company as well. You should consult with a tax professional about the most effective way for you to repatriate money from your investment. Considering the company is established overseas, you may want to find somebody with the appropriate expertise.\"",
"title": ""
}
] |
[
{
"docid": "4286dcc9448a1e648b3e608b69aa08de",
"text": "I'm having a difficult time understanding how Chevron is avoiding taxes through party related loans. From my understanding, Chevron is providing loans to its Australian subsidiary at interest rates higher than market benchmarks. Does this shift profits from Australia to the U.S. and how does it help Chevron avoid taxes even though the corporate tax rate is higher in the U.S. than in Australia? Wouln't they want to be taxed at the the lower tax rate in Australia than in the U.S.? The more description the better, thanks! Edit: I think I understand that Chevron is giving out large loans with high interest rates to its subsidiary in Australia and I think the Australian subsidiary is converting its revenues to pay back the loan thus looking like profit in the corporation's books in Delaware. How is the money to pay back interest being raised if not from revenue? And how is that revenue not being taxed?",
"title": ""
},
{
"docid": "0a2e54e542bab264da2cf0c2dc3f09b7",
"text": "There are different options here. Either way, ensure that you have a paper trail of all your payments. When in doubt, speak to a lawyer, there are many who offer free consultations.",
"title": ""
},
{
"docid": "3861087c248e59a31cf6b40248e0cf0f",
"text": "I wanted to know that what if the remaining 40% of 60% in a LTV (Loan to Value ratio ) for buying a home is not paid but the borrower only wants to get 60% of the total amount of home loan that is being provided by lending company. Generally, A lending company {say Bank] will not part with their funds unless you first pay your portion of the funds. This is essentially to safeguard their interest. Let's say they pay the 60% [either to you or to the seller]; The title is still with Seller as full payment is not made. Now if you default, the Bank has no recourse against the seller [who still owns the title] and you are not paying. Some Banks may allow a schedule where the 60/40 may be applied to every payment made. This would be case to case basis. The deal could be done with only paying 20% in the beginning to the buyer and then I have to pay EMI's of $7451. The lending company is offering you 1.1 million assuming that you are paying 700K and the title will be yours. This would safeguard the Banks interest. Now if you default, the Bank can take possession of the house and recover the funds, a distress sale may be mean the house goes for less than 1.8 M; say for 1.4 million. The Bank would take back the 1.1 million plus interest and other closing costs. So if you can close the deal by paying only 20%, Bank would ask you to close this first and then lend you any money. This way if you are not able to pay the balance as per the deal agreement, you would be in loss and not the Bank.",
"title": ""
},
{
"docid": "5bb6d5c5b9d7ef1d33fcf8f7c07e2e5a",
"text": "For the first case to occur, you need to have an agreement in place with the bank, this is called overdraft protection. It's done at a cost, but cheaper than the potential series of bounce fees. I've never heard of the second choice, partial payment. That's not to say that it's not possible. The payment not made is called a bounced check, you and the recipient will be harmed a fee. I believe it's a felony to write bad checks. Good to not write a check unless there's a positive balance taking that check into account. As Dilip suggests, ask your bank.",
"title": ""
},
{
"docid": "dcfb68ac04560cc5455ac9725a74c2d2",
"text": "You could think of points 1 and 3 combined to be similar to buying shares and selling calls on a part of those shares. $50k is the net of the shares and calls sale (ie without point 3, the investor would pay more for the same stake). Look up convertible debt, and why it's used. It's basically used so that both parties get 'the best of both world's' from equity and debt financing. Who is he selling his share to in point 2 back to the business or to outside investors?",
"title": ""
},
{
"docid": "79f388d2574f818e5c8512003c48d607",
"text": "This really comes down to tax structuring (which I am not an expert on), for public companies the acquiror almost always pays for the cash to prevent any taxable drawdown of overseas accounts, dividend taxes suck, etc. For a private company, first the debt gets swept, then special dividend out - dividends received by the selling corporate entity benefit from a tax credit plus it reduces the selling price of the equity, reducing capital gains taxes.",
"title": ""
},
{
"docid": "cafd80031a7f88125c0fa2b02d28426a",
"text": "I work for an investment group in Central Asia in private equity/project investment. We use SPV and collateralized convertible loans to enter a project, we issue the loan at our own commercial bank. For each industry, the exact mechanisms vary. In most outcomes, we end up in control of some very important part of the business, and even if we have minority shares on paper, no decision is made w/o our approval. For example, we enter cosntruction projects via aquisiton of land and pledging the land as equity for an SPV, then renting it to the project operator. Basically, when you enter a business, be in control of the decisions there, or have significant leverage on the operations. Have your own operating professionals to run it. Profit.",
"title": ""
},
{
"docid": "cdede2d6ab1995907a3815ae89f6983d",
"text": "it sounds like you don't have experience in this, and neither does your *investor*; which is a recipe for disaster (pun intended). Your first order of business is to check whether your investor is an *Accredited Investor* (google to see what it means), if s/he's not, **walk away**. If s/he's an accredited investor, find a lawyer who can help you navigate this process, however these are the issues: * lawyers are expensive, and lawyers who have experience in these type of transactions are even more expensive * you actually need 2 lawyers, one for you and one for the investor * if neither of you have experience, there will be a lot more billable hours from the lawyers..... In principle this can go 3 ways: 1. The investors give you a loan, you pay them interests on a periodic basis, and then also principal. Items to be negotiated: interest rates, repayment schedule, collateral, personal guarantees. Highly unlikely this is what the investors wants. 2. The Investors get equity. items to be negotiated: your compensation, % of ownership, how profits are divided, how profits are paid; who gets to decide what. 3. A combination of 1 and 2 above, a *Convertible Note*. There's a lot more, too much for a Reddit post. There's not an easy ELI5.",
"title": ""
},
{
"docid": "e24b171d757ef9cc138878484923fbde",
"text": "\"You promised to pay the loan if he didn't. That was a commitment, and I recommend \"\"owning\"\" your choice and following it through to its conclusion, even if you never do that again. TLDR: You made a mistake: own it, keep your word, and embrace the lesson. Why? Because you keep your promises. (Nevermind that this is a rare time where your answer will be directly recorded, in your credit report.) This isn't moralism. I see this as a \"\"defining moment\"\" in a long game: 10 years down the road I'd like you to be wise, confident and unafraid in financial matters, with a healthy (if distant) relationship with our somewhat corrupt financial system. I know austerity stinks, but having a strong financial life will bring you a lot more money in the long run. Many are leaping to the conclusions that this is an \"\"EX-friend\"\" who did this deliberately. Don't assume this. For instance, it's quite possible your friend sold the (car?) at a dealer, who failed to pay off this note, or did and the lender botched the paperwork. And when the collector called, he told them that, thinking the collector would fix it, which they don't do. The point is, you don't know: your friend may be an innocent party here. Creditors generally don't report late payments to the credit bureaus until they're 30 days late. But as a co-signer, you're in a bad spot: you're liable for the payments, but they don't send you a bill. So when you hear about it, it's already nearly 30 days late. You don't get any extra grace period as a co-signer. So you need to make a payment right away to keep that from going 30 late, or if it's already 30 late, to keep it from going any later. If it is later determined that it was not necessary for you to make those payments, the lender should give them back to you. A less reputable lender may resist, and you may have to threaten small claims court, which is a great expense to them. Cheaper to pay you. They say France is the nation of love. They say America is the nation of commerce. So it's not surprising that here, people are quick to burn a lasting friendship over a temporary financial issue. Just saying, that isn't necessarily the right answer. I don't know about you, but my friends all have warts. Nobody's perfect. Financial issues are just another kind of wart. And financial life in America is hard, because we let commerce run amok. And because our obsession with it makes it a \"\"loaded\"\" issue and thus hard to talk about. Perhaps your friend is in trouble but the actual villain is a predatory lender. Point is, the friendship may be more important than this temporary adversity. The right answer may be to come together and figure out how to make it work. Yes, it's also possible he's a human leech who hops from person to person, charming them into cosigning for him. But to assume that right out of the gate is a bit silly. The first question I'd ask is \"\"where's the car?\"\" (If it's a car). Many lenders, especially those who loan to poor credit risks, put trackers in the car. They can tell you where it is, or at least, where it was last seen when the tracker stopped working. If that is a car dealer's lot, for instance, that would be very informative. Simply reaching out to the lender may get things moving, if there's just a paperwork issue behind this. Many people deal with life troubles by fleeing: they dread picking up the phone, they fearfully throw summons in the trash. This is a terrifying and miserable way to deal with such a situation. They learn nothing, and it's pure suffering. I prefer and recommend the opposite: turn into it, deal with it head-on, get ahead of it. Ask questions, google things, read, become an expert on the thing. Be the one calling the lender, not the other way round. This way it becomes a technical learning experience that's interesting and fun for you, and the lender is dreading your calls instead of the other way 'round. I've been sued. It sucked. But I took it on boldly, and and actually led the fight and strategy (albeit with counsel). And turned it around so he wound up paying my legal bills. HA! With that precious experience, I know exactly what to do... I don't fear being sued, or if absolutely necessary, suing. You might as well get the best financial education. You're paying the tuition!\"",
"title": ""
},
{
"docid": "85110d666ba177dfbde6ed4aae613120",
"text": "Yes, truckloads of cash. /s It's exactly the same as your example, when people say to pay for a car in cash, they don't meany physical bills, but rather the idea that you aren't getting a loan. In most acquisitions, the buyer will usually pay with their own stock, pay in cash, or a combination of both.",
"title": ""
},
{
"docid": "c09e0ca4cba8ddc88883306ee7d79eac",
"text": "\"This sounds like a FATCA issue. I will attempt to explain, but please confirm with your own research, as I am not a FATCA expert. If a foreign institution has made a policy decision not to accept US customers because of the Foreign Financial Institution (FFI) obligations under FATCA, then that will of course exclude you even if you are resident outside the US. The US government asserts the principle of universal tax jurisdiction over its citizens. The institution may have a publicly available FATCA policy statement or otherwise be covered in a new story, so you can confirm this is what has happened. Failing that, I would follow up and ask for clarification. You may be able to find an institution that accepts US citizens as investors. This requires some research, maybe some legwork. Renunciation of your citizenship is the most certain way to circumvent this issue, if you are prepared to take such a drastic step. Such a step would require thought and planning. Note that there would be an expatriation tax (\"\"exit tax\"\") that deems a disposition of all your assets (mark to market for all your assets) under IRC § 877. A less direct but far less extreme measure would be to use an intermediary, either one that has access or a foreign entity (i.e. non-US entity) that can gain access. A Non-Financial Foreign Entity (NFFE) is itself subject to withholding rules of FATCA, so it must withhold payments to you and any other US persons. But the investing institutions will not become FFIs by paying an NFFE; the obligation rests on the FFI. PWC Australia has a nice little writeup that explains some of the key terms and concepts of FATCA. Of course, the simplest solution is probably to use US institutions, where possible. Non-foreign entities do not have foreign obligations under FATCA.\"",
"title": ""
},
{
"docid": "090598b25ad86dc8c42f5c2246085762",
"text": "Another option, not yet discussed here, is to allow the loan to go into default and let the loaning agency repossess the property the loan was used for, after which they sell it and that sale should discharge some significant portion of the loan. Knowing where the friend and property is, you may be able to help them carry out the repossession by providing them information. Meanwhile, your credit will take a significant hit, but unless your name is on the deed/title of the property then you have little claim that the property is yours just because you're paying the loan. The contract you signed for the loan is not going to be easily bypassed with a lawsuit of any sort, so unless you can produce another contract between you and your friend it's unlikely that you can even sue them. In short, you have no claim to the property, but the loaning agency does - perhaps that's the only way to avoid paying most of the debt, but you do trade some of your credit for it. Hopefully you understand that what you loaned wasn't money, but your credit score and earning potential, and that you will be more careful who you choose to lend this to in the future.",
"title": ""
},
{
"docid": "ce91d9cddac8975a34b9c075c7566916",
"text": "My understanding of this would be that this is for the portion of the subsidiary which they do not own. In other words they record 100% of the subsidiary on their books and then make this entry to account for the % which another company has a minority interest in.",
"title": ""
},
{
"docid": "954c15a2906ae58f160e91c32a0a1c96",
"text": "I wouldn't get too caught up with this. Doesn't sound like this is even stock reconciliation, more ensuring the cash you've received for dividends & other corporate actions agrees to your expected entitlements and if not raising claims etc.",
"title": ""
},
{
"docid": "1b4e473675196ea73e28c4a46e3d696f",
"text": "You're lending the money to your business by paying for it directly. The company accounts must reflect a credit (the amount you lend to it) and a debit (what it then puts that loan towards). It's fairly normal for a small(ish) owner-driven company to reflect a large loan-account for the owners. For example, if you have a room at home dedicated for the business it is impractical to pay rent directly via the company. The rental agreement is probably in your name, you pay the rent, and you reconcile it with the company later. You could even charge your company (taxable) interest on this loan. When you draw down the loan from the company you reverse this, debit your loan account and credit the company (paying off the debt). As far as tracking that expenditure, simply handle those third-party invoices in the normal way and file them for reference.",
"title": ""
}
] |
fiqa
|
62128b25e4488428eac8c0c4b2aa1118
|
Why is the bid-ask spread considered a cost?
|
[
{
"docid": "8ac3f7737b4923500e318bf9888f039a",
"text": "Your assets are marked to market. If you buy at X, and the market is bidding at 99.9% * X then you've already lost 0.1%. This is a market value oriented way of looking at costs. You could always value your assets with mark to model, and maybe you do, but no one else will. Just because you think the stock is worth 2*X doesn't mean the rest of the world agrees, evidenced by the bid. You surely won't get any margin loans based upon mark to model. Your bankers won't be convinced of the valuation of your assets based upon mark to model. By strictly a market value oriented way of valuing assets, there is a bid/ask cost. more clarification Relative to littleadv, this is actually a good exposition between the differences between cash and accrual accounting. littleadv is focusing completely on the cash cost of the asset at the time of transaction and saying that there is no bid/ask cost. Through the lens of cash accounting, that is 100% correct. However, if one uses accrual accounting marking assets to market (as we all do with marketable assets like stocks, bonds, options, etc), there may be a bid/ask cost. At the time of transaction, the bids used to trade (one's own) are exhausted. According to exchange rules that are now practically uniform: the highest bid is given priority, and if two bids are bidding the exact same highest price then the oldest bid is given priority; therefore the oldest highest bid has been exhausted and removed at trade. At the time of transaction, the value of the asset cannot be one's own bid but the highest oldest bid leftover. If that highest oldest bid is lower than the price paid (even with liquid stocks this is usually the case) then one has accrued a bid/ask cost.",
"title": ""
},
{
"docid": "8d589182b01015240f2be382c8bbf3cf",
"text": "\"This is a misconception. One of the explanations is that if you buy at the ask price and want to sell it right away, you can only sell at the bid price. This is incorrect. There are no two separate bid and ask prices. The price you buy (your \"\"bid\"\") is the same price someone else sells (their \"\"sell\"\"). The same goes when you sell - the price you sell at is the price someone else buys. There's no spread with stocks. Emphasized it on purpose, because many people (especially those who gamble on stock exchange without knowing what they're doing) don't understand how the stock market works. On the stock exchange, the transaction price is the match between the bid price and the ask price. Thus, on any given transaction, bid always equals ask. There's no spread. There is spread with commodities (if you buy it directly, especially), contracts, mutual funds and other kinds of brokered transactions that go through a third party. The difference (spread) is that third party's fee for assuming part of the risk in the transaction, and is indeed added to your cost (indirectly, in the way you described). These transactions don't go directly between a seller and a buyer. For example, there's no buyer when you redeem some of your mutual fund - the fund pays you money. So the fund assumes certain risk, which is why there's a spread in the prices to invest and to redeem. Similarly with commodities: when you buy a gold bar - you buy it from a dealer, who needs to keep a stock. Thus, the dealer will not buy from you at the same price: there's a premium on sale and a discount on buy, which is a spread, to compensate the dealer for the risk of keeping a stock.\"",
"title": ""
},
{
"docid": "1e7a36e86be911f447e69350463b2591",
"text": "\"As an aside, on most securities with a spread of the minimum tick, there would be no bid ask spread if so-called \"\"locked markets\"\", where the price of the best bid on one exchange is equal to the price of the best ask on another, were permitted. It is currently forbidden for a security to have posted orders having the same price for both bid and ask even though they're on different exchanges. Option spreads would narrow as well as a result.\"",
"title": ""
}
] |
[
{
"docid": "ddebe31d71f26aa6b26955c1a29cd63a",
"text": "One difference is the bid/ask spread will cost you more in a lower cost stock than a higher cost one. Say you have two highly liquid stocks with tiny spreads: If you wanted to buy say $2,000 of stock: Now imagine these are almost identical ETFs tracking the S&P 500 index and extrapolate this to a trade of $2,000,000 and you can see there's some cost savings in the higher priced stock. As a practical example, recently a popular S&P 500 ETF (Vanguard's VOO) did a reverse split to help investors minimize this oft-missed cost.",
"title": ""
},
{
"docid": "7e2f458774d5b5fc425a19b677227c5c",
"text": "The most likely explanation is that the calls are being bought as a part of a spread trade. It doesn't have to be a super complex trade with a bunch of buys or sells. In fact, I bought a far out of the money option this morning in YHOO as a part of a simple vertical spread. Like you said, it wouldn't make sense and wouldn't be worth it to buy that option by itself.",
"title": ""
},
{
"docid": "fa69c931afc88305d93ce38b6a9dec08",
"text": "The point is that the bid and ask prices dictate what you can buy and sell at (at market, at least), and the difference between the two, or spread, contributes implicitly to your gains or losses. For example, say your $1 stock actually had a bid of $0.90 and an ask of $1.10; i.e. say that $1 was the last price. You would have to buy the stock at the ask price of $1.10, but now you can only sell that stock at the bid price of $0.90. Thus, you would need to make at least that $0.20 spread before you can make a profit.",
"title": ""
},
{
"docid": "b809640eecffebcc467fe3278d7eec43",
"text": "Real world example. AGNC = 21.79 time of post. Upcoming .22 cents ex-div Mar 27th Weekly options Mar 27th - $22 strike put has a bid ask spread of .22 / .53. If you can get that put for less than .21 after trade fee's, you'll have yourself a .22 cent arbitrage. Anything more than .21 per contract eats into your arbitrage. At .30 cents you'll only see .13 cent arbitrage. But still have tax liability on .22 cents. (maybe .05 cents tax due to REIT non-exempt dividend rates) So that .13 gain is down to a .08 cents after taxes.",
"title": ""
},
{
"docid": "ae4e14c0cb5e0aaa699d1711f8503bce",
"text": "This is copying my own answer to another question, but this is definitely relevant for you: A bid is an offer to buy something on an order book, so for example you may post an offer to buy one share, at $5. An ask is an offer to sell something on an order book, at a set price. For example you may post an offer to sell shares at $6. A trade happens when there are bids/asks that overlap each other, or are at the same price, so there is always a spread of at least one of the smallest currency unit the exchange allows. Betting that the price of an asset will go down, traditionally by borrowing some of that asset and then selling it, hoping to buy it back at a lower price and pocket the difference (minus interest). Going long, as you may have guessed, is the opposite of going short. Instead of betting that the price will go down, you buy shares in the hope that the price will go up. So, let's say as per your example you borrow 100 shares of company 'X', expecting the price of them to go down. You take your shares to the market and sell them - you make a market sell order (a market 'ask'). This matches against a bid and you receive a price of $5 per share. Now, let's pretend that you change your mind and you think the price is going to go up, you instantly regret your decision. In order to pay back the shares, you now need to buy back your shares as $6 - which is the price off the ask offers on the order book. Similarly, the same is true in the reverse if you are going long. Because of this spread, you have lost money. You sold at a low price and bought at a high price, meaning it costs you more money to repay your borrowed shares. So, when you are shorting you need the spread to be as tight as possible.",
"title": ""
},
{
"docid": "4ba855945cfa8e9af71a8036def16481",
"text": "\"Bull means the investor is betting on a rising market. Puts are a type of stock option where the seller of a put option promises to buy 100 shares of stock from the buyer of the put option at a pre-agreed price called the strike price on any day before expiration day. The buyer of the put option does not have to sell (it is optional, thats why it is called buying an option). However, the seller of the put is required to make good on their promise to the buyer. The broker can require the seller of the put option to have a deposit, called margin, to help make sure that they can make good on the promise. Profit... The buyer can profit from the put option if the stock price moves down substantially. The buyer of the put option does not need to own the stock, he can sell the option to someone else. If the buyer of the put option also owns the stock, the put option can be thought of like an insurance policy on the value of the stock. The seller of the put option profits if the stock price stays the same or rises. Basically, the seller comes out best if they can sell put options that no one ends up using by expiration day. A spread is an investment consisting of buying one option and selling another. Let's put bull and put and spread together with an example from Apple. So, if you believed Apple Inc. AAPL (currently 595.32) was going up or staying the same through JAN you could sell the 600 JAN put and buy the 550 put. If the price rises beyond 600, your profit would be the difference in price of the puts. Let's explore this a little deeper (prices from google finance 31 Oct 2012): Worst Case: AAPL drops below 550. The bull put spread investor owes (600-550)x100 shares = $5000 in JAN but received $2,035 for taking this risk. EDIT 2016: The \"\"worst case\"\" was the outcome in this example, the AAPL stock price on options expiry Jan 18, 2013 was about $500/share. Net profit = $2,035 - $5,000 = -$2965 = LOSS of $2965 Best Case: AAPL stays above 600 on expiration day in JAN. Net Profit = $2,035 - 0 = $2035 Break Even: If AAPL drops to 579.65, the value of the 600 JAN AAPL put sold will equal the $2,035 collected and the bull put spread investor will break even. Commissions have been ignored in this example.\"",
"title": ""
},
{
"docid": "5d259edeee629b44ab345346a0717829",
"text": "\"When you buy a put option, you're buying the right to sell stock at the \"\"strike\"\" price. To understand why you have to pay separately for that, consider the other side of the transaction. If I agree to trade stock for money at above market rates, I need to make up the difference somewhere or face bankruptcy. That risk of loss is what the option price is about. You might assume that means the market expects the price of AMD to fall to 8.01 from it's current price of 8.06 by the option expiration date. But that would also mean call options below the market price is worthless. But that's not quite true; people who price options need to factor in volatility, since things change with time. The price MIGHT fall, and traders need to account for that risk. So 1.99 roughly represents the probability of AMD rising to 10. There's probably some technical analysis one can do to the chain, but I don't see any abnormality of AMD here.\"",
"title": ""
},
{
"docid": "bba854ffdfbf0f35c47ae1787697e656",
"text": "One broker told me that I have to simply read the ask size and the bid size, seeing what the market makers are offering. This implies that my order would have to match that price exactly, which is unfortunate because options contract spreads can be WIDE. Also, if my planned position size is larger than the best bid/best ask, then I should break up the order, which is also unfortunate because most brokers charge a lot for options orders.",
"title": ""
},
{
"docid": "90dfc0db81605a307939ab82a25f7f97",
"text": "A simple example - When looking at oil trading in different locations first I have some back of the envelop adjustments for the grade of oil, then look at storage costs (irrelevant in the case of electricity) and transport costs between two locations to see if physical players are actively arbing the spread. No strong views on reading material in this specific area - Google, google scholar and amazon all have relevant material. When it comes to your current problem, here are some questions to think about: 1. Is the power generated from the same commodity at location A and location W? 2. How has the spread changed in the past? Has trading location W actively hedged the worst cases of prices moves in location A? 3. Is it feasible to trade the commodity that location A generates the majority of its power from/how does that compare to electricity trading at location W as a hedge? 4. If hedging is really desirable, are you sure you can't do an illiquid over the counter hedge at location A? Paying a little bit more in the bid/ask for the hedge could be more desirable than trying to jump into a market you yourselves don't quite understand. 5. If your consultants come back with just some hedge ratios without discussing what drives the spreads between the two locations and where the spreads are currently be skeptical.",
"title": ""
},
{
"docid": "a561e2ff079274876b663253e7d2d371",
"text": "\"You're correct that the trading costs would be covered by the expense ratio. Just to be clear here, the expense ratio is static and doesn't change very often. It's set in such a way that the fund manager *expects* it to cover *all* of their operational costs. It's not some sort of slider that they move around with their costs. I'm not familiar with any ETF providers doing agreements which cover rent and equipment (hedge funds do - see \"\"hedge fund hotels\"\"). ETF providers do routinely enter into agreements with larger institutions that cover stuff like marketing. PowerShares, for a while, outsourced all of the management of the Qs to BNY and was responsible solely for marketing it themselves.\"",
"title": ""
},
{
"docid": "3be2b64b0a6817534c811ba341dbca23",
"text": "I'm not exactly sure, but it may be due to liquidity preference. SPY has a much higher volume (30d average of roughly 70m vs. 3.3m, 1.9m for IVV, VOO respectively), and similarly has a narrow bid ask spread of about 0.01 compared to 0.02 for the other two. I could be wrong, but I'm going to leave this post up and look in to it later, I'm curious too. The difference is very consistent though, so it may be something in their methodology.",
"title": ""
},
{
"docid": "9ec10b3f7e1202acfe037a2259d8ce4d",
"text": "\"Mathematically it's arbitrary - you could just as easily use the bid or the midpoint as the denominator, so long as you're consistent when comparing securities. So there's not a fundamental reason to use the ask. The best argument I can come up with is that most analysis is done from the buy side, so looking at liquidity costs (meaning how much does the value drop instantaneously purely because of the bid-ask spread) when you buy a security would be more relevant by using the ask (purchase price) as the basis. Meaning, if a stock has a bid-ask range of $95-$100, if you buy the stock at $100 (the ask), you immediately \"\"lose\"\" 5% (5/100) of its value since you can only sell it for $95.\"",
"title": ""
},
{
"docid": "d65931bcdd9257af1f8355851a61b1f3",
"text": "A day is a long time and the rate is not the same all day. Some sources will report a close price that averages the bid and ask. Some sources will report a volume-weighted average. Some will report the last transaction price. Some will report a time-weighted average. Some will average the highest and lowest prices for the interval. Different marketplaces will also have slightly different prices because different traders are present at each marketplace. Usually, the documentation will explain what method they use and you can choose the source whose method makes the most sense for your application.",
"title": ""
},
{
"docid": "1fec42beb84e2821dd90cd035446ea8d",
"text": "Something like cost = a × avg_spreadb + c × volatilityd × (order_size/avg_volume)e. Different brokers have different formulas, and different trading patterns will have different coefficients.",
"title": ""
},
{
"docid": "7ccebb6bcea7089d89b1fd72e66e3b81",
"text": "Thank you for replying. I'm not sure I totally follow though, aren't you totally at mercy of the liquidity in the stock? I guess I'm havinga hard time visualizing the value a human can add as opposed to say vwapping it or something. I can accept that you're right, just having a difficult time picturing it",
"title": ""
}
] |
fiqa
|
74c8f356341aad2e2729a19aaa290cba
|
What to do with south african currency free fall
|
[
{
"docid": "c4928107daac55e5455a1f8a674e89ce",
"text": "Use other currencies, if available. I'm not familiar with the banking system in South Africa; if they haven't placed any currency freezes or restrictions, you might want to do this sooner than later. In full crises, like Russian and Ukraine, once the crisis worsened, they started limiting purchases of foreign currencies. PayPal might allow currency swaps (it implies that it does at the bottom of this page); if not, I know Uphold does. Short the currency Brokerage in the US allow us to short the US Dollar. If banks allow you to short the ZAR, you can always use that for protection. I looked at the interest rates in the ZAR to see how the central bank is offsetting this currency crisis - WOW - I'd be running, not walking toward the nearest exit. A USA analogy during the late 70s/early 80s would be Paul Volcker holding interest rates at 2.5%, thinking that would contain 10% inflation. Bitcoin Comes with significant risks itself, but if you use it as a temporary medium of exchange for swaps - like Uphold or with some bitcoin exchanges like BTC-e - you can get other currencies by converting to bitcoin then swapping for other assets. Bitcoin's strength is remitting and swapping; holding on to it is high risk. Commodities I think these are higher risk right now as part of the ZAR's problem is that it's heavily reliant on commodities. I looked at your stock market to see how well it's done, and I also see that it's done poorly too and I think the commodity bloodbath has something to do with that. If you know of any commodity that can stay stable during uncertainty, like food that doesn't expire, you can at least buy without worrying about costs rising in the future. I always joke that if hyperinflation happened in the United States, everyone would wish they lived in Utah.",
"title": ""
},
{
"docid": "1724c351ce737d25fe94caa86ed5cfe1",
"text": "Transfer your savings to a dollar-based CD. Or even better, buy some gold on them.",
"title": ""
}
] |
[
{
"docid": "647740b4ae71f5a6f13b36593cb3f041",
"text": "The default of the country will affect the country obligations and what's tied to it. If you have treasury bonds, for example - they'll get hit. If you have cash currency - it will get hit. If you're invested in the stock market, however, it may plunge, but will recover, and in the long run you won't get hit. If you're invested in foreign countries (through foreign currency or foreign stocks that you hold), then the default of your local government may have less affect there, if at all. What you should not, in my humble opinion, be doing is digging holes in the ground or probably not exchange all your cash for gold (although it is considered a safe anchor in case of monetary crisis, so may be worth considering some diversifying your portfolio with some gold). Splitting between banks might not make any difference at all because the value won't change, unless you think that one of the banks will fail (then just close the account there). The bottom line is that the key is diversifying, and you don't have to be a seasoned investor for that. I'm sure there are mutual funds in Greece, just pick several different funds (from several different companies) that provide diversified investment, and put your money there.",
"title": ""
},
{
"docid": "4d0c682843b282a6198ecc012f163746",
"text": "This. Why not convert the 50k euro to dollars and AUD, and invest in a basket of companies that trade on American/Australian exchanges instead. You could hold a bit of gold, but I would definitely not put everything into gold.",
"title": ""
},
{
"docid": "b7228ac919920c2b403555de25be31a4",
"text": "If you are really worried your best bet is to move all your cash from Sterling into a foreign currency that you think will be resilient should Brexit occur. I would avoid the Euro! You could look at the US Dollar perhaps, make sure you are aware of the charges for moving the money over and back again, as you will at some stage probably want to get back into Sterling once it settles down, if it does indeed fall. Based on my experience on the stock markets (I am not a currency trader) I would expect the pound to fall fairly sharply on a vote for Brexit and the Euro to do the same. Both would probably rebound quite quickly too as even if there is a Brexit vote it doesn't mean the UK Government will honour the outcome or take the steps quickly. ** I AM NOT A FINANCIAL ADVISOR AND HAVE NO QUALIFICATIONS AS SUCH **",
"title": ""
},
{
"docid": "3f7751528f0ca251b5245b7b1ff8442f",
"text": "\"I'm assuming the central bank of Italy will initiate quantitative easing (print money) to pay for this. This should devalue the euro. This may be \"\"rescuing\"\" these banks but it's fucking over everyone who is saving/trading with the euro.\"",
"title": ""
},
{
"docid": "0afc4be53a7d5723c723f6f6974db822",
"text": "\"The biggest risk you have when a country defaults on its currency is a major devaluation of the currency. Since the EURO is a fiat currency, like almost all developed nations, its \"\"promise\"\" comes from the expectation that its union and system will endure. The EURO is a basket of countries and as such could probably handle bailing out countries or possibly letting some default on their sovereign debt without killing the EURO itself. A similar reality happens in the United States with some level of regularity with state and municipal debt being considered riskier than Federal debt (it isn't uncommon for cities to default). The biggest reason the EURO will probably lose a LOT of value initially is if any nation defaults there isn't a track record as to how the EU member body will respond. Will some countries attempt to break out of the EU? If the member countries fracture then the EURO collapses rendering any and all EURO notes useless. It is that political stability that underlies the value of the EURO. If you are seriously concerned about the risk of a falling EURO and its long term stability then you'd do best buying a hedge currency or devising a basket of hedge currencies to diversify risk. Many will recommend you buy Gold or other precious metals, but I think the idea is silly at best. It is not only hard to buy precious metals at a \"\"fair\"\" value it is even harder to sell them at a fair value. Whatever currency you hold needs to be able to be used in transactions with ease. Doesn't do you any good having $20K in gold coins and no one willing to buy them (as the seller at the store will usually want currency and not gold coins). If you want to go the easy route you can follow the same line of reasoning Central Banks do. Buy USD and hold it. It is probably the world's safest currency to hold over a long period of time. Current US policy is inflationary so that won't help you gain value, but that depends on how the EU responds to a sovereign debt crisis; if one matures.\"",
"title": ""
},
{
"docid": "cef4fa3efefe86f85f703ff4e020704f",
"text": "\"If there is a very sudden and large collapse in the exchange rate then because algorithmic trades will operate very fast it is possible to determine “x” immediately after the change in exchange rate. All you need to know is the order book. You also need to assume that the algorithmic bot operates faster than all other market participants so that the order book doesn’t change except for those trades executed by the bot. The temporarily cheaper price in the weakened currency market will rise and the temporarily dearer price in the strengthened currency market will fall until the prices are related by the new exchange rate. This price is determined by the condition that the total volume of buys in the cheaper market is equal to the total volume of sells in the dearer market. Suppose initially gold is worth $1200 on NYSE or £720 on LSE. Then suppose the exchange rate falls from r=0.6 £/$ to s=0.4 £/$. To illustrate the answer lets assume that before the currency collapse the order book for gold on the LSE and NYSE looks like: GOLD-NYSE Sell (100 @ $1310) Sell (100 @ $1300) <——— Sell (100 @ $1280) Sell (200 @ $1260) Sell (300 @ $1220) Sell (100 @ $1200) ————————— buy (100 @ $1190) buy (100 @ $1180) GOLD-LSE Sell (100 @ £750) Sell (100 @ £740) ————————— buy (200 @ £720) buy (200 @ £700) buy (100 @ £600) buy (100 @ £550) buy (100 @ £530) buy (100 @ £520) <——— buy (100 @ £500) From this hypothetical example, the automatic traders will buy up the NYSE gold and sell the LSE gold in equal volume until the price ratio \"\"s\"\" is attained. By summing up the sell volumes on the NYSE and the buy volumes on the LSE, we see that the conditions are met when the price is $1300 and £520. Note 800 units were bought and sold. So “x” depends on the available orders in the order book. Immediately after this, however, the price of the asset will be subject to the new changes of preference by the market participants. However, the price calculated above must be the initial price, since otherwise an arbitrage opportunity would exist.\"",
"title": ""
},
{
"docid": "998e630126f66709e84a3de6ba91fdda",
"text": "If any Euro countries leave the Euro, they will have to impose capital flow restrictions - it's a given, to avoid a complete implosion of the entire system. The idea of retroactive controls is very interesting - this may be one of the first times in a currency collapse that such a system would be feasible (i.e., both the country being fled from and the countries being fled to are under common control). No doubt they would try such a thing if they thought they could get away with it.",
"title": ""
},
{
"docid": "041245ddb1f9ce5576e6d63afde087e8",
"text": "\"The danger to your savings depends on how much sovereign debt your bank is holding. If the government defaults then the bank - if it is holding a lot of sovereign debt - could be short funds and not able to meet its obligations. I believe default is the best option for the Euro long term but it will be painful in the short term. Yes, historically governments have shut down banks to prevent people from withdrawing their money in times of crisis. See Argentina circa 2001 or US during Great Depression. The government prevented people from withdrawing their money and people could do nothing while their money rapidly lost value. (See the emergency banking act where Title I, Section 4 authorizes the US president:\"\"To make it illegal for a bank to do business during a national emergency (per section 2) without the approval of the President.\"\" FDR declared a banking holiday four days before the act was approved by Congress. This documentary on the crisis in Argentina follows a woman as she tries to withdraw her savings from her bank but the government has prevented her from withdrawing her money.) If the printing press is chosen to avoid default then this will allow banks and governments to meet their obligations. This, however, comes at the cost of a seriously debased euro (i.e. higher prices). The euro could then soon become a hot potato as everyone tries to get rid of them before the ECB prints more. The US dollar could meet the same fate. What can you do to avert these risks? Yes, you could exchange into another currency. Unfortunately the printing presses of most of the major central banks today are in overdrive. This may preserve your savings temporarily. I would purchase some gold or silver coins and keep them in your possession. This isolates you from the banking system and gold and silver have value anywhere you go. The coins are also portable in case things really start to get interesting. Attempt to purchase the coins with cash so there is no record of the purchase. This may not be possible.\"",
"title": ""
},
{
"docid": "2a4101d422ea1202cbc43ffd2a8abbf0",
"text": "Are you going to South Africa or from? (Looking on your profile for this info.) If you're going to South Africa, you could do worse than to buy five or six one-ounce krugerrands. Maybe wait until next year to buy a few; you may get a slightly better deal. Not only is it gold, it's minted by that country, so it's easier to liquidate should you need to. Plus, they go for a smaller premium in the US than some other forms of gold. As for the rest of the $100k, I don't know ... either park it in CD ladders or put it in something that benefits if the economy gets worse. (Cheery, ain't I? ;) )",
"title": ""
},
{
"docid": "991a3c3f2d868d20ef41153c719b87fe",
"text": "Recessions are prolonged by less spending and wages being 'sticky' downward. My currency, the 'wallark', allows a company to pay its workers in it's own scrip instead of dollars which they can use to purchase its goods, thus reducing it's labor costs and allowing prices to fall faster. While scrip in the past purposely devalued to discourage hoarding, the wallark hold's it's purchasing power. The difference is, a worker can only use it to purchase their company's good *on the date the wallark was earned or before*. In other words, each good is labeled with a date it was put on display for sale, if a worker earns scrip on that same day, they can trade the scrip for that good, or any good that was on the shelves on that day it was earned *or before that date*. Any good that comes onto market after the date that particular wallark was earned cannot be purchased with that wallark(which is dated), and must be purchased either with dollars or with wallark that was earned on that good's date or after. This incentivizes spending without creating inflation, and allows costs to fall which helps businesses during rough economic times. Please feel free to read it, and comment on my site! Any feedback is welcome!",
"title": ""
},
{
"docid": "b599fa547d14e731b3f8685f44242823",
"text": "of course the value will be non zero however it would be very small, as all the countries would not leave at once... if its a piig holding the bag it would fall precipitously, if its a AAA (non france) it would go to 1.5 Its very path dependent on whom leaves when",
"title": ""
},
{
"docid": "6bd58cfcf59df1678bf6560942b4d86c",
"text": "No, there is nothing on the sidelines. Currency is an investment. There is no such thing as uninvested wealth. If you had a million in USD at the beginning of 2017, you would currently be out about sixty grand. There is no neutral way to store wealth.",
"title": ""
},
{
"docid": "f223389ac294be1c02dff830429e81dd",
"text": "First question: Any, probably all, of the above. Second question: The risk is that the currency will become worth less, or even worthless. Most will resort to the printing press (inflation) which will tank the currency's purchasing power. A different currency will have the same problem, but possibly less so than yours. Real estate is a good deal. So are eggs, if you were to ask a Weimar Germany farmer. People will always need food and shelter.",
"title": ""
},
{
"docid": "d2323f60dcf6807c1151a04b0999014a",
"text": "\"You can place the orders like you suggested. This would be useful in a market that is moving quickly where you want to be reasonably sure of execution but don't want the full exposure of a market order. This won't jump your spot in the queue though in the sense that you won't get ahead of other orders that are \"\"ready\"\" for execution just because you have crossed the spread aggressively.\"",
"title": ""
},
{
"docid": "e2cb477959dec39a9ffffc1413e15915",
"text": "The monetary supply isn't a fixed number like in the old days of the [gold standard](https://en.wikipedia.org/wiki/Gold_standard) is part of the answer. Also, the actual spending of that one thousand dollars -- where the money is spent and on what -- does make a significant difference on how the overall economy is effected: People spending it on food, transportation and housing isn't going to drive up the costs of a Porshe 911.",
"title": ""
}
] |
fiqa
|
1014bb04ba0ea7e98ea702d708243f69
|
Over how much time should I dollar-cost-average my bonus from cash into mutual funds?
|
[
{
"docid": "7e77bf16ae5bcbd90ff513efa7ea6c97",
"text": "The OP invests a large amount of money each year (30-40k), and has significant amount already invested. Some in the United States that face this situation may want to look at using the bonus to fund two years worth of IRA or Roth IRA. During the period between January 1st and tax day they can put money into a IRA or Roth IRA for the previous year, and for the current year. The two deposits might have to be made separately, because the tax year for each deposit must be specified. If the individual is married, they can also fund their spouses IRA or Roth IRA. If this bonus is this large every year, the double deposit can only be done the first time, but if the windfall was unexpected getting the previous years deposit done before tax day could be useful. The deposits for the current year could still be spread out over the next 12 months. EDIT: Having thought about the issue a little more I have realized there are other timing issues that need to be considered.",
"title": ""
},
{
"docid": "a5797d874e38e3192b00a936376f037f",
"text": "There have been studies which show that Dollar Cost Averaging (DCA) underperforms Lump Sum Investing (LSI). Vanguard, in particular, has published one such study. Of course, reading about advice in a study is one thing; acting on that advice can be something else entirely. We rolled over my wife's 401(k) to an IRA back in early 2007 and just did it as a lump sum. You know what happened after that. But our horizon was 25+ years at that time, so we didn't lose too much sleep over it (we haven't sold or gone to cash, either).",
"title": ""
},
{
"docid": "780c6434ce04ec3703731bc11fc10e7d",
"text": "I'm staring at this chart and asking myself, How long a period is enough to have an average I'd be happy with regardless of the direction the market goes? 3 years? 4 years? Clearly, a lump sum investment risks a 2000 buy at 1500. Not good. Honestly, I love the question, and find it interesting, but there's likely no exact answer, just some back and forth analysis. You're investing about $40K/yr anyway. I'd suggest a 4 year timeframe is a good time to invest the new money as well. Other folk want to offer opinions? Edit - with the OP's additional info, he expects these bonuses to continue, my updated advice is to DCA quarterly if going into assets with a transaction fee or monthly if into a no-fee fund, over just a one year period.",
"title": ""
},
{
"docid": "eca7b08aae740dccd9c59d0ec0679496",
"text": "Canadian Couch Potato has an article which is somewhat related. Ask the Spud: Can You Time the Markets? The argument roughly boils down to the following: That said, I didn't follow the advice. I inherited a sum of money, more than I had dealt with before, and I did not feel I was emotionally capable of immediately dumping it into my portfolio (Canadian stocks, US stocks, world stocks, Canadian bonds, all passive indexed mutual funds), and so I decided to add the money into my portfolio over the course of a year, twice a month. The money that I had not yet invested, I put into a money market account. That worked for me because I was purchasing mutual funds with no transaction costs. If you are buying ETFs, this strategy makes less sense. In hindsight, this was not financially prudent; I'd have been financially better off to buy all the mutual funds right at the beginning. But I was satisfied with the tradeoff, knowing that I did not have hindsight and I would have been emotionally hurt had the stock market crashed. There must be research that would prove, based on past performance, the statistically optimal time frame for dollar-cost averaging. However, I strongly suppose that the time frame is rather small, and so I would advise that you either invest the money immediately, or dollar-cost average your investment over the course of the year. This answer is not an ideal answer to your question because it is lacking such a citation.",
"title": ""
}
] |
[
{
"docid": "4a19eb29e6bbded4886ff2d5b424e236",
"text": "\"I have been considering a similar situation for a while now, and the advice i have been given is to use a concept called \"\"dollar cost averaging\"\", which basically amounts to investing say 10% a month over 10 months, resulting in your investment getting the average price over that period. So basically, option 3.\"",
"title": ""
},
{
"docid": "65f01efd7b05088c5b84148dd818e886",
"text": "Expenses matter. At the back end, retirement, the most often quoted withdrawal rate is 4%. How would it feel to be paying 1/4 of each years' income to fees, separate from the taxes due, separate from whether the market is up or down? Kudos to you for learning this lesson so early. Your plan is great, and while I often say 'don't let the tax tail wag the investing dog' being mindful of the tax hit in any planned transaction is worthwhile. Selling and moving enough funds to stay at 0% is great, a no-brainer, as they say. Selling more depends on the exact numbers involved. Do a fake return, and see how an extra $1000/$2000 etc, worth of fund sale impacts the taxes. It will depend on how much gain there is for each $XXX of fund. Say you are up 25%, So $1000 has $200 of gain. 15% of $200 is $30. A 1%/yr fee cost you $10/yr, so it's worth waiting till January to sell the next shares of the fund. Keep in mind, the 'test' return will still have the 2013 rates and brackets, I suggest this only as an estimating tool.",
"title": ""
},
{
"docid": "1c8bbe9235409f5c606a86859895a345",
"text": "That depends whether you're betting on the market going up, or down, during the year. If you don't like to bet (and I don't), you can take advantage of dollar cost averaging by splitting it up into smaller contributions throughout the year.",
"title": ""
},
{
"docid": "818f4cb44f509dfe75279353ce92a310",
"text": "In general, lump sum investing will tend to outperform dollar cost averaging because markets tend to increase in value, so investing more money earlier will generally be a better strategy. The advantage of dollar cost averaging is that it protects you in times when markets are overvalued, or prior to market corrections. As an extreme example, if you done a lump-sum investment in late 2008 and then suffered through the subsequent market crash, it may have taken you 2-3 years to get back to even. If you began a dollar cost averaging investment plan in late 2008, it may have only taken you a 6 months to get back to even. Dollar cost averaging can also help to reduce the urge to time the market, which for most investors is definitely a good thing.",
"title": ""
},
{
"docid": "ce6d317e89ec1170e735acd3e5886923",
"text": "\"Personally, I think you are approaching this from the wrong angle. You're somewhat correct in assuming that what you're reading is usually some kind of marketing material. Systematic Investment Plan (SIP) is not a universal piece of jargon in the financial world. Dollar cost averaging is a pretty universal piece of jargon in the financial world and is a common topic taught in finance classes in the US. On average, verified by many studies, individuals will generate better investment returns when they proactively avoid timing the market or attempting to pick specific winners. Say you decide to invest in a mutual fund, dollar cost averaging means you invest the same dollar amount in consistent intervals rather than buying a number of shares or buying sporadically when you feel the market is low. As an example I'll compare investing $50 per week on Wednesdays, versus 1 share per week on Wednesdays, or the full $850 on the first Wednesday. I'll use the Vanguard Large cap fund as an example (VLCAX). I realize this is not really an apples to apples comparison as the invested amounts are different, I just wanted to show how your rate of return can change depending on how your money goes in to the market even if the difference is subtle. By investing a common dollar amount rather than a common share amount you ultimately maintain a lower average share price while the share price climbs. It also keeps your investment easy to budget. Vanguard published an excellent paper discussing dollar cost averaging versus lump sum investing which concluded that you should invest as soon as you have funds, rather than parsing out a lump sum in to smaller periodic investments, which is illustrated in the third column above; and obviously worked out well as the market has been increasing. Ultimately, all of these companies are vying to customers so they all have marketing teams trying to figure out how to make their services sound interesting and unique. If they all called dollar cost averaging, \"\"dollar cost averaging\"\" none of them would appear to be unique. So they devise neat acronyms but it's all pretty much the same idea. Trickle your money in to your investments as the money becomes available to you.\"",
"title": ""
},
{
"docid": "b9d819ec9577a248f9bd639cd5dfe85e",
"text": "\"How often should one use dollar-cost averaging? Trivially, a dollar cost averaging (DCA) strategy must be used at least twice! More seriously, DCA is a discipline that people (typically investors with relatively small amounts of money to invest each month or each quarter) use to avoid succumbing to the temptation to \"\"time the market\"\". As mhoran_psprep points out, it is well-suited to 401k plans and the like (e.g. 403b plans for educational and non-profit institutions, 457 plans for State employees, etc), and indeed is actually the default option in such plans, since a fixed amount of money gets invested each week, or every two weeks, or every month depending on the payroll schedule. Many plans offer just a few mutual funds in which to invest, though far too many people, having little knowledge or understanding of investments, simply opt for the money-market fund or guaranteed annuity fund in their 4xx plans. In any case, all your money goes to work immediately since all mutual funds let you invest in thousandths of a share. Some 401k/403b/457 plans allow investments in stocks through a brokerage, but I think that using DCA to buy individual stocks in a retirement plan is not a good idea at all. The reasons for this are that not only must shares must be bought in whole numbers (integers) but it is generally cheaper to buy stocks in round lots of 100 (or multiples of 100) shares rather than in odd lots of, say, 37 shares. So buying stocks weekly, or biweekly or monthly in a 401k plan means paying more or having the money sit idle until enough is accumulated to buy 100 shares of a stock at which point the brokerage executes the order to buy the stock; and this is really not DCA at all. Worse yet, if you let the money accumulate but you are the one calling the shots \"\"Buy 100 shares of APPL today\"\" instead of letting the brokerage execute the order when there is enough money, you are likely to be timing the market instead of doing DCA. So, are brokerages useless in retirement fund accounts? No, they can be useful but they are not suitable for DCA strategies involving buying stocks. Stick to mutual funds for DCA. Do people use it across the board on all stock investments? As indicated above, using DCA to buy individual stocks is not the best idea, regardless of whether it is done inside a retirement plan or outside. DCA outside a retirement plan works best if you not trust yourself to stick with the strategy (\"\"Ooops, I forgot to mail the check yesterday; oh, well, I will do it next week\"\") but rather, arrange for your mutual fund company to take the money out of your checking account each week/month/quarter etc, and invest it in whatever fund(s) you have chosen. Most companies have such programs under names such as Automatic Investment Program (AIP) etc. Why not have your bank send the money to the mutual fund company instead? Well, that works too, but my bank charges me for sending the money whereas my mutual fund company does AIP for free. But YMMV. Dollar-cost averaging generally means investing a fixed amount of money on a periodic basis. An alternative strategy, if one has decided that owning 1200 shares of FlyByKnight Co is a good investment to have, is to buy round lots of 100 shares of FBKCO each month. The amount of money invested each month varies, but at the end of the year, the average cost of the 1200 shares is the average of the prices on the 12 days on which the investments were made. Of course, by the end of the year, you might not think FBKCO is worth holding any more. This technique worked best in the \"\"good old days\"\" when blue-chip stocks paid what was for all practical purposes a guaranteed dividend each year, and people bought these stocks with the intention of passing them on to their widows and children.\"",
"title": ""
},
{
"docid": "1e49d2b2c9c88cf6090f1836b3968990",
"text": "Theoretically there is always a time value of money. You'll need to keep your cash in a Money Market Fund to realize its potential (I'm not saying MMFs are the best investment strategy, they are the best kind of account for liquid cash). Choose an accounts that's flexible with regard to its minimum required so you can always keep this extra money in it and remove it when you need to make a payment.",
"title": ""
},
{
"docid": "eef9aedb0ad4b895b7f771712e625179",
"text": "If you are making regular periodic investments (e.g. each pay period into a 401(k) plan) or via automatic investment scheme in a non-tax-deferred portfolio (e.g. every month, $200 goes automatically from your checking account to your broker or mutual fund house), then one way of rebalancing (over a period of time) is to direct your investment differently into the various accounts you have, with more going into the pile that needs bringing up, and less into the pile that is too high. That way, you can avoid capital gains or losses etc in doing the selling-off of assets. You do, of course, take longer to achieve the balance that you seek, but you do get some of the benefits of dollar-cost averaging.",
"title": ""
},
{
"docid": "364ef9c8cb65d47d63f4f94816cb29d7",
"text": "There are a number of scholarly articles on the subject including a number at the end of the Vanguard article you reference. However, unfortunately like much of financial research you can't look at the articles without paying quite a bit. It is not easy to make a generic comparison between lump-sum and dollar cost averaging because there are many ways to do dollar cost averaging. How long do you average over? Do you evenly average or exponentially put the money to work? The easiest way to think about this problem though is does the extra compounding from investing more of the money immediately outweigh the chance that you may have invested all the money when the market is overvalued. Since the market is usually near the correct value investing in lump sum will usually win out as the Vanguard article suggests. As a side note, while using DCA on a large one time sum of money is generally not optimal, if you have a consistent salary DCA by frequently investing a portion of your salary has been frequently shown to be a very good idea of long periods over saving up a bunch of money and investing it all at once. In this case you get the compounding advantage of investing early and you avoid investing a large chunk of money when the market is overvalued.",
"title": ""
},
{
"docid": "5790337078c1c0fd24948a1f5458e974",
"text": "Your idea is a good one, but, as usual, the devil is in the details, and implementation might not be as easy as you think. The comments on the question have pointed out your Steps 2 and 4 are not necessarily the best way of doing things, and that perhaps keeping the principal amount invested in the same fund instead of taking it all out and re-investing it in a similar, but different, fund might be better. The other points for you to consider are as follows. How do you identify which of the thousands of conventional mutual funds and ETFs is the average-risk / high-gain mutual fund into which you will place your initial investment? Broadly speaking, most actively managed mutual fund with average risk are likely to give you less-than-average gains over long periods of time. The unfortunate truth, to which many pay only Lipper service, is that X% of actively managed mutual funds in a specific category failed to beat the average gain of all funds in that category, or the corresponding index, e.g. S&P 500 Index for large-stock mutual funds, over the past N years, where X is generally between 70 and 100, and N is 5, 10, 15 etc. Indeed, one of the arguments in favor of investing in a very low-cost index fund is that you are effectively guaranteed the average gain (or loss :-(, don't forget the possibility of loss). This, of course, is also the argument used against investing in index funds. Why invest in boring index funds and settle for average gains (at essentially no risk of not getting the average performance: average performance is close to guaranteed) when you can get much more out of your investments by investing in a fund that is among the (100-X)% funds that had better than average returns? The difficulty is that which funds are X-rated and which non-X-rated (i.e. rated G = good or PG = pretty good), is known only in hindsight whereas what you need is foresight. As everyone will tell you, past performance does not guarantee future results. As someone (John Bogle?) said, when you invest in a mutual fund, you are in the position of a rower in rowboat: you can see where you have been but not where you are going. In summary, implementation of your strategy needs a good crystal ball to look into the future. There is no such things as a guaranteed bond fund. They also have risks though not necessarily the same as in a stock mutual fund. You need to have a Plan B in mind in case your chosen mutual fund takes a longer time than expected to return the 10% gain that you want to use to trigger profit-taking and investment of the gain into a low-risk bond fund, and also maybe a Plan C in case the vagaries of the market cause your chosen mutual fund to have negative return for some time. What is the exit strategy?",
"title": ""
},
{
"docid": "5b67fa3ebd9f9eff76ad19f0552d7686",
"text": "Dollar cost averaging moderates risk. But you pay for this by giving up the chance for higher gains. If you took a hundred people and randomly had them fully buy into the market over a decade period, some of those people will do very well (relative to the rest) while others will do very poorly (relatively). If you dollar cost average, your performance would fall into the middle so you don't fall into the bottom (but you won't fall into the top either).",
"title": ""
},
{
"docid": "16a25ba54cca763a15a0b7ac4bcde9de",
"text": "The time horizon for your 401K/IRA is essentially the same, and it doesn't stop at the day you retire. On the day you do the rollover you will be transferring your funds into similar investments. S&P500 index to S&P 500 index; 20xx retirement date to 20xx retirement date; small cap to small cap... If your vested portion is worth X $'s when the funds are sold, that is the amount that will be transferred to the IRA custodian or the custodian for the new employer. Use the transfer to make any rebalancing adjustments that you want to make. But with as much as a year before you leave the company if you need to rebalance now, then do that irrespective of your leaving. Cash is what is transferred, not the individual stock or mutual fund shares. Only move your funds into a money market account with your current 401K if that makes the most sense for your retirement plan. Also keep in mind unless the amount in the 401K is very small you don't have to do this on your last day of work. Even if you are putting the funds in a IRA wait until you have started with the new company and so can define all your buckets based on the options in the new company.",
"title": ""
},
{
"docid": "d3741d5862564553029f431e8570eb66",
"text": "\"The mutual fund is legally its own company that you're investing in, with its own expenses. Mutual fund expense ratios are a calculated value, not a promise that you'll pay a certain percentage on a particular day. That is to say, at the end of their fiscal year, a fund will total up how much it spent on administration and divide it by the total assets under management to calculate what the expense ratio is for that year, and publish it in the annual report. But you can't just \"\"pay the fee\"\" for any given year. In a \"\"regular\"\" account, you certainly could look at what expenses were paid for each fund by multiplying the expense ratio by your investment, and use it in some way to figure out how much additional you want to contribute to \"\"make it whole\"\" again. But it makes about as much sense as trying to pay the commission for buying a single stock out of one checking account while paying for the share price out of another. It may help you in some sort of mental accounting of expenses, but since it's all your money, and the expenses are all part of what you're paying to be able to invest, it's not really doing much good since money is fungible. In a retirement account with contribution limits, it still doesn't really make sense, since any contribution from outside funds to try to pay for expense ratios would be counted as contributions like any other. Again, I guess it could somehow help you account for how much money you wanted to contribute in a year, but I'm not really sure it would help you much. Some funds or brokerages do have non-expense-ratio-based fees, and in some cases you can pay for those from outside the account. And there are a couple cases where for a retirement account this lets you keep your contributions invested while paying for fees from outside funds. This may be the kind of thing that your coworker was referring to, though it's hard to tell exactly from your description. Usually it's best just to have investments with as low fees as possible regardless, since they're one of the biggest drags on returns, and I'd be very wary of any brokerage-based fees when there are very cheap and free mutual fund brokerages out there.\"",
"title": ""
},
{
"docid": "993793d6dcee694fa8034a12ea35d61e",
"text": "Can you isolate the market impact to just the Fed's quantitative easing? Can you rule out the future economic predictions of low growth and that there are reasons why the Fed has kept rates low and is trying its best to stimulate the economy? Just something to consider here. The key is to understand what is the greater picture here as well as the question of which stock market index are you looking at that has done so badly. Some stocks may be down and others may be up so it isn't necessarily bad for all equally.",
"title": ""
},
{
"docid": "e2f9b8faa0d16414f9b1f39f9b0199f3",
"text": "I think it depends on who is being paid for your app. Do you have a company the is being paid? Or is it you personally? If you have a company then that income will disappear by offsetting it through expenses to get the software developed. If they are paying you personally then you can probably still get the income to disappear by file home-office expenses. I think either way you need to talk to an accountant. If you don't want to mess with it since the amount of income is small then I would think you can file it as additional income (maybe a 1099).",
"title": ""
}
] |
fiqa
|
2a6110abe228c99a1a8d170d9968f70d
|
401K - shift from agressive investment to Money Market
|
[
{
"docid": "cab8a85705f3c03341cab69c7efa553e",
"text": "If you look at history, it shows that the more people predict corrections the less was the chance they came. That doesn't prove it stays so, though. 2017 is not any different than other years in the future: Independent of this, with less than ten years remaining until you need to draw from your money, it is a good idea to move away from high risk (and high gain); you will not have enough time to recover if it goes awry. There are different approaches, but you should slowly and continuously migrate your capital to less risky investments. Pick some good days and move 10% or 20% each time to low-risk, so that towards the end of the remaining time 90 or 100% are low or zero risk investments. Many investment banks and retirement funds offer dedicated funds for that, they are called 'Retirement 2020' or 'Retirement 2030'; they do exactly this 'slow and continuous moving over' for you; just pick the right one.",
"title": ""
},
{
"docid": "9eae44ce91777c17256c0057db70d077",
"text": "I can understand your fears, and there is nothing wrong with taking action to protect yourself from them. How much income do you need in retirement? For arguments sake, lets say you need to pull 36K per year from your 401K or 3K per month. Lets also assume that you current contribute (with any match) 1,000 per month. Please adjust to your actual numbers accordingly. One option would be to pull out 48K right now and put it in a money market. With your contributions, I would then put half into the money market and half into more aggressive investments. In 10 years, you would have about 110K in your money market account. You could live off of that for three years. If the market does crash, this should give you plenty of time to recover. Taking this option opens you to another risk, which is being beat up by inflation or lack of growth on a nice pile of cash. My time frame is not that different then yours (I am about 12 years away), but am still all in stocks. Having 48K and more with not opportunity for growth frightens me more than any temporary stock market crash. Having said that I think it would be a horrible mistake to get completely out of stocks. Many of those destroyed in 2008 also missed 2012 through 2014 which were awesome years. So do some. Set aside a year or three of income in something nice and safe. Maybe one year of income in money market, one in bonds and preferred stocks, and one in blue chips.",
"title": ""
}
] |
[
{
"docid": "bfddda9422024219f006578082293267",
"text": "\"the most important information that you provided was \"\"I'm 25 years old\"\". You have a few years to save for a rental property. Taking a loan against your 401k only invites a lot of paperwork and a good deal of risk. Not only the \"\"if I lose my job I have to pay it back (in 60 days)\"\", but it effectively locks you into your current job because changing jobs also causes the same repayment consequences. Do you really love your job that much that you would stick with it for the loan you have? (rhetorical) One could argue that real estate is a good way to diversify away from the stock market (assuming you have your 401k invested in stocks). Another way to get the same diversification is to invest in REITs through your 401k. Owning rental property isn't something to rush into. You really have to like it.The returns and headaches that accompany it can be a drag and it's harder to get out of then stocks.\"",
"title": ""
},
{
"docid": "aed6c8a2de8cc877cb499bc37e5253b8",
"text": "\"This is basically the short-term/long-term savings question in another form: savings that you hope are long-term but which may turn short-term very suddenly. You can never completely eliminate the risk of being forced to draw on long term savings during a period when the market is doing Something Unpleasant that would force you to take a loss (or right before it does Something Pleasant that you'd like to be fully invested during). You can only pick the degree of risk that you're willing to accept, balancing that hazard of forced sales against the lower-but-more-certain returns you'd get from a money market or equivalent. I'm considered a moderately aggressive investor -- which doesn't mean I'm pushing the boundaries on what I'm buying (not by a long shot!), but which does mean I'm willing to keep more of my money in the market and I'm more likely to hold or buy into a dip than to sell off to try to minimize losses. That level of risk-tolerance also means I'm willing to maintain a ready-cash pool which is sufficient to handle expected emergencies (order of $10K), and not become overly paranoid about lost opportunity value if it turns out that I need to pull a few thou out of the investments. I've got decent health insurance, which helps reduce that risk. I'm also not particularly paranoid about the money. On my current track, I should be able to maintain my current lifestyle \"\"forever\"\" without ever touching the principal, as long as inflation and returns remain vaguely reasonable. Having to hit the account for a larger emergency at an Inconvenient Time wouldn't be likely to hurt me too much -- delaying retirement for a year or two, perhaps. It's just money. Emergencies are one of the things it's for. I try not to be stupid about it, but I also try not to stress about it more than I must.\"",
"title": ""
},
{
"docid": "eef9aedb0ad4b895b7f771712e625179",
"text": "If you are making regular periodic investments (e.g. each pay period into a 401(k) plan) or via automatic investment scheme in a non-tax-deferred portfolio (e.g. every month, $200 goes automatically from your checking account to your broker or mutual fund house), then one way of rebalancing (over a period of time) is to direct your investment differently into the various accounts you have, with more going into the pile that needs bringing up, and less into the pile that is too high. That way, you can avoid capital gains or losses etc in doing the selling-off of assets. You do, of course, take longer to achieve the balance that you seek, but you do get some of the benefits of dollar-cost averaging.",
"title": ""
},
{
"docid": "4c00e188521bb82ead41c19c72e51825",
"text": "\"Aggressiveness in a retirement portfolio is usually a function of your age and your risk tolerance. Your portfolio is usually a mix of the following asset classes: You can break down these asset classes further, but each one is a topic unto itself. If you are young, you want to invest in things that have a higher return, but are more volatile, because market fluctuations (like the current financial meltdown) will be long gone before you reach retirement age. This means that at a younger age, you should be investing more in stocks and foreign/developing countries. If you are older, you need to be into more conservative investments (bonds, money market, etc). If you were in your 50s-60s and still heavily invested in stock, something like the current financial crisis could have ruined your retirement plans. (A lot of baby boomers learned this the hard way.) For most of your life, you will probably be somewhere in between these two. Start aggressive, and gradually get more conservative as you get older. You will probably need to re-check your asset allocation once every 5 years or so. As for how much of each investment class, there are no hard and fast rules. The idea is to maximize return while accepting a certain amount of risk. There are two big unknowns in there: (1) how much return do you expect from the various investments, and (2) how much risk are you willing to accept. #1 is a big guess, and #2 is personal opinion. A general portfolio guideline is \"\"100 minus your age\"\". This means if you are 20, you should have 80% of your retirement portfolio in stocks. If you are 60, your retirement portfolio should be 40% stock. Over the years, the \"\"100\"\" number has varied. Some financial advisor types have suggested \"\"150\"\" or \"\"200\"\". Unfortunately, that's why a lot of baby boomers can't retire now. Above all, re-balance your portfolio regularly. At least once a year, perhaps quarterly if the market is going wild. Make sure you are still in-line with your desired asset allocation. If the stock market tanks and you are under-invested in stocks, buy more stock, selling off other funds if necessary. (I've read interviews with fund managers who say failure to rebalance in a down stock market is one of the big mistakes people make when managing a retirement portfolio.) As for specific mutual fund suggestions, I'm not going to do that, because it depends on what your 401k or IRA has available as investment options. I do suggest that your focus on selecting a \"\"passive\"\" index fund, not an actively managed fund with a high expense ratio. Personally, I like \"\"total market\"\" funds to give you the broadest allocation of small and big companies. (This makes your question about large/small cap stocks moot.) The next best choice would be an S&P 500 index fund. You should also be able to find a low-cost Bond Index Fund that will give you a healthy mix of different bond types. However, you need to look at expense ratios to make an informed decision. A better-performing fund is pointless if you lose it all to fees! Also, watch out for overlap between your fund choices. Investing in both a Total Market fund, and an S&P 500 fund undermines the idea of a diversified portfolio. An aggressive portfolio usually includes some Foreign/Developing Nation investments. There aren't many index fund options here, so you may have to go with an actively-managed fund (with a much higher expense ratio). However, this kind of investment can be worth it to take advantage of the economic growth in places like China. http://www.getrichslowly.org/blog/2009/04/27/how-to-create-your-own-target-date-mutual-fund/\"",
"title": ""
},
{
"docid": "18e2dbbfbc4a95e3a737de96b732f1da",
"text": "You are young so you have time on your side. This allows you to invest in more aggressive investments. I would do the following 1) Contribute at least what your company is willing to match on your 401k, if your company offers a Roth 401k use that instead of the normal 401k (When this becomes available to you) 2) Open a Roth IRA Contribute the maximum to this account ~$5500/year 3) Live below your means, setup a budget and try and save/invest a minimum of 50% of your salary, do not get used to spending more money. With each bonus or salary increase a minimum of 75% of it should go toward your savings/investment. This will keep you from rapidly increasing your spending budget. 3) Invest in real estate (this could be its own post). Being young and not too far out of college you have probably been moving every year and have not accumulated so much stuff that it makes moving difficult. I would utilize your FHA loan slot to buy a multifamily property (2-4 Units) for your first property using only 3.5% down payment (you can put more down if you like). Learn how to analyze properties first and find a great Realtor/Mentor. Then I would continue as a NOMAD investor. Where you move every year into a new owner occupied property and turn the previous into a rental. This allows you to put 3-5% down payment of properties that you would otherwise have to put 20-25% and since you are young you can afford the risk. You should check out this article/website as it is very informative and can show you the returns that you could earn. Young Professional Nomad Good luck I am in a very similar situation",
"title": ""
},
{
"docid": "19b0e32b6f712ab5a1c24af0bef5c754",
"text": "Dollar cost averaging doesn't (or shouldn't) apply here. DCA is the natural way we invest in the market, buying in by a steady dollar amount each pay period, so over time we can buy more shares when the market is down, and fewer when it's higher. It's more psychological than financial. The fact is that given the market rises, on average, over time, if one has a lump sum to invest, it should be deployed based on other factors, not just DCA'd in. As I said, DCA is just how we all naturally invest from our income. The above has nothing to do with your situation. You are invested and wish to swap funds. If the funds are with the same broker, you should be able to execute this at the closing price. The sell and buy happen after hours and you wake up the next day with the newly invested portfolio. If funds are getting transferred from broker to broker, you do have a risk. The risk that they take time, say even 2 days when funds are not invested. A shame to lose a 2% market move as the cost of moving brokers. In this case, I'd do mine and my wife's at different times. To reduce that risk.",
"title": ""
},
{
"docid": "fdb012344bb1443fc5a22c7647a6ca73",
"text": "\"There is no equation. Only data that would help you come to the decision that's right for you. Assuming the 401(k) is invested in a stock fund of one sort or another, the choice is nearly the same as if you had $5K cash to either invest or pay debt. Since stock returns are not fixed, but are a random distribution that somewhat resembles a bell curve, median about 10%, standard deviation about 14%. It's the age old question of \"\"getting a guaranteed X% (paying the debt) or a shot at 8-10% or so in the market.\"\" This come up frequently in the decision to pre-pay mortgages at 4-5% versus invest. Many people will take the guaranteed 4% return vs the risk that comes with the market. For your decision, the 401(k) loan, note that the loan is due if you separate from the company for whatever reason. This adds an additional layer of risk and another data point to the mix. For your exact numbers, the savings is barely $50. I'd probably not do it. If the cards were 18%, I'd lean toward the loan, but only if I knew I could raise the cash to pay it back to not default.\"",
"title": ""
},
{
"docid": "58f374b3ac883e18ece5a9fca4e36f9d",
"text": "\"You're getting great wisdom and options. Establishing your actionable path will require the details that only you know, such as how much is actually in each paycheck (and how much tax is withheld), how much do you spend each month (and yearly expenses too), how much spending can you actually cut or replace, how comfortable are you with considering (or not considering) unexpected/emergency spending. You mentioned you were cash-poor, but only you know what your current account balances are, which will affect your actions and priorities. Btw, interestingly, your \"\"increase 401k contributions by 2% each year\"\" will need to end before hitting the $18K contribution limit. I took some time and added the details you posted into a cash-flow program to see your scenario over the next few years. There isn't a \"\"401k loan\"\" activity in this program yet, so I build the scenario from other simple activities. You seem financially minded enough to continue modeling on your own. I'm posting the more difficult one for you (borrow from 401k), but you'll have to input your actual balances, paycheck and spending. My spending assumptions must be low, and I entered $70K as \"\"take-home,\"\" so the model looks like you've got lots of cash. If you choose to play with it, then consider modeling some other scenarios from the advice in the other posts. Here's the \"\"Borrow $6500 from 401k\"\" scenario model at Whatll.Be: https://whatll.be/d1x1ndp26i/2 To me, it's all about trying the scenarios and see which one seems to work with all of the details. The trick is knowing what scenarios to try, and how to model them. Full disclosure: I needed to do similar planning, so I wrote Whatll.Be and I now share it with other people. It's in beta, so I'm testing it with scenarios like yours. (Notice most of the extra activity occurs on 2018-Jan-01)\"",
"title": ""
},
{
"docid": "6cc7118948c58336c684479e9e60faa0",
"text": "\"Your initial plan (of minimizing your interest rate, and taking advantage of the 401(k) match) makes sense, except I would put the 401(k) money in a very low risk investment (such as a money market fund) while the stock market seems to be in a bear market. How to decide when the stock market is in a bear market is a separate question. You earn a 100% return immediately on money that receives the company match -- provided that you stay at the company long enough for the company match to \"\"vest\"\". This immediate 100% return far exceeds the 3.25% return by paying down debt. As long as it makes sense to keep your retirement funds in low-risk, low-return investments, it makes more sense to use your remaining free cash flow to pay down debts than to save extra money in retirement funds. After setting aside the 6% of your income that is eligible for the company match, you should be able to rapidly pay down your debts. This will make it far easier for you to qualify for a mortgage later on. Also, if you can pay off your debt in a couple years, you will minimize your risk from the proposed variable rate. First, there will be fewer chances for the rate to go up. Second, even if the rate does go up, you will not owe the money very long.\"",
"title": ""
},
{
"docid": "b4ec1d889d25ed417131dc2a91cefb11",
"text": "\"Holding pure cash is a problem for 401K companies because they would then have follow banking rules because they would be holding your cash on their balance sheets. They don't want to be in that business. Instead, they should offer at least one option as a cash equivalent - a money market fund. This way the money is held by the fund, not by 401K administrator. Money Market funds invest in ultra-short term paper, such as overnight loans between banks and other debt instruments that mature in a matter of days. So it is all extremely liquid, as close to \"\"Money\"\" as you can get without actually being money. It is extremely rare for a money market fund to lose value, or \"\"break the buck.\"\" During the crisis of 2008, only one or two funds broke the buck, and it didn't last long. They had gotten greedy and their short term investments were a little more aggressive as they were trying to get extra returns. In short, your money is safe in a money market fund, and your 401K plan should offer one as the \"\"cash\"\" option, or at least it should offer a short-term bond fund. If you feel strongly that your money should be in actual cash, you can always stop contributing to the 401K and put the money in the bank. This is not a good idea though. Unless you're close to retirement, you'll be much better off investing in a well diversified portfolio, even through the ups and downs of the market.\"",
"title": ""
},
{
"docid": "6fe0703305a3f003fdb6704d235718cf",
"text": "\"First, congratulations on choosing to invest in low cost passively managed plans. If you choose any one of these options and stick with it, you will already be well ahead of most individual investors. Almost all plans will allow you to re-balance between asset classes. With some companies, sales agents will encourage you to sell your overweighted assets and buy underweighted assets as this generates brokerage commissions for them, but when you only need to make minor adjustments, you can simply change the allocation of the new money going into your account until you are back to your target weights. Most plans will let you do this for free, and in general, you will only need to do this every few years at most. I don't see much reason for you to be in the Target funds. The main feature of these plans is that they gradually shift you to a more conservative asset allocation over time, and are designed to prevent people who are close to retirement from being too aggressive and risking a major loss just before retirement. It's very likely that at your age, most plans will have very similar recommendations for your allocation, with equities at 80% or more, and this is unlikely to change for the next few decades. The main benefits of betterment seems to be simplicity and ease of use, but there is one concern I would have for you with betterment. Precisely because it is so easy to tweak your allocation, I'm concerned that you might hurt your long-term results by reacting to short-term market conditions: I know I said I wanted a hands off account, but what if the stock market crashes and I want to allocate more to bonds??? One of the biggest reasons that stock returns are better than bond returns on average is that you are being paid to accept additional risk, and living with significant ups and downs is part of what it means to be in the stock market. If you are tempted to take money out of an asset class when it has been \"\"losing/feels dangerous\"\" and put more in when it is \"\"winning/feels safe\"\", my concerns is that you will end up buying high and selling low. I'd recommend taking a look at this article on the emotional cycle of investing. My point is simply that it's very likely that if you are moving money in and out of stocks based on volatility, you're much less likely to get the full market return over the long term, and might be better off putting more weight in asset classes with lower volatility. Either way, I'd recommend taking one or more risk tolerance assessments online and making sure you're committed to sticking with a long-term plan that doesn't involve more risk than you can really live with. I tend to lean toward Vanguard Life Strategy simply because Vanguard as a company has been around longer, but betterment does seem very accessible to a new investor. Best of luck with your decision!\"",
"title": ""
},
{
"docid": "533a093533faa44e21ed84df4b85c954",
"text": "As others mentioned, I am not sure what you mean by stating that your 401K was rolled over to a money market account. Assuming that it was rolled over to an IRA account, you can roll it over to another IRA account with a financial institution of your choice (either a brokerage or a bank.) Alternatively, you can withdraw these funds, but since you are under 59.5 years old, you would have to cough up 10% penalty to IRS for this unqualified withdrawal. Therefore, I would strongly recommend for you to wait till you reach this eligible age. Other qualified (penalty-free) withdrawals are: purchase of the first home, college tuition, medical insurance premiums for unemployed individuals, disability, and medical expenses exceeding 7.5% of your Adjusted Gross Income. I would assume that your 401K was a Traditional 401K account (before tax contributions), and not ROTH 401K, so yo would also have to pay taxes upon withdrawing funds whether you do it now or after you are 59.5 y.o.",
"title": ""
},
{
"docid": "f000b3d3ea91278770cbb20cd4af0ced",
"text": "What you're describing is called timing the market. That is, if you correctly predict when the market will drop, you can sell before the drop, wait for the drop, then buy after the drop has occurred. Sell high, buy low. The fundamental problem with that, though, is: What ends up happening, on average, is you end up slightly behind. There's quite a lot of literature on this; see Betterment's explanation for example. Forbes (click through ad first) also has a detailed piece on the matter. Now, we're not really talking HFT issues here; and there are some structural things that some argue you can take advantage of (restrictions on some organizational investors, for example, similar to a blackjack dealer who has to hit on 16). However, everyone else knows about these too - so it's hard to gain much of an edge. Plenty of people say they can time the market right, and even yourself perhaps you timed a particular drop accurately. This tends to lead to false confidence though; how many drops that you timed badly do you remember? Ultimately, most investors end up slightly down when they attempt to time the market, because of the transaction costs (if you guess two drops, one 'right' and one 'wrong', and they have exactly opposite gains/losses before commissions, you will lose a bit on each due to commission), and because of the overall upward trend in the market (ie, if you picked at random one month a year to be out of the market, you'd lose around 10% annualized gains from doing that; same applies here). All of that aside, there is one major caveat: risk tolerance. If you are highly risk tolerant, say a 30 year old investing your 401(k), then you should stay in no matter what. If you're not - say you're 58 and retiring in a few years - then knowledge that there's a higher risk time period coming up might suggest moving to a less risky portfolio, even at the known cost of some gains.",
"title": ""
},
{
"docid": "409d81d23ba644288983d956803c965a",
"text": "The Money Market is a place where one trades Instruments. The market is similar to that of the Stock Market. The instruments traded in Money Markets include Short Term Debt Instruments as well as FX Swap Instruments and Mortgage & Asset Backed Securities. The FX & Mortgage Securities are not Debt instruments per se. They also include other custom created instruments that are traded. The definition of Short Term debt is any guaranteed instrument with a maturity of less than a year. These instruments are used in various transactions, including retail and the Money Market is not the only place these are traded.",
"title": ""
},
{
"docid": "4562815066c5bab4d0cdee26be14c660",
"text": "\"There is no zero risk option! There is no safe parking zone for turbulent times! There is no such thing as a zero-risk investment. You would do well to get this out of your head now. Cash, though it will retain its principle over time, will always be subject to inflation risk (assuming a positive-inflation environment which, historically in the US anyway, has always been the case since the Great Depression). But I couldn't find a \"\"Pure Cash - No investment option\"\" - what I mean by this is an option where my money is kept idle without investing in any kind of financial instrument (stocks, bonds, other MFs, currencies, forex etc etc whatever). Getting back to the real crux of your question, several other answers have already highlighted that you're looking for a money market fund. These will likely be as close to cash as you will get in a retirement account for the reasons listed in @KentA's answer. Investing in short-term notes would also be another relatively low-risk alternative to a money market fund. Again, this is low-risk, not no-risk. I wanted such kinda option because things may turn bad and I may want nothing invested in the stock markets/bond markets. I was thinking that if the market turns bear then I would move everything to cash Unless you have a the innate ability to perfectly time the market, you are better off keeping your investments where they are and riding out the bear market. Cash does not generate dividends - most funds in a retirement account do. Sure, you may have a paper loss of principle in a bear market, but this will go away once the market turns bull again. Assuming you have a fairly long time before you retire, this should not concern you in the slightest. Again, I want to stress that market timing does not work. Even the professionals, who get paid the big bucks to do this, on average, get it right as often as they get it wrong. If you had this ability, you would not be asking financial questions on Stack Exchange, I can tell you that. I would recommend you read The Four Pillars of Investing, by William Bernstein. He has a very no-nonsense approach to investing and retirement that would serve you (or anybody) well in turbulent financial markets. His discussion on risk is especially applicable to your situation.\"",
"title": ""
}
] |
fiqa
|
ace67a71d1931c77db3b103727fd0556
|
Good books for learning about tax strategy/planning
|
[
{
"docid": "95e90433ef39fdd56ddc0a47483bb000",
"text": "Keep in mind that chasing after tax savings tends to not be a good way of saving money. What is a good strategy? Making sure that you take all the deductions you are entitled to. What is a bad strategy: You asked for a book recommendation. The problem is that I don't know of any books that cover all these topics. Also keep in mind that all books, blogs, articles, and yes answers to questions have a bias. Sometimes the bias can be ignored, other times it can't. Just keep looking for information on this site, and ask good specific questions about these topics.",
"title": ""
},
{
"docid": "f2262771aae4c43eb8707146928561ae",
"text": "\"J.K. Lasser's Your Income Tax is, remarkably, a great read. It's a line by line review of the tax forms, and offers commentary and examples for every scenario. Of course, it's updated every year to reflect new rules and numbers. I actually read it from cover to cover the first year I started working. It's not going to offer convoluted strategies to use, but, you'll understand your tax return well enough to respond to the advice you encounter elsewhere. To mhoran's point - \"\"Don't let the tax tail wag the investing dog.\"\" Taxes are important, but should take a back step to earning and investing. Those who didn't sell at the height of the dotcon bubble \"\"to avoid the big tax bill\"\" only saw in hindsight that paying taxes is part of success not failure.\"",
"title": ""
}
] |
[
{
"docid": "f6fb8fcfdcc1693eaa0d7cbe4a5578ee",
"text": "You don't need a book, you need to dig into the business and understand what has changed. How long has there been a struggle to make ends meet? What seasonality exists for the business? Look at the period-over-period change for each product category as well as each line item expense, and find correlations that may exist. If it's possible, find similar insights about competition -- both brick-and-mortar as well as online. It's important to analyze the results of the business to understand (1) the normal ebbs and flows of the jewelry store seasonality, and (2) any erosion of the business to online or brick-and-mortar competitors. The other important takeaway is that you have to identify any changes in the business' expenses. Are utilities suddenly taking up more of a share of the profits, or are the costs of raw materials on the rise? Look at the cash flow to see where the money is going, or if there is a revenue problem. If business is down (and revenue as a result), you know where to start. Perhaps the answer is marketing or providing additional products or services that better match the needs of the clientele who are dropping off (i.e., online ordering and free shipping), or product pricing is elevated above the competition. On the other side, if expenses have gotten out of control, you know where to apply controls. Keep in mind that these are not mutually exclusive, and the business could have a revenue and an expense problem. If you've studied economics, you have the skills to understand the numbers and drive out the answers, but this problem requires application and not philosophy, sociology, or economics. No single book can give you the step by step process. Every business is unique, and no one but your family can provide the insights necessary to analyze the results. Best of luck! Reach out with any additional questions.",
"title": ""
},
{
"docid": "7719ab87807175cd8603c49df9557578",
"text": "Not a bad strategy. However: If you REALLY want tax efficiency you can buy stocks that don't pay a dividend, usually growth stocks like FB, GOOGL, and others. This way you will never have to pay any dividend tax - all your tax will be paid when you retire at a theoretically lower tax rate (<--- really a grey tax area here). *Also, check out Robin Hood. They offer commission free stock trading.",
"title": ""
},
{
"docid": "012987ba2771a182c17825ec9343c062",
"text": "I’ll start with what worked for me, to get me hooked. This list is by no means exhaustive. *One Up On Wall Street* by Peter Lynch discusses competitive advantages and staying close to the story of a business. Explores the concept of ‘buy what you know’. He has also written *Beating the Street*. *The Drunkard’s Walk: How Randomness Rules Our Lives* by Leonard Mlodinow is not dissimilar to *A Random Walk Down Wall Street*, but I preferred this book as it explores the concepts of randomness and survivors bias. *Against the Gods* by Peter Bernstein is a dense book, but in my opinion is the definitive text on the development of numbers, probability theory, and risk management. I absolutely love this book. *The Most Important Thing* by Howard Marks is immensely readable, enjoyable, and looks at value investing for the long run. Howard Marks has been a macro behavioural investor before behavioural investing was a thing. Speaking of behavioural biases, *Thinking, Fast and Slow* by Daniel Kahneman is a spectacular look at how your brain’s quick-trigger responses can often be wrong. On the subject of behaviour and biases, *Influence: The Psychology of Persuasion* by Robert Cialdini is another topic-defining book More books by long term veteran professional investment managers that should be enjoyed: - *The Little Book That (Still) Beats the Market* by Joel Greenblatt - *Beat the Crowd* by Ken Fisher - *Big Money Thinks Small* by Joel Tillinghast - *Common Stocks and Uncommon Profits* by Philip A. Fisher - *The Little Book of Behavioural Investing* by James Montier - *Margin of Safety* by Seth Klarman And I’ll be banned from this forum without mentioning *The Intelligent Investor* by Benjamin Graham. As per some other comments, my personal opinion is that books that describe events or periods of time like *Liars’ Poker* [80s Junk Bonds], *The Big Short* [Financial Crisis], *When Genius Failed* [the LTCM collapse, excellent read by Rogers Lowenstein], *All The Devils Are Here* [by McLean and Nocera, another Financial Crisis book, much better than Lewis’s, IMO] are all educational and quite entertaining, but don’t honestly have much to do with the actual nuts and bolts of the real financial industry. Enjoy!",
"title": ""
},
{
"docid": "574b017cfd1cf5f806022929d53b7fdc",
"text": "No need for Fabozzi yet. His stuff gets cover in plenty of college textbooks, old and new. Keep browsing /r/finance, /r/personalfinance, and /r/investing and you'll find the usual recommendations. Here's goldman sach's recommended reading list: http://www.stat.unc.edu/faculty/cji/890-11/Goldman-Sachs-Suggested-Reading-List.pdf No need to read it all. Follow your interests.",
"title": ""
},
{
"docid": "1ff0975850d918373a5f7ab0599dbcb3",
"text": "Just by chance I recently encountered this link - Do It Yourself MFE, which describes an attempt to self-educate to the level of Master of Financial Engineering. It lists books, online courses, etc. which I think may be interesting for you too.",
"title": ""
},
{
"docid": "d5d28e786242fbca478a6cf28af79948",
"text": "Itunes U has some really good online classes on economics. And as with a lot of things check out Khanacademy.org. He has a whole financial section of really well made videos. Good books to read regarding the financial crisis are The Big Short by Lewis and Too Big To Fail by Sorkin.",
"title": ""
},
{
"docid": "269de36d0cb782f86311de26506bb5a1",
"text": "Frederic Mishkin wrote a few text books on financial concepts that are widely used in colleges. If you're not looking for a textbook - I'd really recommend Khan Academy on YouTube. He's got some great videos on supply and demand - bonds, exchange rates - monetary policy by the federal reserve. All academically sound. They're very easy to digest and watch over again for reference.",
"title": ""
},
{
"docid": "faa8b56eb94acc86948a4221b8a79aa5",
"text": "Assuming you were immersed in math with your CS degree, the book **'A Non-Random Walk Down Wall Street' by Andrew Lo** is a very interesting book about the random walk hypothesis and it's application to financial markets and how efficient markets might not necessarily imply complete randomness. Lots of higher level concepts in the book but it's an interesting topic if you are trying to branch out into the quant world. The book isn't very specific towards algorithmic trading but it's good for concept and ideas. Especially for general finance, that will give you a good run down about markets and the way we tackle modern finance. **A Random Walk Down Wall Street** (which the book above is named after) by **Burton Malkiel** is also supposed to be a good read and many have suggested reading it before the one I listed above, but there really isn't a need to do so. For investing specifically, many mention **'The Intelligent Investor' by Benjamin Graham** who is the role model for the infamous Warren Buffet. It's an older book and really dry and I think kind of out dated but mostly still relevant. It's more specifically about individual trading rather than markets as a whole or general markets. It sounds like you want to learn more about markets and finance rather than simply trading or buying stocks. So I'd stick to the Andrew Lo book first. --- Also, since you might not know, it would be a good idea to understand the capital asset pricing model, free cash flow models, and maybe some dividend discount models, the last of which isn't so much relevant but good foundations for your finance knowledge. They are models using various financial concepts (TVM is almost used in every case) and utilizing them in various ways to model certain concepts. You'd most likely be immersed in many of these topics by reading a math-oriented Finance book. Try to stay away from those penny stock trading books, I don't think I need to tell a math major (who is probably much smarter than I am) that you don't need to be engaging in penny stocks, but do your DD and come to a conclusion yourself if you'd like. I'm not sure what career path you're trying to go down (personal trading, quant firm analyst, regular analyst, etc etc) but it sounds like you have the credentials to be doing quant trading. --- Check out www.quantopian.com. It's a website with a python engine that has all the necessary libraries installed into the website which means you don't have to go through the trouble yourself (and yes, it is fucking trouble--you need a very outdated OS to run one of the libraries). It has a lot of resources to get into algorithmic trading and you can begin coding immediately. You'd need to learn a little bit of python to get into this but most of it will be using matplotlib, pandas, or some other library and its own personal syntax. Learning about alpha factors and the Pipeline API is also moderately difficult to get down but entirely possible within a short amount of dedicated time. Also, if you want to get into algorithmic trading, check out Sentdex on youtube. He's a python programmer who does a lot of videos on this very topic and has his own tool on quantopian called 'Sentiment Analyzer' (or something like that) which basically quantifies sentiment around any given security using web scrapers to scrape various news and media outlets. Crazy cool stuff being developed over there and if you're good, you can even be partnered with investors at quantopian and share in profits. You can also deploy your algorithms through the website onto various trading platforms such as Robinhood and another broker and run your algorithms yourself. Lots of cool stuff being developed in the finance sector right now. Modern corporate finance and investment knowledge is built on quite old theorems and insights so expect a lot of things to change in today's world. --- With a math degree, finance should be like algebra I back in the day. You just gotta get familiar with all of the different rules and ideas and concepts. There isn't that much difficult math until you begin getting into higher level finance and theory, which mostly deals with statistics anyways like covariance and regression and other statistic-related concepts. Any other math is simple arithmetic.",
"title": ""
},
{
"docid": "2b3eb961fe4796f80757fdd694888379",
"text": "IRS Publication 463 is a great resource to help you understand what you can and can't deduct. It's not a yes/no question, it depends on the exact company use, other use, and contemporaneous record keeping.",
"title": ""
},
{
"docid": "ed94c996ea2eda52c332ab82b4541cd4",
"text": "I really like Value Investing by Bruce Greenwald. It's not a textbook so you can probably pick it up for about $20. While it is dense, I think with some patience you might be able to understand it at the undergrad level. The process outlined in the VI book is very different from the conventional corp finance way of valuing a company. A typical corp finance model would probably have you model cash flows 5 or 10 years out and then assume some sort of terminal growth. The VI book argues that it's nearly impossible to predict things that far out accurately so build your valuation on what we know. Start with the balance sheet. Then look at this year's earnings. Is that sustainable? This is a simplification of course but I describe it only so you can get the idea. I think it's definitely a worthwhile read.",
"title": ""
},
{
"docid": "691d30be5ea3ac2d0d01dfe13974d43d",
"text": "For economics I recommend mises or these videos to get you started. For daily critical analysis of financial markets, keynesian government policies, and other interesting reading I recommend zerohedge. I've learned more about financial markets and government regulations by reading the comments section on zerohedge articles than anywhere else on the internet. The comment section is very raw (i.e. lots of fucking cursing) but there are some jewels of information in there. For daily critical thinking I suggest lewrockwell.",
"title": ""
},
{
"docid": "dd37e9eeaa7692bc4df77f60e6b36d0e",
"text": "From what I can tell, the book talks about the current economic crisis is going to lead to a burst in the dollar market and government debt market. And how the current financial policies and the financial policies enacted by the previous administration, Ben Bernanke, and Alan Greenspan are going to lead to hyperinflation, devaluation of the dollar, and a massive spike in the national debt. And then it is supposed to provide financial strategies and ideas to weather the storm. That's all I can gather without buying the book. Link: http://www.amazon.com/Aftershock-Protect-Yourself-Financial-Meltdown/dp/0470918144/ref=sr_1_1?s=books&ie=UTF8&qid=1323897637&sr=1-1",
"title": ""
},
{
"docid": "f68a5018dae73bf6fa759110e10b29e9",
"text": "You're trying to attribute the current economic climate and the decisions that stem from that with raising tax rates. And the US will continue to have tax loopholes (not that that is actually the reason that high tax rates didn't kill productivity). Again, the real world examples don't agree with your bookworm ideas.",
"title": ""
},
{
"docid": "66b416b5a7b2262ada678903c3bbc1af",
"text": "First The Intelligent Investor and then the 1962 edition Security Analysis - which is out of print, you can get it on Amazon.com used or ebay. Then you can read the edition backward but the 1962 edition is the best - IMHO. And don't forget The Rediscovered Benjamin Graham and Benjamin Graham on Value Investing by Jane Lowe",
"title": ""
},
{
"docid": "54ce4f503afc151425f30f55a31e5e08",
"text": "You are smart to read books to better inform yourself of the investment process. I recommend reading some of the passive investment classics before focusing on active investment books: If you still feel like you can generate after-tax / after-expenses alpha (returns in excess of the market returns), take a shot at some active investing. If you actively invest, I recommend the Core & Satellite approach: invest most of your money in a well diversified basket of stocks via index funds and actively manage a small portion of your account. Carefully track the expenses and returns of the active portion of your account and see if you are one of the lucky few that can generate excess returns. To truly understand a text like The Intelligent Investor, you need to understand finance and accounting. For example, the price to earnings ratio is the equity value of an enterprise (total shares outstanding times price per share) divided by the earnings of the business. At a high level, earnings are just revenue, less COGS, less operating expenses, less taxes and interest. Earnings depend on a company's revenue recognition, inventory accounting methods (FIFO, LIFO), purchase price allocations from acquisitions, etc. If you don't have a business degree / business background, I don't think books are going to provide you with the requisite knowledge (unless you have the discipline to read textbooks). I learned these concepts by completing the Chartered Financial Analyst program.",
"title": ""
}
] |
fiqa
|
611d9532694a97efaea6fac11ccc9532
|
How is initial stock price (IPO) of a stock determined
|
[
{
"docid": "a81e96798063132fbf29805526674782",
"text": "Who determines company value at IPO? The Owners based on the advice from Lead Bankers and other Independent auditors who would determine the value of the company at the time of listing. At times instead of determining a fixed price a range is given [lower side and higher side]. The Market participants [FI / Institutional Investor Segments] then decide the price by bidding at an amount. There are multiple aspects in play that help stabalize the IPO and roles of various parties. A quick read of question with IPO tag is recommended Edits: Generally at a very broad level, one of the key purpose of the IPO is to either encash Owner equity [Owner wants some profits immediately] or Raise additional Capital. More often it is a mix of both. If the price is too low, one loose out on getting the true value, this would go to someone else. If the price is too high, then it may not attract enough buyers or even there are buyers, there is substantial -ve sentiment. This is not good for the company. Read the question From Facebook's perspective, was the fall in price after IPO actually an indication that it went well? This puts determining the price of IPO more in the realm of art than science. There are various mechanism [Lead bankers, Institutional Investors, Underwriters] the a company would put in place to ensure the IPO is success and that itself would moderate the price to realistic level. More often the price is kept slightly lower to create a positive buzz about the stock.",
"title": ""
}
] |
[
{
"docid": "bcf057e0eaebcc041773869fcffc7f5c",
"text": "It's still the purchase price or the price at which the shares are purchased or granted. This Investopedia article describes how the price is used for tax purposes: The amount that must be declared [for tax purposes] is determined by subtracting the original purchase or exercise price of the stock (which may be zero) from the fair market value of the stock as of the date that the stock becomes fully vested. Restricted stock awards are similar to stock options. The employer promises to grant the employee a certain number of shares upon the completion of the vesting schedule. The price at which the shares are purchased (or granted, if the price is zero) is the exercise price.",
"title": ""
},
{
"docid": "351caceff65bf83be90d557d5c8a94f5",
"text": "I stock is only worth what someone will pay for it. If you want to sell it you will get market price which is the bid.",
"title": ""
},
{
"docid": "cbe185e1d074f6ebf2fe638058bf87b2",
"text": "Market price of a stock typically trades in a range of Price/Earnings Ratio (P/E ratio). Or in other words, price of a stock = Earnings * P/E ratio Because of this direct proportionality of stock price with earnings, stock prices move in tandem with earnings.",
"title": ""
},
{
"docid": "899c9572b9f6b04a758c21d1e283dab3",
"text": "\"Just skimming through the Wikipedia article on airberlin, I notice there is more to the story than simply \"\"airberlin's IPO failed, so they postponed it and did it anyways.\"\" 3 points to keep in mind about IPOs: 1) An IPO is the mechanism for taking a private company and setting it up for shares to be owned by \"\"the public\"\". 2) The process of selling shares to the public often allows original owners and/or early investors to \"\"cash out\"\". Most countries (including member nations of the EU) limit some transactions like pre-IPO companies to \"\"accredited investors\"\". 3) Selling shares to the public also can allow the company to access more funds for growth. This is particularly important in a capital-intensive business like an airline; new B737-MAX costs >$110M. New A320neo costs >$105M USD. Ultimately, the question of a successful IPO depends on how you define success. Initially, there was a lot of concern that the IPO was set up with too much focus on goal #2... allowing the management & owners to cash out. It looks like the first approach was not meeting good opinions in the market during 2006. A major concern was that the initial approach focused on management only cashing out its shares and no money actually going to the company to support its future. The investment bankers restructured the IPO, including the issuance of more new shares so that more $ could end up in the company's accounts, not just in the accounts of the management. If anything, it's still a pretty successful IPO given that the shares were successfully listed, the company collected the money it needed to invest and grow, and the management still cashed out.\"",
"title": ""
},
{
"docid": "6ed5fc2765b7cd5b2fc6f092e65be38e",
"text": "You'd likely be subject to a lock-up period before you could sell the shares along with possibly having other rules about how you could sell your shares as you'd likely be seen as an insider that may have information that gives you an unfair advantage for selling the stock possibly. Depending on how far in advance you hold the shares, you may or may not have adjustments in the valuation and number of shares as some companies may do a split or reverse split when preparing for an IPO. A company I worked for in the late 1990s had an IPO and my stock options had a revised strike price because of a reverse stock split that was done prior to the IPO.",
"title": ""
},
{
"docid": "7aa54db9a4904567ac7fe6bc6c909344",
"text": "\"You could not have two stocks both at $40, both with P/E 2, but one an EPS of $5 and the other $10. EPS = Earnings Per Share P/E = Price per share/Earnings Per Share So, in your example, the stock with EPS of $5 has a P/E of 8, and the stock with an EPS of $10 has a P/E of 4. So no, it's not valid way of looking at things, because your understanding of EPS and P/E is incorrect. Update: Ok, with that fixed, I think I understand your question better. This isn't a valid way of looking at P/E. You nailed one problem yourself at the end of the post: The tricky part is that you have to assume certain values remain constant, I suppose But besides that, it still doesn't work. It seems to make sense in the context of investor psychology: if a stock is \"\"supposed to\"\" trade at a low P/E, like a utility, that it would stay at that low P/E, and thus a $1 worth of EPS increase would result in lower $$ price increase than a stock that was \"\"supposed to\"\" have a high P/E. And that would be true. But let's game it out: Scenario Say you have two stocks, ABC and XYZ. Both have $5 EPS. ABC is a utility, so it has a low P/E of 5, and thus trades at $25/share. XYZ is a high flying tech company, so it has a P/E of 10, thus trading at $50/share. If both companies increase their EPS by $1, to $6, and the P/Es remain the same, that means company ABC rises to $30, and company XYZ rises to $60. Hey! One went up $5, and the other $10, twice as much! That means XYZ was the better investment, right? Nope. You see, shares are not tokens, and you don't get an identical, arbitrary number of them. You make an investment, and that's in dollars. So, say you'd invested $1,000 in each. $1,000 in ABC buys you 40 shares. $1,000 in XYZ buys you 20 shares. Their EPS adds that buck, the shares rise to maintain P/E, and you have: ABC: $6 EPS at P/E 5 = $30/share. Position value = 40 shares x $30/share = $1,200 XYZ: $6 EPS at P/E 10 = $60/share. Position value = 20 shares x $60/share = $1,200 They both make you the exact same 20% profit. It makes sense when you think about it this way: a 20% increase in EPS is going to give you a 20% increase in price if the P/E is to remain constant. It doesn't matter what the dollar amount of the EPS or the share price is.\"",
"title": ""
},
{
"docid": "1343c7ed17d2c9d9ea47022e828c951c",
"text": "Not sure of the question here if by IPO(initial public offering) you mean private company then: A company can invest its excess money into other companies, to earn returns. Also a company that is private can attract private investment if the sector is doing well on publicly traded markets. Finally a company can diversify away risk, by holding shares of a company that would benefit in the event of a disruption in their own industry.",
"title": ""
},
{
"docid": "511fd9fcdff5d9b942b80d3da0ec8b73",
"text": "\"To add to @keshlam's answer slightly a stock's price is made up of several components: the only one of these that is known even remotely accurately at any time is the book value on the day that the accounts are prepared. Even completed cashflows after the books have been prepared contain some slight unknowns as they may be reversed if stock is returned, for example, or reduced by unforeseen costs. Future cashflows are based on (amongst other things) how many sales you expect to make in the future for all time. Exercise for the reader: how many iPhone 22s will apple sell in 2029? Even known future cashflows have some risk attached to them; customers may not pay for goods, a supplier may go into liquidation and so need to change its invoicing strategy etc.. Estimating the risk on future cashflows is highly subjective and depends greatly on what the analyst expects the exact economic state of the world will be in the future. Investors have the choice of investing in a risk free instrument (this is usually taken as being modelled by the 10 year US treasury bond) that is guaranteed to give them a return. To invest in anything riskier than the risk free instrument they must be paid a premium over the risk free return that they would get from that. The risk premium is related to how likely they think it is that they will not receive a return higher than that rate. Calculation of that premium is highly subjective; if I know the management of the company well I will be inclined to think that the investment is far less risky (or perhaps riskier...) than someone who does not, for example. Since none of the factors that go into a share price are accurately measurable and many are subjective there is no \"\"right\"\" share price at any time, let alone at time of IPO. Each investor will estimate these values differently and so value the shares differently and their trading, based on their ever changing estimates, will move the share price to an indeterminable level. In comments to @keshlam's answer you ask if there is enough information to work out the share price if a company buys out the company before IPO. Dividing the price that this other company paid by the relative ownership structure of the firm would give you an idea of what that company thought that the company was worth at that moment in time and can be used as a surrogate for market price but it will not and cannot accurately represent the market price as other investors will value the firm differently by estimating the criteria above differently and so will move the share price based on their valuation.\"",
"title": ""
},
{
"docid": "405279b2a7eb44babb0ab829e734ed52",
"text": "\"Check your broker's IPO list. Adding a new stock to a stock exchange is called \"\"Initial Public Offering\"\" (IPO), and most brokers have a list of upcoming IPO's in which their clients can participate.\"",
"title": ""
},
{
"docid": "23ef37a164c73863ee80e6e6f36c6079",
"text": "\"Usually the big institution that \"\"floats\"\" the stock on the market is the one to offer it to you. The IPO company doesn't sell the stock itself, the big investment bank does it for them. IPO's shareholders/employees are generally not allowed to sell their shares at the IPO until some time passes. Then you usually see the sleuth of selling.\"",
"title": ""
},
{
"docid": "60e6bdbead28c05fcc3b0f90ae5bcc63",
"text": "Of course, this calculation does not take into consideration the fact that once the rights are issues, the price of the shares will drop. Usually this drop corresponds to the discount. Therefore, if a rights issue is done correctly share price before issuance-discount=share price after issuance. In this result, noone's wealth changes because shareholders can then sell their stock and get back anything they had to put in.",
"title": ""
},
{
"docid": "61bc645ef3b01771149a23f8141b68c6",
"text": "\"IPO's are priced so that there's a pop\"\" on the opening day.\"\" If I were IPOing my company and the price \"\"popped\"\" on the open, I would think the underwriter priced it too low. In fact if I were to IPO, I'd seek an underwriter whose offerings consistently traded on the first day pretty unchanged. That means they priced it correctly. In the 90's IPO boom, there were stocks that opened up 3X and more. The original owners must have been pretty upset as the poor pricing guidance the underwriter offered.\"",
"title": ""
},
{
"docid": "5db2500544c713428b4b849702c8e351",
"text": "In order to see whether you can buy or sell some given quantity of a stock at the current bid price, you need a counterparty (a buyer) who is willing to buy the number of stocks you are wishing to offload. To see whether such a counterparty exists, you can look at the stock's order book, or level two feed. The order book shows all the people who have placed buy or sell orders, the price they are willing to pay, and the quantity they demand at that price. Here is the order book from earlier this morning for the British pharmaceutical company, GlaxoSmithKline PLC. Let's start by looking at the left-hand blue part of the book, beneath the yellow strip. This is called the Buy side. The book is sorted with the highest price at the top, because this is the best price that a seller can presently obtain. If several buyers bid at the same price, then the oldest entry on the book takes precedence. You can see we have five buyers each willing to pay 1543.0 p (that's 1543 British pence, or £15.43) per share. Therefore the current bid price for this instrument is 1543.0. The first buyer wants 175 shares, the next, 300, and so on. The total volume that is demanded at 1543.0p is 2435 shares. This information is summarized on the yellow strip: 5 buyers, total volume of 2435, at 1543.0. These are all buyers who want to buy right now and the exchange will make the trade happen immediately if you put in a sell order for 1543.0 p or less. If you want to sell 2435 shares or fewer, you are good to go. The important thing to note is that once you sell these bidders a total of 2435 shares, then their orders are fulfilled and they will be removed from the order book. At this point, the next bidder is promoted up the book; but his price is 1542.5, 0.5 p lower than before. Absent any further changes to the order book, the bid price will decrease to 1542.5 p. This makes sense because you are selling a lot of shares so you'd expect the market price to be depressed. This information will be disseminated to the level one feed and the level one graph of the stock price will be updated. Thus if you have more than 2435 shares to sell, you cannot expect to execute your order at the bid price in one go. Of course, the more shares you are trying to get rid of, the further down the buy side you will have to go. In reality for a highly liquid stock as this, the order book receives many amendments per second and it is unlikely that your trade would make much difference. On the right hand side of the display you can see the recent trades: these are the times the trades were done (or notified to the exchange), the price of the trade, the volume and the trade type (AT means automatic trade). GlaxoSmithKline is a highly liquid stock with many willing buyers and sellers. But some stocks are less liquid. In order to enable traders to find a counterparty at short notice, exchanges often require less liquid stocks to have market makers. A market maker places buy and sell orders simultaneously, with a spread between the two prices so that they can profit from each transaction. For instance Diurnal Group PLC has had no trades today and no quotes. It has a more complicated order book, enabling both ordinary buyers and sellers to list if they wish, but market makers are separated out at the top. Here you can see that three market makers are providing liquidity on this stock, Peel Hunt (PEEL), Numis (NUMS) and Winterflood (WINS). They have a very unpalatable spread of over 5% between their bid and offer prices. Further in each case the sum total that they are willing to trade is 3000 shares. If you have more than three thousand Dirunal Group shares to sell, you would have to wait for the market makers to come back with a new quote after you'd sold the first 3000.",
"title": ""
},
{
"docid": "6ea060c6609dda916ca73e499a6d44a5",
"text": "A company generally sells a portion of its ownership in an IPO, with existing investors retaining some ownership. In your example, they believe that the entire company is worth $25MM, so in order to raise $3MM it is issuing stock representing 12% of the ownership stake (3/25), which dilutes some or all of the existing stockholders' claims.",
"title": ""
},
{
"docid": "4319ebd4f62eadb63d61aa3c1f162649",
"text": "The Facebook IPO wasn't a debacle. Facebook got maximum value for their shares. That's precisely what you want at IPO. If you sell your stock initially for $25, and next week it's at $35, you've left a hell of a lot of money on the table.",
"title": ""
}
] |
fiqa
|
dc446f8ef9b35e7704beaca8cb81d4f5
|
Money transfer from India to USA
|
[
{
"docid": "3e4e0889cafa3e615afc8b6cef174d5a",
"text": "We have a house here in India worth Rs. 2 Crores. We want to sell it and take money with us. Selling the house in India will attract Capital Gains Tax. Essentially the price at which you sell the property less of the property was purchased [or deemed value when inherited by you]. The difference is Capital Gains. You have to pay tax on this gains. This is currently at 10% without Indexation and 20% with Indexation. Please note if you hold these funds for more than an year, you would additionally be liable for Wealth tax at 1% above Rs 50 lacs. Can I gift this whole amount to my US Citizen Daughter or what is the maximum limit of Gift amount What will be the tax liability on me and on my Daughter in case of Gift Whether I have to show it in my Income Tax Return or in my Daughter's Tax Return. What US Income Tax Laws says. What will be the procedure to send money as Gift to my Daughter. Assuming you are still Indian citizen when to gift the funds; From Indian tax point of you there is no tax to you. As you daughter is US citizen, there is no gift tax to her. There is no limit in India or US. So you can effectively gift the entire amount without any taxes. If you transfer this after you become a US Resident [for tax purposes], then there is a limit of USD 14,000/- per year per recipient. Effective you can gift your daughter and son-in-law 14,000/- ea and your husband can do the same. Net 14,000 * 4 USD per year. Beyond this you either pay tax or declare this and deduct it from life time estate quota. Again there is no tax for your daughter. What are the routes to take money from India to US Will the money will go directly from my Bank Act.to my Daughter's Bank Account. Will there will be wire transfer from bank to bank Can I send money through other money sender Certified Companies also. The best way is via Bank to Bank transfer. A CA Certificate is required to certify that taxes have been paid on this funds being transferred. Under the liberalized remittance scheme in India, there is a limit of USD 1 Million per year for moving funds outside of India. So you can move around Rs 6-7 Crore a year.",
"title": ""
},
{
"docid": "3c4b71e938bd8a29f79392c606d30563",
"text": "The liabilities are the same regardless of the route, besides tax evasion schemes such as handing the money to her as cash. Taxes will run up to half of the amount. The best routes are: Western union, moneygram, and similar services- about 2k You are allowed to gift 14k tax free. You can increase this amount by sending to multiple trusted people. See here. https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax-Made-Simple/INF12127.html The gifter pay taxes, the giftee does not- unless the gifter fails to pay. Let me know which route you prefer. If you do a bank transfer then you will have to work that out with your bank. If you chose to do a wire transfer, yes. Yes, if it's no more than about $2000.",
"title": ""
}
] |
[
{
"docid": "b5c208aa15db85fd959b6995ab8b9298",
"text": "In short getting funds converted outside of the Banking channel is illegal in India as Foreign Exchange is still regulated. If you show only a credit from your friend's NRE account to your NRO account [note it can't be your NRE account], it would be treated as GIFT and taxed accordingly, else you would have to show it as loan and pay back. You may show the payback in USD. But then there is a limit of Fx every individual can get converted/repatriate out of India and there is a purpose of remittance, all these complicate this further.",
"title": ""
},
{
"docid": "12da0ad4ec242e3ef7c3fc0756c9e412",
"text": "India and the United States have a tax treaty, so if you pay tax in the United States, YOU DO NOT HAVE TO PAY TAX IN INDIA OR VICE VERSA. Your father in law can wire the money back to your US bank account if you provide him with your routing number and swift code. He might be charged a little fee depending on the amount he is sending(It is usually Rs.1000/-), but once the money comes back it is absolutely tax free. If it is a lot of money, you might get an inquiry, but assuming you have already payed taxes on it, it should reflect on your W2, so you do not have to pay any further taxes. Cheers!",
"title": ""
},
{
"docid": "41ee3561cef74975b242ec5e0bf15f49",
"text": "Online money transfer facility from Axis Remit is a quick and easy way to transfer money from USA to India. AxisRemit is Axis Bank's flagship inward remittance service enables you to transfer money to your beneficiaries through the most efficient channels like online money transfer, exchange houses and money transfer operators.",
"title": ""
},
{
"docid": "d494f736c2fe7c90d149b3ec3bbbcc0f",
"text": "There are several ways to minimize the international wire transfer fees: Transfer less frequently and larger amounts. The fees are usually flat, so transferring larger amounts lowers the fee percentage. 3% is a lot. In big banks, receiving is usually ~$15. If you transfer $1000 at a time, its 1.5%, if you transfer $10000 - it's much less, accordingly. If you have the time - have them send you checks (in US dollars) instead of wire transferring. It will be on hold for some time (up to a couple of weeks maybe), but will be totally free for you. I know that many banks have either free send and/or receive. I know that ETrade provides this service for free. My credit union provides if for free based on the relationship level, I have a mortgage with them now, so I don't pay any fees at all, including for wire transfer. Consider other options, like Western Union. Those may cost more for the sender (not necessarily though), but will be free for the receiver. You can get the money in cash, or checks, which you can just deposit on your regular bank account. For smaller amounts, it should be much cheaper than wire transfer, for example - sending $500 to India costs $10, while wire transfer is $30.",
"title": ""
},
{
"docid": "1b08dffc0f06b234a0d61c09a92f4c19",
"text": "Can she send money to me in India through their NRI account? She can transfer the money to her NRE account and then to your Savings Account. Alternatively she can also transfer money directly to your savings account. There is no tax for this transaction in India as it is gift and exempt under gift tax act. If the amounts are large [run in quite a few tens of lacs], have some paperwork showing this as Gift. You can transfer this to son or doing anything you like with it.",
"title": ""
},
{
"docid": "d92cf4a2c8499ba7bb4c375c7444f3dc",
"text": "India has Foreign Exchange Management Act. Under the liberalized scheme, there are limits for individuals to move funds out of India for specific purposes. Any such transfer require a CA certificate, so it would be advisable to talk to a CA to understand the specifics of your case.",
"title": ""
},
{
"docid": "44a85d3ea44d8387f4232a5f7de85379",
"text": "From India Tax Point of view, your parents can Gift you the money. There is no tax due to this in India for your parents or for you. Transferring the funds out of India is also possible. Under the Liberalized Remittance Scheme by RBI, one can transfer upto 200,000 USD. Please check with your Bank for the exact paperwork. Typically PAN and a CA certificate mentioning the relevant clauses and certifying the purpose is required. Bank may have some more paperwork on its own.",
"title": ""
},
{
"docid": "fe1eb8501e5dedebc8147c92190186d9",
"text": "First of all, you need to tell Paypal people that you've changed your country of residence & your tax residency no longer is India. Then they'll tell you to create a new paypal account & get it verified. And then you can transfer the older paypal account money to that new paypal account & tell them to close the older paypal account. Then use remittance services to transfer to NRE. That's the legal process as far as I know, because Paypal would want to keep its records updated, or else it'd be against its Anti Money Laundering policy.",
"title": ""
},
{
"docid": "7f88fcb019da809facd934c61dfe7b09",
"text": "On my recent visit to the bank, I was told that money coming into the NRE account can only be foreign currency and for NRO accounts, the money can come in local currency but has to be a valid source of income (e.g. rent or investments in India). Yes this is correct as per FMEA regulation in India. Now if we use 3rd party remittances like Remitly or Transferwise etc, they usually covert the foreign currency into local currency like INR and then deposit it. The remittance services are better suited for transferring funds to Normal Savings accounts of your loved ones. Most remittance services would transfer funds using a domestic clearing network [NEFT] and hence the trace that funds originated outside of India is lost. There could be some generic remittance that may have direct tie-up with some banks to do direct transfers. How can we achieve this in either NRE/NRO accounts? If not, what are the other options ? You can do a Wire Transfer [SWIFT] from US to Indian NRE account. You can also use the remittance services [if available] from Banks where you hold NRE Account. For example RemittoIndia from HDFC for an NRE account in HDFC, or Money2India from ICICI for an NRE account in ICICI or QuickRemit from SBI etc. These would preserve the history that funds originated from outside India. Similarly you can also deposit a Foreign Currency Check into Indian Bank Account. The funds would take around month or so to get credited. All other funds can be deposited in NRO account.",
"title": ""
},
{
"docid": "8816a618963a106bc9a21f221dfce572",
"text": "Please find out whether you are considered to be a tax resident of the US from the date that you received the permanent immigrant visa or from the date that you first enter the US on that visa. If the former, and you received the visa after April 30, you might be a part-year resident of India for Indian Income Tax purposes for the current tax year. You need to convert your bank accounts including Fixed Deposits (the FDs that you mention) to NRO accounts as soon as possible. You will need to keep at least one NRO account open for a year or more to receive the final interest payments on your FDs as well as the proceeds of cashing in the FDs, not to mention any refunds of Indian Income Tax that may be due to you for last year or the current year. Once you are done with all these, follow the procedures outlined in this excellent answer by @Dheer to transfer the money to your US account. At this point, you can close the NRO account if you wish. As PeterK's comment says, it is not a good idea to bring a large sum of cash with you unless you are really really paranoid about banking channels. Note that if you insist on bringing cash (whether it is INR or USD) or negotiable instruments (checks or bank drafts) with you when you land in the US, these will have to be declared on entry if the total exceeds US$ 10K. There is no limit to how much you can bring with you as long as you declare it. Transfers of your own money from India to the US is not taxable income to you in the US, and income tax will already have been paid/withheld on that money in India, and so there is no income tax liability in India either on the sum transferred.",
"title": ""
},
{
"docid": "3bb072e755ce59b9c53a54cf0cfeffd8",
"text": "\"Transferring the money or keeping it in US does has no effect on taxes. Your residency status has. Assuming you are Resident Alien in US for tax purpose and have paid the taxes to IRS and you are \"\"Non-Resident\"\" Indian for tax purposes in India as you are more than 182 outside India. How would it effect my Tax in US and India If you are \"\"Non-Resident\"\" in India for tax purposes, there is no tax liability of this in India. I have transferred an amount of approx 15-20k$ to Indian Account (not NRE) By RBI regulation, if you are \"\"Non-Resident\"\" then you should get your savings account converted to \"\"NRO\"\". You may not may not choose to open an NRE account. To keep the paper work clear it helps that you open an NRE account in India. Any investment needed ? Where do i need to declare if any ? These are not relevant. Note any income generated in India, i.e. interest in Savings account / FDs / Rent etc; taxes need to be paid in India and declared in US and taxes paid in US as well. There is some relief under DTAA. There are quite a few question on this site that will help you clarify what needs to be done.\"",
"title": ""
},
{
"docid": "52d5eb834909fe217fc1de584ecdacbd",
"text": "The best way is to approach your bank and fill out a transfer form to send USD to your US account (if you are visiting India). They will require quite a number of proof (AADHAR, PAN, Passport) copies. Otherwise speak to your bank about how to do a wire transfer from your India A/C to US; after de-moitization regulations have tightened, the best course of action would be to speak to your bank directly.",
"title": ""
},
{
"docid": "b2dc71470981d50a7cf756d94fc78b87",
"text": "Convert the money into United States Dollars, put it in an NRE account in India and get 5% per annum for the USD.",
"title": ""
},
{
"docid": "56a51834c97003723af0acd774fa6198",
"text": "My account is with Indian Bank, if that's relevant. Indian Bank already has SWIFT BIC. Is there any way I can receive such international transfers in my account if the bank branch itself is not SWIFT enabled? The Branch need not be SWIFT enabled. However the Bank needs to be SWIFT enabled. Indian Bank is SWIFT enabled and has several Correspondent Banks in US. See this link on Indian Bank Website Select USD as filter in bottom page. It will list quite a few Banks that are correspondent to the Indian Bank. Click on the Link and it will give you more details. For example with Citi Bank as Correspondent. In the Beneficiary account details fill in your account details etc and send this to the company and they should be able to send you a payment based on this.",
"title": ""
},
{
"docid": "0c2dfe34ea55af11139b3dade5f2cb38",
"text": "I assume the same criteria apply for this as your previous question. You want to physically transfer in excess of 50,000 USD multiple times a week and you want the transportation mechanism to be instant or very quick. I don't believe there is any option that won't raise serious red flags with the government entities you cross the boundaries of. Even a cheque, which a person in the comments of OP's question suggests, wouldn't be sufficient due to government regulation requiring banks to put holds on such large amounts.",
"title": ""
}
] |
fiqa
|
c71091d989f4fb21547541d48f222612
|
Renters Liability in Case of Liability Claims for Property Damage or Fire
|
[
{
"docid": "aa3148deaeac309d51f8487a2b983c37",
"text": "\"The truth is anyone can sue anyone for anything. So yes you could be sued, but the more important part to measure is the probability of success. While this is probably more of a legal stack exchange question, in order for a successful suit there has to be proven at least some negligence on your part in the situation you cite. The very fact that the landlord is not willing to turn on the heat is probably enough to absolve you from any liability. Once you go down to a local store and purchase a UL certified heater then a suit would have a very low probability of success. Perhaps a case could be made if you made your own heater and it burned down the house. But that would require finding a jury that is sympathetic to landlords that will not provide heat for their tenants (highly unlikely). Could the landlord sue the heater company? Yes and would likely receive an out of court settlement. Even in the case that liability can be proven on your part, it is very unlikely you would be targeted. These type of suits target \"\"deep pockets\"\" or those with wealth. Unless something is specifically known about you having a high level of net worth a civil suit will not be brought against a \"\"room renter\"\" because of the lack of funds. People in your demographic tend not to have a lot of money. (No offense intended, I was there myself once.) In the case that you do have a high net worth, then get renters insurance and possibly an umbrella policy. It is a small price to pay to protect a significant amount of assets. If I was in your shoes here is what I would do:\"",
"title": ""
},
{
"docid": "e78c47a389e622bbb8e5b811e788ed9d",
"text": "\"According to US News, renter's insurance does cover liability as well as your own belongings. They list this as one of four \"\"myths\"\" often promulgated about renter's insurance. This is backed up by esurance.com, which explicitly mentions \"\"Property damage to others\"\" as covered. Nationwide Insurance says that renter's insurance covers \"\"Personal liability insurance for renters\"\" and \"\"Personal umbrella liability insurance\"\". Those were the first three working links for \"\"what does renters insurance cover\"\" on Google. In short, while it is possible that you currently have a different kind of coverage, this is not a limitation of renter's insurance per se. It could be a limitation in your current coverage. You may be able to simply change your coverage with your current provider. Or switch providers. Or you may already be covered. Note that renter's insurance does not cover the building against general damage, e.g. tornado or a fire spreading from an adjacent building. It is specific to covering things that you caused. This may be the cause of the confusion, as some sources say that it doesn't cover anything in the building. That's generally not true. It usually covers all your liability except for specific exceptions (e.g. waterbed insurance is often extra).\"",
"title": ""
}
] |
[
{
"docid": "cc944b121bd06b9a75a12eae2177827d",
"text": "It actually depends on the services provided. If you're renting through AirBnB, you're likely to provide much more services to the tenants than a traditional rental. It may raise it to a level when it is no longer a passive activity. See here, for starters: Providing substantial services. If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. For information, see Publication 334, Tax Guide for Small Business. Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5",
"title": ""
},
{
"docid": "e8d67572a7bb3d2d357c99fd00c4bf7d",
"text": "If your property has been affected by the disaster of fire or smoke damage, it is important for you to have a specialist who can handle your entire situation from initial damage assessment to decontamination to rebuild. Our experience and certifications give us an edge over our competitors. http://www.securerestorationfla.com/fire_smoke_damage.php",
"title": ""
},
{
"docid": "37cc8bdd08df6c1a1e8065e0b6807bbe",
"text": "It all boils down to this: If you don't have a record of what you own before a fire happens, you can't get it after the fire happens. The more records you have, the better. Proof of sales price. Proof of authenticity. Condition. Quantity. If you have to prove value, you'll be glad you have the records. It makes sense also to see what kind of things are not covered. Is art covered? How about coins or jewelry? A stamp collection? Antiques? If replacing these kinds of things is important to you, then make sure you (a) have insurance for it, and (b) can demonstrate its value with your records (purchase receipt, appraisal, etc.)",
"title": ""
},
{
"docid": "baa15753021d8703b48539871d120fcd",
"text": "You're not responsible for the mortgages on the property - those are agreements between the lender and the borrower. The risk you have is that the title search missed something. If the seller (i.e., the bank or banks who foreclosed) did not have full rights to sell the property, and there was another party who had a lien on the property or had an interest in it in some fashion, that party could make a claim that would interfere with your purchase. You wouldn't be responsible for the loan, but you might not end up with the title to the property if that happened.",
"title": ""
},
{
"docid": "db0221308f2e18423acbf06d86c2cda6",
"text": "What you are doing is unethical and illegal but is very hard to catch and prosecute. The key thing for an unethical person to think about here is insurance. For most government incentive programs you have to have the intention to live there. It is extremely hard to prove intent - unless you ask this question under your name on a public forum that is archived by many search engines and maintains a log of all changes. For other folks, it is common for them to claim that they intended to take residence but were surprised that their finances didn't work the way they anticipated. Still, as long as the bank is paid, it is unlikely that they will investigate. However, what happens if there is a major repair needed? You have insurance - because your bank has asked for proof of insurance before they will give a mortgage. That insurance is for an owner occupied building, which you do not have. Your insurance will inspect your claim. If the circumstances do not match what you are insured for because you have lied to the insurance company, they will not pay your claim - which they are entitled to do. You are operating uninsured with tenants. This is a hidden risk you may not be considering. Tenants do not treat property with the same care as an owner - this is why they are insured differently. You are now paying for insurance that you will have a difficult time ever filing a claim on. In addition, if something were to happen that makes it time to claim the insurance value so that you can pay off the mortgage, the insurance company will investigate. They may very easily refuse to pay your fraudulent claim. They may refer you to the police for insurance fraud. The bank will want their money. If they discover that you were not occupying the property, they may just foreclose. They may also notify the government that you were not occupying the property, at which point some one might search and find that you were showing intent to defraud the program out of money that is free for you but gotten through deception. Consider a less risky unethical path like telling people you've been locked out of your car and just need a little money to pay the locksmith to open it. You promise to pay them right back once you get in your car where your wallet is. Then take their money and go find another sucker. It's ethically equivalent and you are much less likely to go to jail. However you have to face the people you are deceiving for money, so you may feel less comfortable. Good luck making your decisions!",
"title": ""
},
{
"docid": "b1e85d77351e39748acab3932a4c949f",
"text": "I wish this was the case in Canada. I lost about 60k on my home in one year and have to sell now to move for work. In the US I could simply default and the bank takes the loss. In Canada if I default, CMHC pays the bank, then I'm sued by CMHC and stuck with the bad debt. Simply put - here the onus of repayment is on the lender, not the lending institution. It sounds good until you are the one looking at losing your shirt.",
"title": ""
},
{
"docid": "f304fe393f813f932683294a175b44b7",
"text": "In the rental application you are giving them express consent to check up on your credit and employment history for verification, you must be honest with them, if you have had no income for the last say 6 months then you have simply had no income. If you are worried about it, you can supply them with a longer history if it will help your situation, they may also call your employer to see that you will be returning to work or again receiving some sort of income. But also as stated, talk to the property manager, they can work both ways in either helping or not helping you.",
"title": ""
},
{
"docid": "9f47d532ee2ff1cd4da42aa86e7f3042",
"text": "Carnegie Mellon University (CMU) and the University of Pittsburgh (Pitt) have different end of term dates but by less than a month. Both have summer sessions, but most students do not stay over the summer. You can rent over the summer, but prices fall by a lot. Thirty to forty thousand students leave over the summer between the two. Only ten to twenty thousand remain throughout the year and not all of those are in Oakland (the neighborhood in Pittsburgh where the universities are located). So many of the landlords in Oakland have the same problem. Your competitors will cut their rates to try to get some rent for the summer months. This also means that you have to handle eight, nine, and three month leases rather than year long and certainly not multiyear leases. You're right that you don't have to buy the latest appliances or the best finishes, but you still have to replace broken windows and doors. Also, the appliances and plumbing need to mostly work. The furnace needs to produce heat and distribute it. If there is mold or mildew, you will have to take care of it. You can't rely on the students doing so. So you have to thoroughly clean the premises between tenants. Students may leave over winter break. If there are problems, the pipes may freeze and burst, etc. Since they're not there, they won't let you know when things break. Students drop out during the term and move out. You probably won't be able to replace them when that happens. If you have three people in two bedrooms, two of them may be in a romantic relationship. Romantic relationships among twenty-year olds end frequently. Your three people drops back to two. Your recourse in that case is to evict the remaining tenants and sue for breach of contract. But if you do that, you may not replace the tenants until a new term starts. Better might be to sue the one who left and accept the lower rent from the other two. But you likely won't get the entire rent amount for the remainder of the lease. Suing an impoverished student is not the road to riches. Pittsburgh is expected to have a 6.1% increase in house prices which almost all of it is going to be pure profit. I don't know specifically about Pittsburgh, but in the national market, housing prices are about where they were in 2004. Prices were flat to increasing from 2004 to 2007 and then fell sharply from 2007 to 2009, were flat to decreasing from 2009 to 2012, and have increased the last few years. Price to rent ratios are as high now as in 2003 and higher than they were the twenty years before that. Maybe prices do increase. Or maybe we hit a new 20% decrease. I would not rely on this for profit. It's great if you get it, but unreliable. I wouldn't rely on estimates for middle class homes to apply to what are essentially slum apartments. A 6% average may be a 15% increase in one place and a 3% decrease in another. The nice homes with the new appliances and the fancy finishes may get the 15% increase. The rundown houses in a block where students party past 2 AM may get no increase. Both the city of Pittsburgh and the county of Allegheny charge property taxes. Schools and libraries charge separate taxes. The city provides a worksheet that estimates $2860 in taxes on a $125,000 property. It doesn't sound like you would be eligible for homestead or senior tax relief. Realtors should be able to tell you the current assessment and taxes on the properties that they are selling you. You should be able to call a local insurance agent to find out what kinds of insurance are available to landlords. There is also renter's insurance which is paid by the tenant. Some landlords require that tenants show proof of insurance before renting. Not sure how common that is in student housing.",
"title": ""
},
{
"docid": "d4ba0d02eef394fb45b1f529b16dd894",
"text": "There are probably specific laws that control landlord/tenant rent disputes. But your friend's argument assumes that there aren't. Let's assume that there aren't. So there are two possibilities. Either the contract directly addresses this issue or it doesn't. If the contract directly and specifically addresses this issue, then that controls. Your friend is not claiming that it is specifically addressed. So the general principle is this -- when something occurs within a contract that wasn't explicitly discussed by the parties, courts will try to figure out what the parties likely would have agreed to had they discussed the specific issue (without changing the agreed terms of the contract). This should produce the result that is fair to both parties. Your friend is arguing then that had he and the landlord discussed the issue, the landlord would have agreed that in the event he is no longer able to accept credit cards easily, your friend could live there rent free. That doesn't seem right to me. Does it seem right to you? Much more likely they would have agreed that he might have some leeway to work out a new payment scheme and maybe some late rent should be forgiven if he made an attempt to pay on time but couldn't make arrangements. But I don't see more than that being reasonable.",
"title": ""
},
{
"docid": "6bda10a378d81f812097ff85ca990b0b",
"text": "May want to post in /r/landlord but stains on carpet are not normal wear and tear. When you say hanging things left holes in the wall do you mean small picture nails, larger holes from toggle bolts, or holes from mounting a tv bracket? Picture nail are normal wear and tear, the others are not. If they are repairing homes in the wall then there will also be painting charges. If the have stains on the carpet and it wasn't that old then the price isn't bad.",
"title": ""
},
{
"docid": "7eae9a03ef2597319995e5ee63ed4ebb",
"text": "The basis of homeowner's insurance pricing is the AOI, or Amount of Insurance. This pertains to the cost to rebuild the dwelling in the event of a total loss. The standard coverages (e.g., contents, loss of use, medical payments, liability) are calculated relative to this amount. Consequently, the AOI is selected by appraising the value of the dwelling. This is why it is important that if parts of the dwelling are upgraded, that the cost of those upgrades are taken into account. The question is not one of denying claims should a loss occur, unless the nature of the upgrade is such that policy should not have been underwritten in the first place. (This can happen if, for example, the homeowner builds an extension onto the house that damages the structural integrity of the dwelling.) In the end, the AOI is still just an estimate, but the takeaway is that, like scheduled personal property, jewelry, rare collectibles, or other endorsements, every home (and homeowner) has slightly different insurance needs, and it is in your interest to tailor your coverage to be as accurate as possible in reflecting your needs. Insurance is not a one-size-fits-all product; consequently, the selection of sufficient coverage for your mix of risks is only prudent. Now, if after you get a quote back and you find that the premium is too high, you can typically select a deductible that can reduce it, but you have to consider what amount of exposure you are willing to retain. You should shop around, too: different insurers use different methods and criteria to price their products, so even if the coverage is substantially similar, the premiums may vary: for example, some insurers ask whether you own a dog (exposure to liability claims), but others do not. Some insurers put more weight on your dwelling's geographic location (exposure to fire, theft, wind/hail) than others.",
"title": ""
},
{
"docid": "b9b5799fc7da961ab2a1c9d6082c9be0",
"text": "\"Several, actually: Maintenance costs. As landlord, you are liable for maintaining the basic systems of the dwelling - structure, electrical, plumbing, HVAC. On top of that, you typically also have to maintain anything that comes with the space, so if you're including appliances like a W/D or fridge, if they crap out you could spend a months' rent or more replacing them. You are also required to keep the property up to city codes as far as groundskeeping unless you specifically assign those responsibilities to your tenant (and in some states you are not allowed to do so, and in many cases renters expect groundskeeping to come out of their rent one way or the other). Failure to do these things can put you in danger of giving your tenant a free out on the lease contract, and even expose you to civil and criminal penalties if you're running a real slum. Escrow payments. The combination of property tax and homeowner's insurance usually doubles the monthly housing payment over principal and interest, and that's if you got a mortgage for 20% down. Also, because this is not your primary residence, it's ineligible for Homestead Act exemptions (where available; states like Texas are considering extending Homestead exemptions to landlords, with the expectation it will trickle down to renters), however mortgage interest and state taxes do count as \"\"rental expenses\"\" and can be deducted on Schedule C as ordinary business expenses offsetting revenues. Income tax. The money you make in rent on this property is taxable as self-employment income tax; you're effectively running a sole proprietorship real-estate management company, so not only does any profit (you are allowed to deduct maintenance and administrative costs from the rent revenues) get added to whatever you make in salary at your day job, you're also liable for the full employee and employer portions of Medicare/Medicaid/SS taxes. You are, however, also allowed to depreciate the property over its expected life and deduct depreciation; the life of a house is pretty long, and if you depreciate more than the house's actual loss of value, you take a huge hit if/when you sell because any amount of the sale price above the depreciated price of the house is a capital gain (though, it can work to your advantage by depreciating the maximum allowable to reduce ordinary income, then paying lower capital gains rates on the sale). Legal costs. The rental agreement typically has to be drafted by a lawyer in order to avoid things that can cause the entire contract to be thrown out (though there are boilerplate contracts available from state landlords' associations). This will cost you a few hundred dollars up front and to update it every few years. It is deductible as an ordinary expense. Advertising. Putting up a \"\"For Rent\"\" sign out front is typically just the tip of the iceberg. Online and print ads, an ad agency, these things cost money. It's deductible as an ordinary expense. Add this all up and you may end up losing money in the first year you rent the property, when legal, advertising, initial maintenance/purchases to get the place tenant-ready, etc are first spent; deduct it properly and it'll save you some taxes, but you better have the nest egg to cover these things on top of everything your lender will expect you to bring to closing (assuming you don't have $100k+ lying around to buy the house in cash).\"",
"title": ""
},
{
"docid": "61ad4a40dd9129dad9824a1f20f3a90c",
"text": "Houses burn down a lot more frequently than banks fail. Also, I'll bet the odds that FDIC will insure the loss of money in a bank is much higher than the odds of a homeowner's policy believing a huge pile of cash burned up in your house AND even then your policy probably wouldn't have coverage limits high enough to reimburse you for substantial cash losses. Oh yeah, then there is theft, floods,etc. The biggest danger is that routine inflation will eat up that money faster than the rats in the basement. Now, having some cash for a small emergency on hand isn't a terrible idea, but using your closet as a personal bank doesn't seem very smart.",
"title": ""
},
{
"docid": "52d2669e7b9531556d89fd5c4944a25b",
"text": "\"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.\"",
"title": ""
},
{
"docid": "b079ae607549fb6fe649c3fdc72958a6",
"text": "The millionaires I know, all got rich because they got lucky. And when I had a million, I got that mostly by luck as well. I had to take some risks, and people said I was absolutely mad, but I stuck to my guns. Most millionaires are rich because of luck. But very few of them will admit it. Preferring to think that skill, effort and business acumen got them there. Nope. It was luck.",
"title": ""
}
] |
fiqa
|
24533db1d385ba6c9a81c550c88cf030
|
Is there any reason to choose my bank's index fund over Vanguard?
|
[
{
"docid": "6fc9945af9c41291f054e379070cc7d6",
"text": "That expense ratio on the bank fund is criminally high. Use the Vanguard one, they have really low expenses.",
"title": ""
},
{
"docid": "0918254a089cca9fd94fee63324ec519",
"text": "\"Your bank's fund is not an index fund. From your link: To provide a balanced portfolio of primarily Canadian securities that produce income and capital appreciation by investing primarily in Canadian money market instruments, debt securities and common and preferred shares. This is a very broad actively managed fund. Compare this to the investment objective listed for Vanguard's VOO: Invests in stocks in the S&P 500 Index, representing 500 of the largest U.S. companies. There are loads of market indices with varying formulas that are supposed to track the performance of a market or market segment that they intend to track. The Russel 2000, The Wilshire 1000, The S&P 500, the Dow Industrial Average, there is even the SSGA Gender Diversity Index. Some body comes up with a market index. An \"\"Index Fund\"\" is simply a Mutual Fund or Exchange Traded Fund (ETF) that uses a market index formula to make it's investment decisions enabling an investor to track the performance of the index without having to buy and sell the constituent securities on their own. These \"\"index funds\"\" are able to charge lower fees because they spend $0 on research, and only make investment decisions in order to track the holdings of the index. I think 1.2% is too high, but I'm coming from the US investing world it might not be that high compared to Canadian offerings. Additionally, comparing this fund's expense ratio to the Vanguard 500 or Total Market index fund is nonsensical. Similarly, comparing the investment returns is nonsensical because one tracks the S&P 500 and one does not, nor does it seek to (as an example the #5 largest holding of the CIBC fund is a Government of Canada 2045 3.5% bond). Everyone should diversify their holdings and adjust their investment allocations as they age. As you age you should be reallocating away from highly volatile common stock and in to assets classes that are historically more stable/less volatile like national government debt and high grade corporate/local government debt. This fund is already diversified in to some debt instruments, depending on your age and other asset allocations this might not be the best place to put your money regardless of the fees. Personally, I handle my own asset allocations and I'm split between Large, Mid and Small cap low-fee index funds, and the lowest cost high grade debt funds available to me.\"",
"title": ""
},
{
"docid": "0b670b29a3d3a76a766776efbe58ece6",
"text": "Extortionate expense ratio aside, comparing the fund to the vanguard balanced fund (with an expense ratio of 0.19%) shows that your bank's fund has underperformed in literally every shown time period. Mind you, the vanguard fund is all US stocks and bonds which have done very well whereas the CIBC fund is mostly Canadian. Looking at the CIBC top 10 holdings does seem to suggest that it's (poorly) actively managed instead of being an index tracker for what that's worth. Maybe your bank offers cheaper transaction costs when buying their own funds but even then the discount would have to be pretty big to make up for the underperformance. Basically, go Vanguard here.",
"title": ""
},
{
"docid": "b9bc2704543ef45b92937fea547e721d",
"text": "Basically, no. Selecting an actively managed fund over a low-fee index fund means paying for the opportunity to possibly outperform the index fund. A Random Walk Down Wall Street by Burton Malkiel argues that the best general strategy for the average investor is to select the index fund because the fee savings are certain. Assuming a random walk means that any mutual fund may outperform the index in some years, but this is not an indication that it will overall. Unless you have special information about the effectiveness of the bank fund management (it's run by the next Warren Buffett), you are better off in the index fund. And even Warren Buffett suggests you are probably better off in the index fund: This year, regarding Wall Street, Buffett wrote: “When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds.”",
"title": ""
}
] |
[
{
"docid": "6e9c4642ac9007f637230e47ac684d37",
"text": "Meh. Seems like splitting hairs to me. I've tried to get Vanguard to open fossil-free index funds as Barclays has (and to which I moved heaping helpings of my Vanguard money) so maybe I'm part of the problem. By the by, those fossil free funds have been outperforming their fossilized index counterparts.",
"title": ""
},
{
"docid": "6ae1356d942a1f11b3d2191aadab1c0b",
"text": "Placing bets on targeted sectors of the market totally makes sense in my opinion. Especially if you've done research, with a non-biased eye, that convinces you those sectors will continue to outperform. However, the funds you've boxed in red all appear to be actively managed funds (I only double-checked on the first.) There is a bit of research showing that very few active managers consistently beat an index over the long term. By buying these funds, especially since you hope to hold for decades, you are placing bets that these managers maintain their edge over an equivalent index. This seems unlikely to be a winning bet the longer you hold the position. Perhaps there are no sector index funds for the sectors or focuses you have? But if there were, and it was my money that I planned to park for the long term, I'd pick the index fund over the active managed fund. Index funds also have an advantage in costs or fees. They can charge substantially less than an actively managed fund does. And fees can be a big drag on total return.",
"title": ""
},
{
"docid": "3a16e38607c9d834e9d46ff63df423c5",
"text": "No I get that. But if you don’t want risk, then buy bonds. Long term an S&P Index has very low risk. On the other hand, actively managed funds have fees that take out a ton of the gain that could be had. I don’t have time to look for the study but I read recently that 97% of actively managed funds were outperformed by S&P Indexes after fees. Now I don’t know about you but I think the risk of not picking a top 3% fund is probably higher than the safe return of index’s.",
"title": ""
},
{
"docid": "d9e1eabed9baab993878f36c4cd990f2",
"text": "It's very simple. The low cost index funds are generally the best investments for investors, but - because of the low fees and the fact that the offerings of different companies are nearly identical - they are the worst for the investment houses. Therefore, the investment houses spend a lot of money convincing investors to choose other funds. If you remember that investment houses are all in the business of making money for themselves, not for the investor, then the whole financial system will make much more sense.",
"title": ""
},
{
"docid": "8b90dc3f316e64f6d93f0fd4e355334d",
"text": "An index fund is inherently diversified across its index -- no one stock will either make or break the results. In that case it's a matter of picking the index(es) you want to put the money into. ETFs do permit smaller initial purchases, which would let you do a reasonable mix of sectors. (That seems to be the one advantage of ETFs over traditional funds...?)",
"title": ""
},
{
"docid": "7129104fb2ab770f186c5882f2e6074c",
"text": "\"when the index is altered to include new players/exclude old ones, the fund also adjusts The largest and (I would say) most important index funds are whole-market funds, like \"\"all-world-ex-US\"\", or VT \"\"Total World Stock\"\", or \"\"All Japan\"\". (And similarly for bonds, REITS, etc.) So companies don't leave or enter these indexes very often, and when they do (by an initial offering or bankruptcy) it is often at a pretty small value. Some older indices like the DJIA are a bit more arbitrary but these are generally not things that index funds would try to match. More narrow sector or country indices can have more of this effect, and I believe some investors have made a living from index arbitrage. However well run index funds don't need to just blindly play along with this. You need to remember that an index fund doesn't need to hold precisely every company in the index, they just need to sample such that they will perform very similarly to the index. The 500th-largest company in the S&P 500 is not likely to have all that much of an effect on the overall performance of the index, and it's likely to be fairly correlated to other companies in similar sectors, which are also covered by the index. So if there is a bit of churn around the bottom of the index, it doesn't necessarily mean the fund needs to be buying and selling on each transition. If I recall correctly it's been shown that holding about 250 stocks gives you a very good match with the entire US stock market.\"",
"title": ""
},
{
"docid": "7f5297c019677d5e757c6de33dcde6e5",
"text": "When you are putting your money in an index fund, you are not betting your performance against other asset classes but rather against competing investments withing the SAME asset class. The index fund always wins due to two factors: diversity, and lower cost. The lower cost attribute is essentially where you get your performance edge over the longer run. That is why if you look at the universe of mutual funds (where you get your diversification), very few will have beaten the index, assuming they have survived. -Ralph Winters",
"title": ""
},
{
"docid": "f733c669f45268778a0bccf62fb4aab9",
"text": "Vanguard has a lot of mutual fund offerings. (I have an account there.) Within the members' section they give indications of the level of risk/reward for each fund.",
"title": ""
},
{
"docid": "119a6b3a616e6ba5f32ab33c55c6b746",
"text": "So, why or why should I not invest in the cheaper index fund? They are both same, one is not cheaper than other. You get something that is worth $1000. To give a simple illustration; There is an item for $100, Vanguard creates 10 Units out of this so price per unit is $10. Schwab creates 25 units out of this, so the per unit price is $4. Now if you are looking at investing $20; with Vanguard you would get 2 units, with Schwab you would get 5 units. This does not mean one is cheaper than other. Both are at the same value of $20. The Factors you need to consider are; Related question What differentiates index funds and ETFs?",
"title": ""
},
{
"docid": "03e5e991176e44bbed3ca310f9fb51b0",
"text": "One reason it matters whether or not you're beating the S&P 500 (or the Wilshire 5000, or whatever benchmark you choose to use) is to determine whether or not you'd be better off investing in an index fund (or some other investment vehicle) instead of pursuing whatever your current investment strategy happens to be. Even if your investment strategy makes money, earning what the S&P 500 has averaged over multiple decades (around 10%) with an index fund means a lot more money than a 5% return with an actively managed portfolio (especially when you consider factors like compound interest and inflation). I use the S&P 500 as one of my criteria for judging how well (or poorly) my financial adviser is doing for me. If his recommendations (or trading activity on my behalf, if authorized) are inferior to the S&P 500, for too long, then I have a basis to discontinue the relationship. Check out this Wikipedia entry on stock market indices. There are legitimate criticisms, but on the whole I think they are useful. As an aside, the reason I point to index funds specifically is that they are the one of the lowest-cost, fire-and-forget investment strategies around. If you compare the return of the S&P 500 index over multiple decades with most actively managed mutual funds, the S&P 500 index comes out ahead.",
"title": ""
},
{
"docid": "524c23a6c5119818456cf14353b617db",
"text": "\"Vanguard's Admiral shares are like regular (\"\"investor\"\") shares in their funds, only they charge lower expense ratios. They have higher investment minimums, though. (For instance, the Vanguard Total Stock Market Index Fund has a minimum of $3,000 and an expense ratio of .18% for the Investor Shares class, but a minimum of $10,000 and an expense ratio of .07% for Admiral Shares). If you've bought a bunch of investor shares and now meet the (recently-reduced) minimum for Admiral shares, or if you have some and buy some more investor shares in the future and meet the minimums, you will qualify for a free, no-tax-impact conversion to the Admiral Shares and save yourself some money. For more information, see the Vanguard article on their recent changes to Admiral Shares minimums. Vanguard also offers institutional-class shares with even lower expense ratios than that (with a minimum of $5 million, .06% expense ratios on the same fund). A lot of the costs of operating a fund are per-individual, so they don't need to charge you extra fees for putting in more money after a certain point. They'd rather be competitive and offer it at cost. Vanguard's funds typically have very low expense ratios to begin with. (The investor shares I've been using as an example are advertised as \"\"84% lower than the average expense ratio of funds with similar holdings\"\".) In fact, Vanguard's whole reason for existing is the premise (stated in founder John C Bogle's undergraduate thesis at Princeton) that individuals can generally get better returns by investing in a cheap fund that tracks an index than by investing in mutual funds that try to pick stocks and beat the index and charge you a steep markup. The average real return of the stock market is supposedly something like 4%; even a small-looking percentage like 1% can eat a big portion of that. Over the course of 40 years waiting for retirement, saving 1% on expenses could leave you with something like 50% more money when you've retired. If you are interested in the lower expense ratios of the Admiral share classes but cannot meet the minimums, note that funds which are available as ETFs can be traded from Vanguard brokerage accounts commission-free and typically charge the same expense ratios as the Admiral shares without any minimums (but you need to trade them as individual shares, and this is less convenient than moving them around in specific dollar amounts).\"",
"title": ""
},
{
"docid": "4e5d97779d66424a1f1b251caeed7bf6",
"text": "and seems to do better than the S&P 500 too. No, that's not true. In fact, this fund is somewhere between S&P500 and the NASDAQ Composite indexes wrt to performance. From my experience (I have it too), it seems to fall almost in the middle between SPY and QQQ in daily moves. So it does provide diversification, but you're basically diversifying between various indexes. The cost is the higher expense ratios (compare VTI to VOO).",
"title": ""
},
{
"docid": "6e4f01017045a7b9ef74ebae91eacf5a",
"text": "\"I actually love this question, and have hashed this out with a friend of mine where my premise was that at some volume of money it must be advantageous to simply track the index yourself. There some obvious touch-points: Most people don't have anywhere near the volume of money required for even a $5 commission outweigh the large index fund expense ratios. There are logistical issues that are massively reduced by holding a fund when it comes to winding down your investment(s) as you get near retirement age. Index funds are not touted as categorically \"\"the best\"\" investment, they are being touted as the best place for the average person to invest. There is still a management component to an index like the S&P500. The index doesn't simply buy a share of Apple and watch it over time. The S&P 500 isn't simply a single share of each of the 500 larges US companies it's market cap weighted with frequent rebalancing and constituent changes. VOO makes a lot of trades every day to track the S&P index, \"\"passive index investing\"\" is almost an oxymoron. The most obvious part of this is that if index funds were \"\"the best\"\" way to invest money Berkshire Hathaway would be 100% invested in VOO. The argument for \"\"passive index investing\"\" is simplified for public consumption. The reality is that over time large actively managed funds have under-performed the large index funds net of fees. In part, the thrust of the advice is that the average person is, or should be, more concerned with their own endeavors than they are managing their savings. Investment professionals generally want to avoid \"\"How come I my money only returned 4% when the market index returned 7%? If you track the index, you won't do worse than the index; this helps people sleep better at night. In my opinion the dirty little secret of index funds is that they are able to charge so much less because they spend $0 making investment decisions and $0 on researching the quality of the securities they hold. They simply track an index; XYZ company is 0.07% of the index, then the fund carries 0.07% of XYZ even if the manager thinks something shady is going on there. The argument for a majority of your funds residing in Mutual Funds/ETFs is simple, When you're of retirement age do you really want to make decisions like should I sell a share of Amazon or a share of Exxon? Wouldn't you rather just sell 2 units of SRQ Index fund and completely maintain your investment diversification and not pay commission? For this simplicity you give up three basis points? It seems pretty reasonable to me.\"",
"title": ""
},
{
"docid": "d5aef11d085a3dd22f8ef4a9e831aea5",
"text": "\"Couple of clarifications to start off: Index funds and ETF's are essentially the same investments. ETF's allow you to trade during the day but also make you reinvest your dividends manually instead of doing it for you. Compare VTI and VTSAX, for example. Basically the same returns with very slight differences in how they are run. Because they are so similar it doesn't matter which you choose. Either index funds and ETF's can be purchased through a regular taxable brokerage account or through an IRA or Roth IRA. The decision of what fund to use and whether to use a brokerage or IRA are separate. Whole market index funds will get you exposure to US equity but consider also diversifying into international equity, bonds, real estate (REITS), and emerging markets. Any broker can give you advice on that score or you can get free advice from, for example, Future Advisor. Now the advice: For most people in your situation, you current tax rate is currently very low. This makes a Roth IRA a very reasonable idea. You can contribute $5,500 for 2015 if you do it before April 15 and you can contribute $5,500 for 2016. Repeat each year. You won't be able to get all your money into a Roth, but anything you can do now will save you money on taxes in the long run. You put after-tax money in a Roth IRA and then you don't pay taxes on it or the gains when you take it out. You can use Roth IRA funds for college, for a first home, or for retirement. A traditional IRA is not recommended in your case. That would save you money on taxes this year, when presumably your taxes are already low. Since you won't be able to put all your money in the IRA, you can put the rest in a regular taxable brokerage account (if you don't just want to put it in a savings account). You can buy the same types of things as you have in your IRA. Note that if your stocks (in your regular brokerage account) go up over the course of a year and your income is low enough to be in the 10 or 15% tax bracket and you have held the stock for at least a year, you should sell before the end of the year to lock in your gains and pay taxes on them at the capital gains rate of 0%. This will prevent you from paying a higher rate on those gains later. Conversely, if you lose money in a year, don't sell. You can sell and lock in losses during years when your taxes are high (presumably, after college) to reduce your tax burden in those years (this is called \"\"tax loss harvesting\"\"). Sounds like crazy contortions but the name of the game is (legally) avoiding taxes. This is at least as important to your overall wealth as the decision of which funds to buy. Ok now the financial advisor. It's up to you. You can make your own financial decisions and save the money but it requires you putting in the effort to be educated. For many of us, this education is fun. Also consider that if you use a regular broker, like Fidelity, you can call up and they have people who (for free) will give you advice very similar to what you will get from the advisor you referred to. High priced financial advisors make more sense when you have a lot of money and complicated finances. Based on your question, you don't strike me as having those. To me, 1% sounds like a lot to pay for a simple situation like yours.\"",
"title": ""
},
{
"docid": "bd36cc84ea10cfdc1920099d015b5085",
"text": "Why don't you look at the actual funds and etfs in question rather than seeking a general conclusion about all pairs of funds and etfs? For example, Vanguard's total stock market index fund (VTSAX) and ETF (VTI). Comparing the two on yahoo finance I find no difference over the last 5 years visually. For a different pair of funds you may find something very slightly different. In many cases the index fund and ETF will not have the same benchmark and fees so comparisons get a little more cloudy. I recall a while ago there was an article that was pointing out that at the time emerging market ETF's had higher fees than corresponding index funds. For this reason I think you should examine your question on a case-by-case basis. Index fund and ETF returns are all publicly available so you don't have to guess.",
"title": ""
}
] |
fiqa
|
729467dcbc2b49c1b5e4f4bf6aa12aeb
|
What are these fees attached to mutual fund FSEMX?
|
[
{
"docid": "a286b75a29218a3fd4c1ff216ddc054a",
"text": "Annual-report expense ratios reflect the actual fees charged during a particular fiscal year. Prospectus Expense Ratio (net) shows expenses the fund company anticipates will actually be borne by the fund's shareholders in the upcoming fiscal year less any expense waivers, offsets or reimbursements. Prospectus Gross Expense Ratio is the percentage of fund assets used to pay for operating expenses and management fees, including 12b-1 fees, administrative fees, and all other asset-based costs incurred by the fund, except brokerage costs. Fund expenses are reflected in the fund's NAV. Sales charges are not included in the expense ratio. All of these ratios are gathered from a fund's prospectus.",
"title": ""
},
{
"docid": "3b59b30300158f1e9a548311f157fde3",
"text": "\"FSEMX has an annual expense ratio of 0.1% which is very low. What that means is that each month, the FSEMX will pay itself one-twelfth of 0.1% of the total value of all the shares owned by the shareholders in the mutual fund. If the fund has cash on hand from its trading activities or dividends collected from companies whose stock is owned by FSEMX or interest on bonds owned by FSEMX, the money comes out of that, but if there is no such pot (or the pot is not large enough), then the fund manager has the authority to sell some shares of the stocks held by FSEMX so that the employees can be paid, etc. If the total of cash generated by the trading and the dividend collection in a given year is (say) 3% of the share value of all the outstanding mutual fund, then only 2.9% will be paid out as dividend and capital gain distribution income to the share holders, the remaining 0.1% already having been paid to FSEMX management for operating expenses. It is important to keep in mind that expenses are always paid even if there are no profits, or even if there are losses that year so that no dividends or capital gains distributions are made. You don't see the expenses explicitly on any statement that you receive. If FSEMX sells shares of stocks that it holds to pay the expenses, this reduces the share value (NAV) of the mutual fund shares that you hold. So, if your mutual fund account \"\"lost\"\" 20% in value that year because the market was falling, and you got no dividend or capital gains distributions either, remember that only 19.9% of that loss can be blamed on the President or Congress or Wall Street or public-sector unions or your neighbor's refusal to ditch his old PC in favor of a new Mac, and the rest (0.1%) has gone to FSEMX to pay for fees you agreed to when you bought FSEMX shares. If you invest directly in FSEMX through Fidelity's web site, there is no sales charge, and you pay no expenses other than the 0.1% annual expense ratio. There is a fee for selling FSEMX shares after owning them only for a short time since the fund wants to discourage short-term investors. Whatever other fees finance.yahoo.com lists might be descriptive of the uses that FSEMX puts its expense ratio income to in its internal management, but are not of any importance to the prudent investor in FSEMX who will never encounter them or have to pay them.\"",
"title": ""
}
] |
[
{
"docid": "1c2fb38a15c99bf28d50cb7d0d6e7c5a",
"text": "Merrill charges $500 flat fee to (I assume purchase) my untraded or worthless security. In my case, it's an OTC stock whose management used for a microcap scam, which resulted in a class action lawsuit, etc. but the company is still listed on OTC and I'm stuck with 1000s of shares. (No idea about the court decision)",
"title": ""
},
{
"docid": "0f575010cfb2d70008bd14a524d90fbf",
"text": "\"Its a broker fee, not something charged by the reorganizing company. E*Trade charge $20, TD Ameritrade charge $38. As with any other bank fee - shop around. If you know the company is going to do a split, and this fee is of a significant amount for you - move your account to a different broker. It may be that some portion of the fee is shared by the broker with the shares managing services provider of the reorgonizing company, don't know for sure. But you're charged by your broker. Note that the fees differ for voluntary and involuntary reorganizations, and also by your stand with the broker - some don't charge their \"\"premier\"\" customers.\"",
"title": ""
},
{
"docid": "eb84e724bb226333f80ea5fc01b6df45",
"text": "\"In many cases the expenses are not pulled out on a specific day, so this wouldn't work. On the other hand some funds do charge an annual or quarterly fee if your investment in the fund is larger than the minimum but lower than a \"\"small balance\"\" value. Many funds will reduce or eliminate this fee if you signup for electronic forms or other electronic services. Some will also eliminate the fee if the total investment in all your funds is above a certain level. For retirement funds what you suggest could be made more complex because of annual limits. Though if you were below the limits you could decide to add the extra funds to cover those expenses as the end of the year approached.\"",
"title": ""
},
{
"docid": "5e8494e54f4125111114c7361174730d",
"text": "\"Am I wrong? Yes. The exchanges are most definitely not \"\"good ole boys clubs\"\". They provide a service (a huge, liquid and very fast market), and they want to be paid for it. Additionally, since direct participants in their system can cause serious and expensive disruptions, they allow only organizations that know what they're doing and can pay for any damages the cause. Is there a way to invest without an intermediary? Certainly, but if you have to ask this question, it's the last thing you should do. Typically such offers are only superior to people who have large investments sums and know what they're doing - as an inexperienced investor, chances are that you'll end up losing everything to some fraudster. Honestly, large exchanges have become so cheap (e.g. XETRA costs 2.52 EUR + 0.0504% per trade) that if you're actually investing, then exchange fees are completely irrelevant. The only exception may be if you want to use a dollar-cost averaging strategy and don't have a lot of cash every month - fixed fees can be significant then. Many banks offer investments plans that cover this case.\"",
"title": ""
},
{
"docid": "0f25b9fbec9ffacf7aed54f24f4be5ec",
"text": "In the absence of a country designation where the mutual fund is registered, the question cannot be fully answered. For US mutual funds, the N.A.V per share is calculated each day after the close of the stock exchanges and all purchase and redemption requests received that day are transacted at this share price. So, the price of the mutual fund shares for April 2016 is not enough information: you need to specify the date more accurately. Your calculation of what you get from the mutual fund is incorrect because in the US, declared mutual fund dividends are net of the expense ratio. If the declared dividend is US$ 0.0451 per share, you get a cash payout of US$ 0.0451 for each share that you own: the expense ratio has already been subtracted before the declared dividend is calculated. The N.A.V. price of the mutual fund also falls by the amount of the per-share dividend (assuming that the price of all the fund assets (e.g. shares of stocks, bonds etc) does not change that day). Thus. if you have opted to re-invest your dividend in the same fund, your holding has the same value as before, but you own more shares of the mutual fund (which have a lower price per share). For exchange-traded funds, the rules are slightly different. In other jurisdictions, the rules might be different too.",
"title": ""
},
{
"docid": "a336e432920f71cf5cf7ca918fa8eb41",
"text": "I have a bank account in the US from some time spent there a while back. When I wanted to move most of the money to the UK (in about 2006), I used XEtrade who withdrew the money from my US account and sent me a UK cheque. They might also offer direct deposit to the UK account now. It was a bit of hassle getting the account set up and linked to my US account, but the transaction itself was straightforward. I don't think there was a specific fee, just spread on the FX rate, but I can't remember for certain now - I was transfering a few thousand dollars, so a relatively small fixed fee would probably not have bothered me too much.",
"title": ""
},
{
"docid": "d3741d5862564553029f431e8570eb66",
"text": "\"The mutual fund is legally its own company that you're investing in, with its own expenses. Mutual fund expense ratios are a calculated value, not a promise that you'll pay a certain percentage on a particular day. That is to say, at the end of their fiscal year, a fund will total up how much it spent on administration and divide it by the total assets under management to calculate what the expense ratio is for that year, and publish it in the annual report. But you can't just \"\"pay the fee\"\" for any given year. In a \"\"regular\"\" account, you certainly could look at what expenses were paid for each fund by multiplying the expense ratio by your investment, and use it in some way to figure out how much additional you want to contribute to \"\"make it whole\"\" again. But it makes about as much sense as trying to pay the commission for buying a single stock out of one checking account while paying for the share price out of another. It may help you in some sort of mental accounting of expenses, but since it's all your money, and the expenses are all part of what you're paying to be able to invest, it's not really doing much good since money is fungible. In a retirement account with contribution limits, it still doesn't really make sense, since any contribution from outside funds to try to pay for expense ratios would be counted as contributions like any other. Again, I guess it could somehow help you account for how much money you wanted to contribute in a year, but I'm not really sure it would help you much. Some funds or brokerages do have non-expense-ratio-based fees, and in some cases you can pay for those from outside the account. And there are a couple cases where for a retirement account this lets you keep your contributions invested while paying for fees from outside funds. This may be the kind of thing that your coworker was referring to, though it's hard to tell exactly from your description. Usually it's best just to have investments with as low fees as possible regardless, since they're one of the biggest drags on returns, and I'd be very wary of any brokerage-based fees when there are very cheap and free mutual fund brokerages out there.\"",
"title": ""
},
{
"docid": "ebd2083d3c4dfd4d089cf638a06602e2",
"text": "One thing I would add to @littleadv (buy an ETF instead of doing your own) answer would be ensure that the dividend yield matches. Expense ratios aren't the only thing that eat you with mutual funds: the managers can hold on to a large percentage of the dividends that the stocks normally pay (for instance, if by holding onto the same stocks, you would normally receive 3% a year in dividends, but by having a mutual fund, you only receive .75%, that's an additional cost to you). If you tried to match the DJIA on your own, you would have an advantage of receiving the dividend yields on the stocks paying dividends. The downsides: distributing your investments to match and the costs of actual purchases.",
"title": ""
},
{
"docid": "3d12c0c2e49ae772068d2367c496cb88",
"text": "0.13% is a pretty low fee. PTTRX expenses are 0.45%, VINIX expenses are 0.04%. So based on your allocation, you end up with at least 0.08%. While lower than 0.13%, don't know if it is worth the trouble (and potentially fees) of monthly re-balancing.",
"title": ""
},
{
"docid": "7a55c44dfb0435d43f0e98deac371602",
"text": "ETrade allows this without fees (when investing into one of the No-Load/No-Fees funds from their list). The Sharebuilder plan is better when investing into ETF's or stocks, not for mutual funds, their choice (of no-fees funds) is rather limited on Sharebuilder.",
"title": ""
},
{
"docid": "5ccb32cd8143fa9afeef7fda8339111b",
"text": "In the US, expense ratios are stated in the Prospectus of the fund, which you must acknowledge as having read before the fund will accept your money to invest. You never acknowledged any such thing? Actually you did when you checked the box saying that you accept the Terms of the Agreement when you made the investment. The expense ratio can be changed by vote of the Board of Directors of the fund but the change must be included in the revised Prospectus of the fund, and current investors must be informed of the change. This can be a direct mailing (or e-mailing) from the mutual fund or an invitation to read the new Prospectus on the fund's website for those who have elected to go paperless. So, yes, the expense ratio can be changed (though not by the manager of the fund, e.g. just because he/she wants a bigger salary or a fancier company car, as you think), and not without notice to investors.",
"title": ""
},
{
"docid": "704b6900ee772c3bc8f88707d1921036",
"text": "I'm not a professional, but my understanding is that US funds are not considered PFICs regardless of the fact that they are held in a foreign brokerage account. In addition, be aware that foreign stocks are not considered PFICs (although foreign ETFs may be).",
"title": ""
},
{
"docid": "667f5ee83a6fccf6901ac2c01fee122a",
"text": "I see a couple of reasons why you could consider choosing a mutual fund over an ETF In some cases index mutual funds can be a cheaper alternative to ETFs. In the UK where I am based, Fidelity is offering a management fee of 0.07% on its FTSE All shares tracker. Last time I checked, no ETF was beating that There are quite a few cost you have to foot when dealing ETFs In some cases, when dealing for relatively small amounts (e.g. a monthly investment plan) you can get a better deal, if your broker has negotiated discounts for you with a fund provider. My broker asks £12.5 when dealing in shares (£1.5 for the regular investment plan) whereas he asks £0 when dealing in funds and I get a 100% discount on the initial charge of the fund. As a conclusion, I would suggest you look at the all-in costs over total investment period you are considering for the exact amount you are planning to invest. Despite all the hype, ETFs are not always the cheapest alternative.",
"title": ""
},
{
"docid": "d1eee4f33571648fb95733b26e6f5736",
"text": "\"Here's an example that I'm trying to figure out. ETF firm has an agreement with GS for blocks of IBM. They have agreed on daily VWAP + 1% for execution price. Further, there is a commission schedule for 5 mils with GS. Come month end, ETF firm has to do a monthly rebalance. As such must buy 100,000 shares at IBM which goes for about $100 The commission for the trade is 100,000 * 5 mils = $500 in commission for that trade. I assume all of this is covered in the expense ratio. Such that if VWAP for the day was 100, then each share got executed to the ETF at 101 (VWAP+ %1) + .0005 (5 mils per share) = for a resultant 101.0005 cost basis The ETF then turns around and takes out (let's say) 1% as the expense ratio ($1.01005 per share) I think everything so far is pretty straight forward. Let me know if I missed something to this point. Now, this is what I'm trying to get my head around. ETF firm has a revenue sharing agreement as well as other \"\"relations\"\" with GS. One of which is 50% back on commissions as soft dollars. On top of that GS has a program where if you do a set amount of \"\"VWAP +\"\" trades you are eligible for their corporate well-being programs and other \"\"sponsorship\"\" of ETF's interests including helping to pay for marketing, rent, computers, etc. Does that happen? Do these disclosures exist somewhere?\"",
"title": ""
},
{
"docid": "f5712c11a97266c6e2a9309ec306d034",
"text": "You do realize that the fund will have management expenses that are likely already factored into the NAV and that when you sell, the NAV will not yet be known, right? There are often fees to run a mutual fund that may be taken as part of managing the fund that are already factored into the Net Asset Value(NAV) of the shares that would be my caution as well as possible fee changes as Dilip Sarwate notes in a comment. Expense ratios are standard for mutual funds, yes. Individual stocks that represent corporations not structured as a mutual fund don't declare a ratio of how much are their costs, e.g. Apple or Google may well invest in numerous other companies but the costs of making those investments won't be well detailed though these companies do have non-investment operations of course. Don't forget to read the fund's prospectus as sometimes a fund will have other fees like account maintenance fees that may be taken out of distributions as well as being aware of how taxes will be handled as you don't specify what kind of account these purchases are being done using.",
"title": ""
}
] |
fiqa
|
dcef3297b9c769e8fbe64d5e39f350d6
|
Is there a way to buy raw oil today and sell it in 1 year time?
|
[
{
"docid": "0d3dd9e0b9a912cdb9dd179933c58630",
"text": "There are many ways of investing either directly or indirectly in oil: all of these options are ways to invest in an expected change in the price of oil at various degrees of directness and risk profiles. Investing in derivative or derivative-like products such as futures and CFDs is very risky and requires a good degree of sophisticated knowledge to manage.",
"title": ""
},
{
"docid": "ea6800045e771f331e32666416c65c19",
"text": "Unless you have the storage and transportation facilities for it, or can come up with the money needed to rent or build those, no -- or not in any significant quantity. Buying oil futures is essentially an on-paper version of the same bet. Futures prices are already taking into account both expectations about price changes and the fact that there's cash tied up until they come due, but storage costs also adjust to follow those expectations.",
"title": ""
},
{
"docid": "317721c16afa000cc9c084a0484496f7",
"text": "You can buy the exchange traded fund ETFS WTI Crude Oil (CRUD), amongst other ETFS products. http://funds.ft.com/uk/Tearsheet/Summary?s=CRUD:LSE:USD Note these funds do not 'jump' when the crude oil futures contracts are in contango (e.g. June contract is priced higher than May) and the futures roll-over, as they do monthly. When this happens the EFTS continues with no movement. Currently May is $52.85 and June is $54.15 (so in contango). LSE:CRUD is $13.40 and if the crude oil futures rolled-over it would carry straight on at that value. For this reason one should be cautious buying and holding LSE:CRUD longterm.",
"title": ""
}
] |
[
{
"docid": "ab41d6c78c693447643f593776ed6292",
"text": "Generally speaking, you want to find goods and services that are inelastic and also require oil as a cost. Oil company stocks make record profits when oil is high, because direct demand for oil is relatively inelastic. Profit margins of oil competition should also go up, as this creates inflation in general, as people seek alternatives to the inelastic demand.",
"title": ""
},
{
"docid": "ceb0169d967e05a1d9e2cb1df64a3729",
"text": "It depends on the broker. The one I use (Fidelity) will allow me to buy then sell or sell then buy within 3 days even though the cash isn't settled from the first transaction. But they won't let me buy then sell then buy again with unsettled cash. Of course not waiting for cash to settle makes you vulnerable to a good faith violation.",
"title": ""
},
{
"docid": "928ba5ae5711711eb466cf98a7443829",
"text": "So the easy to extract petroleum products are diminishing in supply and the petroleum extraction companies have to expend more capitol to get the commodities they sell on an open market and that's hurting their profit margin? Who could have ever envisioned such a situation?",
"title": ""
},
{
"docid": "ed60840adabb35f50fbe3ecac6904235",
"text": "\"What you're looking for are either FX Forwards or FX Futures. These products are traded differently but they are basically the same thing -- agreements to deliver currency at a defined exchange rate at a future time. Almost every large venue or bank will transact forwards, when the counterparty (you or your broker) has sufficient trust and credit for the settlement risk, but the typical duration is less than a year though some will do a single-digit multi-year forward on a custom basis. Then again, all forwards are considered custom contracts. You'll also need to know that forwards are done on currency pairs, so you'll need to pick the currency to pair your NOK against. Most likely you'll want EUR/NOK simply for the larger liquidity of that pair over other possible pairs. A quote on a forward will usually just be known by the standard currency pair ticker with a settlement date different from spot. E.g. \"\"EUR/NOK 12M\"\" for the 12 month settlement. Futures, on the other hand, are exchange traded and more standardized. The vast majority through the CME (Chicago Mercantile Exchange). Your broker will need access to one of these exchanges and you simply need to \"\"qualify\"\" for futures trading (process depends on your broker). Futures generally have highest liquidity for the next \"\"IMM\"\" expiration (quarterly expiration on well known standard dates), but I believe they're defined for more years out than forwards. At one FX desk I've knowledge of, they had 6 years worth of quarterly expirations in their system at any one time. Futures are generally known by a ticker composed of a \"\"globex\"\" or \"\"cme\"\" code for the currency concatenated with another code representing the expiration. For example, \"\"NOKH6\"\" is 'NOK' for Norwegian Krone, 'H' for March, and '6' for the nearest future date's year that ends in '6' (i.e. 2016). Note that you'll be legally liable to deliver the contracted size of Krone if you hold through expiration! So the common trade is to hold the future, and net out just before expiration when the price more accurately reflects the current spot market.\"",
"title": ""
},
{
"docid": "101a9c97a94a00238daeb111a94202b4",
"text": "\"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.)\"",
"title": ""
},
{
"docid": "29c773c8f73383cc694b0fada66b967a",
"text": "\"In India the Short is what is called in other markets call as \"\"Naked Short\"\" [I think I got the right term]. It means that you can only short sell intra day and by the end of the day you have to buy back the shares [at whatever price, if you don't; the exchange will do it by force the next day]. In other markets the Intra day shorts are not allowed and one can short for several days by borrowing shares from someone else [arranged by broker] India has a futures market, so you can sell/buy something today with the execution date of one month. This is typically a fixed day of the month [I think last Thursday]\"",
"title": ""
},
{
"docid": "df3ba61964ad73d3b460b90526748266",
"text": "No, you cannot. The cash settlement period will lock up your cash depending on the product you trade. Three business days for stocks, 1 business day for options, and you would need waaaaaay more than $5,000 to trade futures.",
"title": ""
},
{
"docid": "fbe4d5b5d491227204c8a50186fca60a",
"text": "any business selling for only 1,000 will not be worth getting into. marketing alone should cost you more than that if you have any genuine hope of turning a profit. buy some books instead. work for someone, learn the ropes, read books, practice what you read at work, then start something with your savings in 5 years.",
"title": ""
},
{
"docid": "69e8f9bb3d4834b08a5af5f1618e326d",
"text": "after 10 years, I don't see how you could end up buying from a little shop. I know people much less experienced than him that don't do that... It's difficult but even someone with 1 year of experience here in China wouldn't do that",
"title": ""
},
{
"docid": "16ee6a0072309fede7b941a7feb66c44",
"text": "how does the trading company know which one I want to sell? It doesn't need to know. You just sell one. From taxation point of view depending on the country / tax jurisdiction, it can be only be FIFO or specific stock.",
"title": ""
},
{
"docid": "a3dd91d6bdcbb96ba3d298a9e1793054",
"text": "No. Supply takes 5yrs to come on line from planting to harvesting. The issue on the supply side has been twofold: 1) vanilla bean prices have been falling for some time so many farmers switched to other crops, 2) 50%+ of all vanilla bean is grown in Madasgar, which experienced a typhoon, which damaged a bunch of the existing crop. On the demand side, people are switching from artificial flavoring to more natural ingredients, which actually taste much better too. So, there's a significant demand/supply imbalance which will utilitmately correct but it could take a long time to do so. My problem is figuring out a viable shorting mechanism as the commodity is not publicly traded and the timeframe is long",
"title": ""
},
{
"docid": "2ce1cee0983831c85823c1166a154b4e",
"text": "\"In layman's terms, oil on the commodities market has a \"\"spot price\"\" and a \"\"future price\"\". The spot price is what the last guy paid to buy a barrel of oil right now (and thus a pretty good indicator of what you'll have to pay). The futures price is what the last guy paid for a \"\"futures contract\"\", where they agreed to buy a barrel of oil for $X at some point in the future. Futures contracts are a form of hedging; a futures contract is usually sold at a price somewhere between the current spot price and the true expected future spot price; the buyer saves money versus paying the spot price, while the seller still makes a profit. But, the buyer of a futures contract is basically betting that the spot price as of delivery will be higher, while the seller is betting it will be lower. Futures contracts are available for a wide variety of acceptable future dates, and form a curve when plotted on a graph that will trend in one direction or the other. Now, as Chad said, oil companies basically get their cut no matter what. Oil stocks are generally a good long-term bet. As far as the best short-term time to buy in to an oil stock, look for very short windows when the spot and near-future price of gasoline is trending downward but oil is still on the uptick. During those times, the oil companies are paying their existing (high) contracts for oil, but when the spot price is low it affects futures prices, which will affect the oil companies' margins. Day traders will see that, squawk \"\"the sky is falling\"\" and sell off, driving the price down temporarily. That's when you buy in. Pretty much the only other time an oil stock is a guaranteed win is when the entire market takes a swan dive and then bottoms out. Oil has such a built-in demand, for the foreseeable future, that regardless of how bad it gets you WILL make money on an oil stock. So, when the entire market's in a panic and everyone's heading for gold, T-debt etc, buy the major oil stocks across the spectrum. Even if one stock tanks, chances are really good that another company will see that and offer a buyout, jacking the bought company's stock (which you then sell and reinvest the cash into the buying company, which will have taken a hit on the news due to the huge drop in working capital). Of course, the one thing to watch for in the headlines is any news that renewables have become much more attractive than oil. You wait; in the next few decades some enterprising individual will invent a super-efficient solar cell that provides all the power a real, practical car will ever need, and that is simultaneously integrated into wind farms making oil/gas plants passe. When that happens oil will be a thing of the past.\"",
"title": ""
},
{
"docid": "a5274ad1059ec9a4012af453cf4769d2",
"text": "Probably the easiest way for individual investors is oil ETFs. In particular, USO seems to be fairly liquid and available. You should check carefully the bid/ask spreads in this volatile time. There are other oil ETFs and leveraged and inverse oil ETFs exist as well, but one should heed the warnings about leveraged ETFs. Oil futures are another possibility though they can be more complicated and tough to access for an individual investor. Note that futures have a drift associated with them as well. Be careful close or roll any positions before delivery, of course, unless you have a need for a bunch of actual barrels of oil. Finally, you can consider investing in commodities ETFs or Energy stocks or stock ETFs that are strongly related to the price of oil. As Keshlam mentions, care is advised in all these methods. Many people thought oil reached its bottom a few weeks back then OPEC decided to do nothing and the price dropped even further.",
"title": ""
},
{
"docid": "a67a6ab7b645e0b531b9bf3203845161",
"text": "\"You might consider working on getting your new employer to sponsor a 401k, there may be options where you can invest and they aren't required to add anything as a match (which gives you higher limits). If they don't match, they may just be liable for some administration fees. If you have any side business that you do, you might also be eligible for other \"\"self-employed\"\" options that have higher limits (SEP, Simple - I think they may go up to $15k) although, I'm not sure the nitty gritties of them.\"",
"title": ""
},
{
"docid": "c6fa45e3c91b7b5118276c42470a65ba",
"text": "I shorted at 1.35 recently, I was short from 1.39 and closed at 1.33 There are two collapse scenarios scenarios: 1. Euro collapse all countries revert (very unlikely) eur/usd = 0 2. Euro zone kicks out the PIIGS, eurusd =1.5, the currency now has only the strong countries in it which will reduce all of the eurozone risk. Scenario two will kill you if you are short. Short the currency and leverage it up (in fx you can usually get 50:1 leverage).",
"title": ""
}
] |
fiqa
|
e9208434d25d12e2ba3faed33ea1825e
|
What are the best options for an RESP for my 2 year old kid?
|
[
{
"docid": "9a0e3038ab0c6e03e0356d28e43f05f3",
"text": "Since your child is 2, he has a long time horizon for investment. Assuming the savings will be used at age 19, that's 17 years. So, I think your best bet is to invest primarily in equities (i.e. stock-based funds) and inside an RESP. Why equities? Historically, equities have outperformed debt and cash over longer time periods. But, equities can be volatile in the short term. So, do purchase some fixed-income investments (e.g. 30% government bonds and money market funds), and do also spread your equity money around as well -- e.g. buy some international funds in addition to Canadian funds. Rebalance every year, and as your child gets closer to university age, start shifting some assets out of equities and into fixed-income, to reduce risk. You don't want the portfolio torpedoed by an economic crisis the year before the money is required! Next, why inside an RESP? Finally... what if your kid doesn't attend post-secondary education? First, you should probably get a Family RESP, not a Group RESP. Group RESPs have strict rules and may forfeit contributions if your kid doesn't attend. Have a look at Choosing the Right RESP and Canadian Capitalist's post The Pros and Cons of Group RESP Plans. In a Family plan, if none of your kids end up attending post-secondary education, then you forfeit the government match money -- the feds get it back through a 20% surtax on withdrawals. But, you'll have the option of rolling over remaining funds into your RRSP, if you have room.",
"title": ""
}
] |
[
{
"docid": "c2d0acd73942fdaf40b3cd3e4c76c664",
"text": "The above is very true, but the biggest bang for your buck can also be in the RESP, assuming you qualify for the grant of 20% per year...it's hard to beat free money from the government...in this account, your investment grows, and the growth and grant is taxed in the hands of the child when it is withdrawn. (Normally, they dont have much income at this point, so pay little or no tax) However, you do not get any income tax deduction or tax break at the time you make the deposit.",
"title": ""
},
{
"docid": "109b7ab476d67edd0472a6eb7be8ad13",
"text": "I've found a much better time at the independent toy stores. My daughter is into some unique things at her age. Graphic novels and weird dolls. At 11 toysrus doesn't cut it. It's a shame though, babies r us was a great place for our baby needs when we had kids. In the end it is sad to see a toy store chain go down. Kids need the stuff that toy stores have to offer. Kids are too engrossed in digital media. They need the 3d world that toys give them, and it's really tragic to see where kids are going.",
"title": ""
},
{
"docid": "f829c5590b6964b2e6b929ca81b0be2c",
"text": "I am not sure whether this hold in all countries, but at least in the Netherlands my bank allows for investment in funds without charging transaction costs. The downside is that these funds charge an annual fee of about 1%, but for the amounts you are talking about this definitely sounds more attractive than the alternative. As an alternative, you could ofcourse just take care of the transaction costs. That way your child can see their funds develop as you put it into different stocks without being distracted by the details. Of course you feel the 'pain' but I believe the main lesson stands out most this way.",
"title": ""
},
{
"docid": "40965c0ba17523dcab20b0d0a7b79a96",
"text": "\"(Since you used the dollar sign without any qualification, I assume you're in the United States and talking about US dollars.) You have a few options here. I won't make a specific recommendation, but will present some options and hopefully useful information. Here's the short story: To buy individual stocks, you need to go through a broker. These brokers charge a fee for every transaction, usually in the neighborhood of $7. Since you probably won't want to just buy and hold a single stock for 15 years, the fees are probably unreasonable for you. If you want the educational experience of picking stocks and managing a portfolio, I suggest not using real money. Most mutual funds have minimum investments on the order of a few thousand dollars. If you shop around, there are mutual funds that may work for you. In general, look for a fund that: An example of a fund that meets these requirements is SWPPX from Charles Schwabb, which tracks the S&P 500. Buy the product directly from the mutual fund company: if you go through a broker or financial manager they'll try to rip you off. The main advantage of such a mutual fund is that it will probably make your daughter significantly more money over the next 15 years than the safer options. The tradeoff is that you have to be prepared to accept the volatility of the stock market and the possibility that your daughter might lose money. Your daughter can buy savings bonds through the US Treasury's TreasuryDirect website. There are two relevant varieties: You and your daughter seem to be the intended customers of these products: they are available in low denominations and they guarantee a rate for up to 30 years. The Series I bonds are the only product I know of that's guaranteed to keep pace with inflation until redeemed at an unknown time many years in the future. It is probably not a big concern for your daughter in these amounts, but the interest on these bonds is exempt from state taxes in all cases, and is exempt from Federal taxes if you use them for education expenses. The main weakness of these bonds is probably that they're too safe. You can get better returns by taking some risk, and some risk is probably acceptable in your situation. Savings accounts, including so-called \"\"money market accounts\"\" from banks are a possibility. They are very convenient, but you might have to shop around for one that: I don't have any particular insight into whether these are likely to outperform or be outperformed by treasury bonds. Remember, however, that the interest rates are not guaranteed over the long run, and that money lost to inflation is significant over 15 years. Certificates of deposit are what a bank wants you to do in your situation: you hand your money to the bank, and they guarantee a rate for some number of months or years. You pay a penalty if you want the money sooner. The longest terms I've typically seen are 5 years, but there may be longer terms available if you shop around. You can probably get better rates on CDs than you can through a savings account. The rates are not guaranteed in the long run, since the terms won't last 15 years and you'll have to get new CDs as your old ones mature. Again, I don't have any particular insight on whether these are likely to keep up with inflation or how performance will compare to treasury bonds. Watch out for the same things that affect savings accounts, in particular fees and reduced rates for balances of your size.\"",
"title": ""
},
{
"docid": "d9cb6f639cc02d9fa95f1f7e8dd31186",
"text": "Probably the biggest tax-deferment available to US workers is through employee-sponsored investment plans like the 401k. If you meet the income limits, you could also use a Traditional IRA if you do not have a 401k at work. But keep in mind that you are really just deferring taxes here. The US Government will eventually get their due. :) One way which you may find interesting is by using 529 plans, or other college investment plans, to save for your child's (or your) college expenses. Generally, contributions up to a certain amount are deductible on your state taxes, and are exempt from Federal and State taxes when used for qualifying education expenses. The state deduction can lower your taxes and help you save for college for your children, if that is a desire of yours.",
"title": ""
},
{
"docid": "af4dbc0ed1f473214c1b014c4152a01e",
"text": "Question One: Question Two: Your best reference for this would be a brokerage account with data privileges in the markets you wish to trade. Failing that, I would reference the Chicago Mercantile Exchange Group (CME Group) website. Question Three: Considering future tuition costs and being Canadian, you are eligible to open a Registered Education Savings Plan (RESP). While contributions to this plan are not tax deductible, any taxes on income earned through investments within the fund are deferred until the beneficiary withdraws the funds. Since the beneficiary will likely be in a lower tax bracket at such a time, the sum will likely be taxed at a lower rate, assuming that the beneficiary enrolls in a qualifying post secondary institution. The Canadian government also offers the Canada Education Savings Grant (CESG) in which the federal government will match 20% of the first $2500 of your annual RESP contribution up to a maximum of $500.",
"title": ""
},
{
"docid": "60bf7b6da0028df6d81ff50b2319201e",
"text": "Group RESPs are a bit like a true mutual insurance company. You all pay into the fund, and then, depending on the number of kids that are in school that particular year, you get paid a certain amount. Advantages could be that if you end up with one or two years of only your kid in school and nobody else's in that age bracket, you get more money. Disadvantage for the same-reverse reason also could be true. Another advantage of regular programs, unlike pooled, is that if you do not use all the money, then some/all of the remaining funds may be transferable to an RRSP. Personally I would not invest in one, unless it was more like a specific investment-club that I knew everybody.",
"title": ""
},
{
"docid": "be328e7afd1c173af50f4af885eb9548",
"text": "\"I found this great resource at MarketWatch.com - a listing on online games that help parents teach kids about saving and finance, set up by age group. Here's an example of some of the content: For children six to nine: www.fleetkids.com, sponsored by the Fleet Bank, has great games -- like \"\"Buy lo, Sell hi\"\" and \"\"Chunka Change\"\" -- that teach kids about spending and saving. Kids can compete for prizes such as computers and backpacks for their schools.\"",
"title": ""
},
{
"docid": "004e710d7ff0fe074ec199a39c4db1e8",
"text": "Have you looked at 529 plan yet? There are tax benefits with it and you can roll over the remaining funds from your first child's account into your second child's, etc. Read this article to get yourself up to speed for this plan. Coverdell Education Savings Account is another plan you can look at. The Wikipedia article talks about the similarities and differences, so I won't repeat here.",
"title": ""
},
{
"docid": "4cda418d37f637ca634dd67e846e44ef",
"text": "We are a pretty average (professional, used to be fully two-income) family. I have gone part-time (plus a total career change) to be more involved at home - that's minus 50K from our family budget a year. Montessori for the younger one is - 10K. Violin (-5K) and piano (-5K) lessons for each kid... summer science camps... summer golf/tennis plus equipment... dance/sports all year round are around 10K too. We are looking at an 80K hole in our budget (compared to what we could have had). Plus by now I would have been probably more advanced in my previous career had I stayed there, so the hole is potentially even greater.",
"title": ""
},
{
"docid": "c88555d43ab1551de25728acbc573e73",
"text": "Have you looked at conventional financing rather than VA? VA loans are not a great deal. Conventional tends to be the best, and FHA being better than VA. While your rate looks very competitive, it looks like there will be a .5% fee for a refinance on top of other closing costs. If I have the numbers correct, you are looking to finance about 120K, and the house is worth about 140K. Given your salary and equity, you should have no problem getting a conventional loan assuming good enough credit. While the 30 year is tempting, the thing I hate about it is that you will be 78 when the home is paid off. Are you intending on working that long? Also you are restarting the clock on your mortgage. Presumably you have paid on it for a number of years, and now you will start that long journey over. If you were to take the 15 year how much would go to retirement? You claim that the $320 in savings will go toward retirement if you take the 30 year, but could you save any if you took the 15 year? All in all I would rate your plan a B-. It is a plan that will allow you to retire with dignity, and is not based on crazy assumptions. Your success comes in the execution. Will you actually put the $320 into retirement, or will the needs of the kids come before that? A strict budget is really a key component with a stay at home spouse. The A+ plan would be to get the 15 year, and put about $650 toward retirement each month. Its tough to do, but what sacrifices can you make to get there? Can you move your plan a bit closer to the ideal plan? One thing you have not addressed is how you will handle college for the kids. While in the process of long term planning, you might want to get on the same page with your wife on what you will offer the kids for help with college. A viable plan is to pay their room and board, have them work, and for them to pay their own tuition to community college. They are responsible for their own spending money and transportation. Thank you for your service.",
"title": ""
},
{
"docid": "2e2ee7ee87735ca5b9e3bfd3e33331d1",
"text": "My son is in a similar situation where he is 21 and in college. My wife and I claimed him as a dependant on our taxes last year. He had still been able to get some student loans as a dependant as well as scholarships. I have told him that we will not cosign on a loan for him. It isn't because we don't like our son, it is simply because too many unexpected things can happen. He has been working multiple jobs which is one thing I would suggest as well as donating plasma for extra money to have a social life. As an electrical engineering major he doesn't have much time to be social. He cuts rent by having roommates and does most of his own cooking to help with food costs. The main thing he does to keep his costs under control is attends a school that isn't outrageously expensive. An expensive school does not offer as much benefit for an undergrad degree as it might for a graduate degree. Another option is to look for a job that had some sort of tuition assistance. Another option along that same line is look into military service either active duty or reserves as there is tuition help to be found there. There are options that don't involve debt. As a side note my son used a student loan last year however, this coming year he has his budget figured out and he will not be needing one at all.",
"title": ""
},
{
"docid": "6f5dd68de3ec919add46bf5c947d97fd",
"text": "First, don't borrow any more money. You're probably bankrupt right now at that income level. 2k/month is poverty level income, especially in some of the higher cost of living areas of California. At $2k per month of income, and $1300 of rent and utilities, you've only got 700 a month for food. The student loans are probably in deferment while your husband is in school. If so, keep them that way and deal with them when he lands a career track goal after grad school. The car loan is more than you can afford. Seriously consider selling the car to get rid of the note. Then use the cash flow that was going to the car loan to pay off the 'other' debt. A car is usually a luxury, but if it is necessary, be sure it is one that doesn't include a loan. Budget all of your income (consider using YNAB or something like it). Include a budget item to build an emergency fund. Live within your means and look for ways to supplement your income. With three of your own, you'd probably make an excellent baby sitter. As for the inheritance, find a low risk, liquid investment, such as 12 month CDs or savings bonds. Something that you can liquidate without penalty if an emergency arises. Save the money for if you get into a situation where there is no other way out. Hopefully you can have your emergency fund built up so that you don't need to draw on the inheritance. Set a date, grad school + landing + 90 days. If you reach that date and haven't had to use the inheritance, and you have a good emergency fund, put the inheritance in a retirement fund and forget about it. Why retirement fund and not a college fund for the kids? The best gift you can give them is to remain financially independent throughout your life. If you get to the point where you are fully funding your tax advantaged retirement savings, and you are ready to start wealth-building, that is the time to take part of that cash flow and set it aside for college funds.",
"title": ""
},
{
"docid": "f15b05554025e2545caacdce856d4c84",
"text": "I don't know of any financial account that offers that kind of protection. I'm going to echo @Brick and say that if you need that level of restrictions on the money, you should talk to a lawyer. Your only option may be to setup a trust. If you are willing to go with a lower level of restrictions on the account, a 529 plan could do the job. A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It will be in your daughters name, and has the benefit of being tax advantaged, unless its used for non educational expenses. Since your daughter is a minor, there would have to be a custodian for the account that manages it on her behalf. The penalty for using it for non educational expenses might suffice to keep the custodian from draining the account, and I believe the custodian has a fiduciary duty to the account holder, which would open them up to lawsuits if the custodian did act in a way that was detrimental to your child.",
"title": ""
},
{
"docid": "2e3ef60e22536acc94cfd8fd5d74975b",
"text": "Look at your options with a 529 program. If the money is used for education expenses: that currently includes tuition, room & board (even if living off campus), books, transportation; it grows tax free. Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board. Contributions to a 529 plan, however, are not deductible. If it is a 529 associated with your state you can also save on state taxes. You can make contributions on a regular basis, or ad hoc. Accounts can even be setup by other relatives. I have used a 529 to fund two kids education. It takes care of most of your education expenses. 529 programs are available from most states, and even some of the big mutual fund companies. Many have the option of shifting the risk level of the investments to be more conservative as the kids hit high school. Some states have an option to have you pay a large sum when the child is small to buy semesters of college. The deal is worth considering if you know they will be going to a state school, the deal is less good if they will go out of state or to a private college. The IRS does limit the maximum amount that you can contribute in a year an amount that exceeds the 14,000 annual gift limit: If in 2014, you contributed more than $14,000 to a Qualified Tuition Plan (QTP) on behalf of any one person, you may elect to treat up to $70,000 of the contribution for that person as if you had made it ratably over a 5-year period. The election allows you to apply the annual exclusion to a portion of the contribution in each of the 5 years, beginning in 2014. You can make this election for as many separate people as you made QTP contributions One option at the end is to take any extra money at graduation and give it to the child so that it can be used for graduate school, or if the taxes and penalties are paid it can be used for that first car. It can even be rolled over to another relative.",
"title": ""
}
] |
fiqa
|
8ceab693c7e4c24fe3d7654439f8f921
|
Question about MBS and how it pays
|
[
{
"docid": "2091e876d65d16a2472976058dc08912",
"text": "A security is a class of financial instrument you can trade on the market. A share of stock is a kind of security, for example, as is a bond. In the case of your mortgage, what happens: You take out a loan for $180k. The loan has two components. a. The payment stream (meaning the principal and the interest) from the loan b. The servicing of the loan, meaning the company who is responsible for accepting payments, giving the resulting income to whomever owns it. Many originating banks, such as my initial lender, do neither of these things - they sell the payment stream to a large bank or consortium (often Fannie Mae) and they also sell the servicing of the loan to another company. The payment stream is the primary value here (the servicing is worth essentially a tip off the top). The originating bank lends $180k of their own money. Then they have something that is worth some amount - say $450k total value, $15k per year for 30 years - and they sell it for however much they can get for it. The actual value of $15k/year for 30 years is somewhere in between - less than $450k more than $180k - since there is risk involved, and the present value is far less. The originating bank has the benefit of selling that they can then originate more mortgages (and make money off the fees) plus they can reduce their risk exposure. Then a security is created by the bigger bank, where they take a bunch of mortgages of different risk levels and group them together to make something with a very predictable risk quotient. Very similar to insurance, really, except the other way around. One mortage will either default or not at some % chance, but it's a one off thing - any good statistician will tell you that you don't do statistics on n=1. One hundred mortgages, each with some risk level, will very consistently return a particular amount, within a certain error, and thus you have something that people are willing to pay money on the market for.",
"title": ""
},
{
"docid": "77df099b9a1bf6206b933052a093779b",
"text": "A Mortgage Backed Security or MBS is the security. It's not an entity, it's essentially a contract. As an investment they function more or less the same way a bond does. There is nothing wrong with the concept behind a Mortgage Backed Security. Functionally securities like these allows banks and other institutions to lend to high-risk borrowers. You package small slices of a wide range of risk from a large number of mortgages and the investor sill receive something similar to the average of the rates being charged. Essentially from a big pool of mortgages of varying risk you will create a different big pool of bonds that can be sold to investors based on some sort of expected return. For a frame of reference on a much smaller scale look at peer to peer lending sites like LendingClub and Prosper. The idea is lots of people of varying risk profiles make requests for loans of varying amounts. You bring your $2,500 and invest $25 in to 100 different loans. This way even if a few default you will still eek out a profit. It also allows you to include riskier borrowers without materially impacting your expected return.",
"title": ""
}
] |
[
{
"docid": "af0ce708ad38b9462d3c05f97fadf06b",
"text": "Banks are audited, for obvious reasons. Their software is carefully audited and protected, also for obvious reasons. A branch manager can't normally bypass those without getting caught quite quickly. He might be able to issue himself a loan -- but it will have to be a loan that at least appears to conform to the bank's standards, and he'll have to pay it off just like any other loan.",
"title": ""
},
{
"docid": "1a2a765a7cfc832278978c121597cd18",
"text": "Running a sandwich shop and, say, a software consulting service are quite different things. I had two employees at one point, following the kind of thinking in the article. But I found what that meant was that I had to spend more time being a manager and salesperson and much less time doing the work I enjoyed. To make it viable I would have had to scale up to the point where I had at least one salesperson and maybe a manager, which would have required more income-producing staff to support them. Instead, I scaled back to just myself, and have been very happy with that decision. The article also underestimates what can be made in consulting or IT contracting. Rates well above $100/hr are common for people with expertise (as opposed to commodity providers), and billing at least 40 hours a week is not usually a problem. It's certainly true that a one-man operation is much more likely to put a ceiling on your earnings, but (a) that ceiling can be a lot higher than the article suggests, and (b) depending on the business, breaking that ceiling and earning much more is certainly possible in some businesses, for example where you have the opportunity to sell your work in product form rather than hourly.",
"title": ""
},
{
"docid": "3ebe277b33ff978605066cd87d13683e",
"text": "\"I feel that getting money sooner than later is always advantageous. If I offered you the choice between getting: Which option would you take? I would take the last option. And for the same reason, from a purely-numbers point of view, I would argue that getting paid biweekly is preferable (assuming the the annual salary is pro-rated fairly, and barring any compulsive spending habits). Your calculations suggest to me that they are trying to answer the question, \"\"Looking at a single year or month (or some other fixed amount of time) in a vacuum, is there any financial benefit to being paid bi-weekly over monthly?\"\". The analysis seems to be focusing on comparing the two pay schedules on a month-by-month basis, noting when one is paid bi-weekly, some months you get paid more times than the other. However, one could also compare the two pay schedules on a fortnight-by-fortnight basis, and note that when one is paid monthly, many fortnights you don't get paid at all, and some you get paid a lot. Or one could compare the two pay schedules on an hour-by-hour basis, too. But in the long run, the money adds up to be the same amount. I prefer getting it as soon as I can.\"",
"title": ""
},
{
"docid": "ca226fb2b7f8c68bafb0785b16c65a49",
"text": "Sorry to call you out on this, but your numbers are definitely off. If someone takes you seriously you'll be misleading them and I'd like to avoid that. Maybe you had this conversation with your friends many years ago when salaries were lower? The big consulting firms all have set base salary and signing bonus for all entry level positions in the US. Everyone in the starting class out of undergrand has the same starting salary (across all geographic regions). Depending on the firm and your performance, you then receive a year end bonus (or no bonus at all). For MBB, you can expect close to a 6 figure salary in your first year. With an MBA, you're closer to $200k with bonus. Source: I work for a top consulting firm, but here are some hard figures: http://managementconsulted.com/consulting-jobs/2012-management-consulting-salaries-undergraduate-post-mba/#",
"title": ""
},
{
"docid": "801f32ddba9eaedf68402f1e7c52eb30",
"text": "Probably more like ELI10. Bob gets 10$ a week in lunch money from his parents. Jim's dad works as a travelling salesman and makes a fixed salary plus a weekly commission, jim gets 5$ in allowance + whatever extra his dad makes, some weeks 20$ some 5$ some 7. So Jim wants to make his allowance a bit more constant and bob wants a piece of the commission. Mathematically: Bob's allowance = 10$/week Jim's allowance = 5$ + C / week C is unknown. So they make a deal. Jim will receive 5$ from Bob every week. In return Jim will pay bob the extra allowance every week. The new deal is Bob = 5$ + C Jim = 10$ How they get to this arrangement is every week they sit at the lunch table. Bob takes out 5$, jim takes out his extra commission. They net the amount and pay whomever profits.",
"title": ""
},
{
"docid": "085b9e5bbc0ece3cb0def12fbf86347c",
"text": "You need to look at where the profits are coming from. In this case, compressed wage growth and extreme cost-cutting. I mean shit, Dimon ripped out all of JPMs Bloomberg terminals. Work happiness at banks are much lower and people are leaving, save for at certain types of banks. The profits are just coming from employees. Overtime is a lot lower to non-existent in right to work states and you'll pull 10-30 hours over what you signed on for on a weekly basis. If you're not aware of what capital requirements are then I really can't dive into this. I suggest you read up on Basel 3, the US system, liquidity cover ratio (LCR) and then understand generally what products yield more and the risks attached to those. If you do know those then I feel like you know where my response is going, but I'm happy to get into it more.",
"title": ""
},
{
"docid": "6eedb8b3a548304873c6b918427e73ff",
"text": "1. It is difficult. There is no formal process outside of undergrad and MBA programs to easily gain access to interviews. At your level, its mostly about connections. If willing to start near bottom, go to your business school and start applying to bank associate programs. Sounds like you would like sales and trading more than M&A, so focus there. 2. If you got in at associate level, you would do 1-3 months of training and then get assigned a desk. Finance going through a tough time right now, so trajectory isn't what it used to be. Expect to be a VP after 2-4 years, then its all dependent on luck and skill. 3. If you land a job at a top 15 bank, you should be making total comp of 150k or more after the first year. Salaries not quite at 150k, but most VPS make over 150k salary, not to mention bigger bonus's. 4. If you did M&A you would be working very serious hours. If you go into Sales and Trading your hours will be anywhere from 40 to 60 hours a week depending on the desk. Trading hours tend to be the shortest. 5. Boston isn't a hot bed for i-banking finance. NYC, London, Sing, Hong Kong tend to be the places to be. I know nobody in Boston that could help.",
"title": ""
},
{
"docid": "b3acc09fce33e69930d2bf14ced64bb7",
"text": "If I recall correctly, the pay schedule is such that you initially pay mostly interest. As James Roth suggests, look at the terms of the loan, specifically the payment schedule. It should detail how much is being applied to interest and how much to the actual balance.",
"title": ""
},
{
"docid": "b34e2439a9f44c22a850283d5c149372",
"text": "Well this was an interesting read, but sadly no one has given me anything I asked for. I'm not complaining, as I didn't expect a complete stranger to actually tell me how much they make, but I figured it'd be worth a try. Anyway, I'm gonna assume that you work in NY? If so, what were your starting hours like (approx) and also, do you work as a quant, cause it seems (correct me if I'm wrong) that you're describing an I-Banking job. Also, if you feel comfortable, a starting salary would be helpful as well. I'm trying to get real figures here cause everyone that I ask tells me something different. Finally, I haven't completely taken NY off the table as an option, I would just prefer Toronto if it's possible.",
"title": ""
},
{
"docid": "2c3d7b59ca106038b1a81c3921835bac",
"text": "Its kind of a dumb question because no one believes that you can earn 8% in the short term in the market, but for arguments sake the math is painfully easy. Keep in mind I am an engineer not a finance guy. So the first payment will earn you one month at 8%, the second, two. In effect three months at 8% on 997. You can do it that way because the payments are equal: 997 * (.08 /12) *3 = earnings ~= 20 So with the second method you pay: 997 * 3 - 20 = 2971",
"title": ""
},
{
"docid": "b81de540cdfeeeff4df6230aa637214e",
"text": "Questions: When you say feds inject money into the system, what do you mean? What system? the commercial banks? Or Government so they can pay govt salaries? And can commercial banks such as chase, bofa create money out of thin air regardless of FED(and i dont mean by frac reserve either)?? Meaning giving out credit cards, or lending money they don't have. Coz it seems banks don't need to have savings in the bank to lend/create debt money. M2 increase regardless to M1 or Mbase money proves that. there needs to be a federal govt nationalized franchise of utilty banks to compete with commercial banks. let com banks speculate, and average conservative savers go bank with the nationalized utility banks.",
"title": ""
},
{
"docid": "e34f7867d97d29fb0c5f4a1dd9144dc3",
"text": "In my experience, even if you are invaluable to the company, you won't be dutifully compensated or recognized. It is very rare that a company has a good enough performance assessment system that actually measures this with any measure of accuracy. The end result is that the only people compensated are those that make themselves close to management, AKA Brown Noses...",
"title": ""
},
{
"docid": "526bc7b18ef95d6807cad2ecda7b09ab",
"text": "If you participate, you will either get some money or some other renumeration. If you do not participate, you will not get anything. The only risk of participating is that if you have suffered actual damages, the settlement may under-compensate you. By significant, I mean thousands of dollars, since bringing suit yourself would be very expensive. Unless you can demonstrate that you have suffered from significant damages as a result of MBNA's bad behavior, joining the class to get whatever you are going to get is almost certainly a no-brainer decision.",
"title": ""
},
{
"docid": "e00600b8c9b513bf47e9ac9b44d2d07a",
"text": "To give you an idea, HBS will often do interviews at McKinsey offices. Accounting has nothing to do with what we're talking about and the pay grades are completely different. A partner at KPMG or PWC is going to make as much as some 5 years out in a good investment bank.",
"title": ""
},
{
"docid": "f930e2acd54e77a50bd76e526a3cad35",
"text": "\"Question: Does a billion dollars make you 1,000 times more happy than a million dollars? Answer: It doesn't. What counts is not the amount of money, but the subjective improvement that it makes to your life. And that improvement isn't linear, which is way the expected value of the inrease in your happiness / welfare / wellbeing is negative. The picture changes if you consider that by buying a ticket you can tell yourself for one week \"\"next week I might be a billionaire\"\". What you actually pay for is not the expected value of the win, but one week of hope of becoming rich.\"",
"title": ""
}
] |
fiqa
|
223d263e6e89bcf300de43d1bbd896bd
|
Is it smarter to buy a small amount of an ETF every 2 or 3 months, instead of monthly?
|
[
{
"docid": "b611ab7be380f386dbf483a0cc9637eb",
"text": "I personally invest in 4 different ETFs. I have $1000 to invest every month. To save on transaction costs, I invest that sum in only one ETF each month, the one that is most underweight at the time. For example, I invest in XIC (30%), VTI (30%), VEA (30%), and VWO (10%). One month, I'll buy XIC, next month VTA, next month, VEA, then XIC again. Eventually I'll buy VWO when it's $1000 underweight. If one ETF tanks, I may buy it twice in a row to reach my target allocation, or if it shoots up, I may skip buying it for a while. My actual asset allocation never ends up looking exactly like the target, but it trends towards it. And I only pay one commission a month. If this is in a tax-sheltered account (main TFSA or RRSP), another option is to invest in no-load index mutual funds that match the ETFs each month (assuming there's no commission to buy them). Once they reach a certain amount, sell and buy the equivalent ETFs. This is not a good approach in a non-registered account because you will have to pay tax on any capital gains when selling the mutual funds.",
"title": ""
},
{
"docid": "4d852c52b7861c2ea92f12f79e72212a",
"text": "By not timing the market and being a passive investor, the best time to invest is the moment you have extra money (usually when wages are received). The market trends up. $10 fee on $2000 represents 0.5% transaction cost, which is borderline prohibitive. I would suggest running simulations, but I suspect that 1 month is the best because average historical monthly total return is more than 0.5%.",
"title": ""
},
{
"docid": "e6d3eca19328b083b8a1a91f52924c39",
"text": "Note, the main trade off here is the costs of holding cash rather than being invested for a few months vs trading costs from trading every month. Let's start by understanding investing every month vs every three months. First compare holding cash for two months (at ~0% for most Canadians right now) and then investing on the third month vs being invested in a single stock etf (~5% annually?). At those rates she is forgoing equity returns of around These costs and the $10 for one big trade give total costs of $16+$8+$10=$34 dollars. If you were to trade every month instead there would be no cost for not being invested and the trading costs over three months would just be 3*$10=$30. So in this case it would be better to trade monthly instead of every three months. However, I'm guessing you don't trade all $2000 into a single etf. The more etfs you trade the more trading more infrequently would be an advantage. You can redo the above calculations spliting the amount across more etfs and including the added trading costs to get a feel for what is best. You can also rotate as @Jason suggests but that can leave you unbalanced temporarily if not done carefully. A second option would be to find a discount broker that allows you to trade the etfs you are interested in for free. This is not always possible but often will be for those investing in index funds. For instance I trade every month and have no brokerage costs. Dollar cost averaging and value averaging are for people investing a single large amount instead of regular monthly amounts. Unless the initial amount is much much larger than the monthly amounts this is probably not worth considering. Edit: Hopefully the above edits will clarify that I was comparing the costs (including the forgone returns) of trading every 3 months vs trading every month.",
"title": ""
}
] |
[
{
"docid": "b0d6167a19d4ea85bd2890867de5a6ac",
"text": "This is not hypothetical, this is an accurate story. I am a long-term investor. I have a bunch of money that I'd like to invest and I plan on spreading it out over five or six mutual funds and ETFs, roughly according to the Canadian Couch Potato model portfolio (that is, passive mutual funds and ETFs rather than specific stocks). I am concerned that if I invest the full amount and the stock market crashes 30% next month, I will have paid more than I had to. As I am investing for the long term, I expect to more than regain my investment, but I still wouldn't be thrilled with paying 30% more than I had to. Instead, I am investing my money in three stages. I invested the first third earlier this month. I'll invest the next third in a few months, and the final third a few months after that. If the stock market climbs, as I expect is more likely the case, I will have lost out on some potential upside. However, if the stock market crashes next month, I will end up paying a lower average cost as two of my three purchases will occur after the crash. On average, as a long-term investor, I expect the stock market to go up. In the short term, I expect much more fluctuation. Statistically speaking, I'd do better to invest all the money at once as most of the time, the trend is upward. However, I am willing to trade some potential upside for a somewhat reduced risk of downside over the course of the next few months. If we were talking a price difference of 1% as mentioned in the question, I wouldn't care. I expect to see average annual returns far above this. But stock market crashes can cause the loss of 20 to 30% or more, and those are numbers I care about. I'd much rather buy in at 30% less than the current price, after all.",
"title": ""
},
{
"docid": "699cc6e9542068712bf23b3cc1e56b16",
"text": "\"If you are like most people, your timing is kind of awful. What I mean by most, is all. Psychologically we have strong tendencies to buy when the market is high and avoid buying when it is low. One of the easiest to implement strategies to avoid this is Dollar Cost Averaging. In most cases you are far better off making small investments regularly. Having said that, you may need to \"\"save\"\" a bit in order to make subsequent investments because of minimums. For me there is also a positive psychological effect of putting money to work sooner and more often. I find it enjoyable to purchase shares of a mutual fund or stock and the days that I do so are a bit better than the others. An added benefit to doing regular investing is to have them be automated. Many wealthy people describe this as a key to success as they can focused on the business of earning money in their chosen profession as opposed to investing money they have already earned. Additionally the author of I will Teach You to be Rich cites this as a easy, free, and key step in building wealth.\"",
"title": ""
},
{
"docid": "ec247f0c4dd08895e0d66bc032d9b8b1",
"text": "The key two things to consider when looking at similar/identical ETFs is the typical (or 'indicative') spread, and the trading volume and size of the ETF. Just like regular stocks, thinly traded ETF's often have quite large spreads between buy and sell: in the 1.5-2%+ range in some cases. This is a huge drain if you make a lot of transactions and can easily be a much larger concern than a relatively trivial difference in ongoing charges depending on your exact expected trading frequency. Poor spreads are also generally related to a lack of liquidity, and illiquid assets are usually the first to become heavily disconnected from the underlying in cases where the authorized participants (APs) face issues. In general with stock ETFs that trade very liquid markets this has historically not been much of an issue, as the creation/redemption mechanism on these types of assets is pretty robust: it's consequences on typical spread is much more important for the average retail investor. On point #3, no, this would create an arbitrage which an authorized participant would quickly take advantage of. Worth reading up about the creation and redemption mechanism (here is a good place to start) to understand the exact way this happens in ETFs as it's very key to how they work.",
"title": ""
},
{
"docid": "0f5a70f95e5116b2bace5ba67275d86f",
"text": "You miss the step where the return being doubled is daily. Consider you invested $100 today, went up 10%, and tomorrow you went down 10%. Third day market went up 1.01% and without leverage - got even. Here's the calculation for you: day - start - end 1 $100 $120 - +10% doubled 2 $120 $96 - -10% doubled 3 $96 $97.94 - +1.01% doubled So in fact you're in $2.06 loss, while without leveraging you would break even. That means that if the trend is generally positive, but volatile - you'll end up barely breaking even while the non-leveraged investment would make profits. That's what the quote means. edit to summarize the long and fruitless discussion in the comments: The reason that the leveraged ETF's are very good for day-trading is exactly the same reason why they are bad for continuous investment. You should buy them when there's a reasonable expectation for the market to immediately go in the direction you expect. If for whatever reason you believe the markets will plunge, or soar, tomorrow - you should buy a leveraged ETF, ride the plunge, and sell it in the end of the day. But you asked the question about volatile markets, not markets going in one direction. There - you lose.",
"title": ""
},
{
"docid": "a0b6e828cc624c4765047924ac4790ed",
"text": "\"First: what's your risk tolerance? How long is your investment going to last? If it's a short-term investment (a few years) and you expect to break even (or better) then your risk tolerance is low. You should not invest much money in stocks, even index funds and \"\"defensive\"\" stocks. If, however, you're looking for a long-term investment which you will put money into continually over the next 30 years, the amount of stock you purchase at any given time is pretty small, so the money you might lose by timing the market wrong will also be rather small. Also, you probably do a remarkably poor job of knowing when to buy stocks. If you actually knew how to time the market to materially improve your risk-adjusted returns, you've missed your calling; you should be making six figures or more on Wall Street. :)\"",
"title": ""
},
{
"docid": "9b120328813deca9d848fd3cb63a1698",
"text": "\"The technical term for it is \"\"timing the market\"\" and if you can pull it off correctly, you will do quite well. The problem is that it is almost impossible to consistently do well. If it were that easy there would be a lot of billionaires walking around. Even Wall street experts haven't been able to predict the market that well. This idea is almost universally considered a bad idea. Consider this: When has the stock dropped low enough that you are \"\"buying low\"\" and let's say you do buy low and it doubles in a month. When do you get out? What if you are wrong and it doubles again? Or if it drops 10% do you keep waiting? This strategy is rife with problems.\"",
"title": ""
},
{
"docid": "61e52ca579011dffa82ad775f51ad39f",
"text": "Some liquidity Since you're using IB, and you seem to be an investor not a trader, so you won't notice especially if you walk your orders, but you will suffer the bid/ask spread as everyone else albeit wider. If buying, the best strategy unless if one is time constrained is to walk the entire bid from the best bid to the best ask. It is highly likely that someone will hit your order before you hit the best ask. If they don't, as a long term investor, the few pennies won't make or break you, especially if the price per share is 100 USD equivalent, but it is an excellent habit to form and fun. Since you're buying ETFs, even though your orders are small, you would be adding liquidity to your market, helping it become more efficient because your orders could be used to arbitrage against all of the ETF's holdings, in turn providing liquidity for those holdings. No liquidity This could only be done with an extremely low cost broker like IB because the trading commissions would make it prohibitively expensive. There are huge risks when trading an illiquid security such as VEUR. EWL would be much less risky thus less expensive. Securities with no liquidity can be traded, but they must be traded very carefully. In the case of a security that can only attract about 20 shares per day in volume, only single shares should be bid. The market makers, suffering from a dearth in volume may not even be willing to haggle; therefore, the only recourse is a statistical arbitrageur, who will attempt to profit from the spread between other more liquid versions of the security. Considering the available alternative, VEUR is not recommended to trade.",
"title": ""
},
{
"docid": "6b7485e54f14bda079a021ac233b0c0d",
"text": "I think that assuming that you're not looking to trade the fund, an index Mutual Fund is a better overall value than an ETF. The cost difference is negligible, and the ability to dollar-cost average future contributions with no transaction costs. You also have to be careful with ETFs; the spreads are wide on a low-volume fund and some ETFs are going more exotic things that can burn a novice investor. Track two similar funds (say Vanguard Total Stock Market: VTSMX and Vanguard Total Stock Market ETF: VTI), you'll see that they track similarly. If you are a more sophisticated investor, ETFs give you the ability to use options to hedge against declines in value without having to incur capital gains from the sale of the fund. (ie. 20 years from now, can use puts to make up for short-term losses instead of selling shares to avoid losses) For most retail investors, I think you really need to justify using ETFs versus mutual funds. If anything, the limitations of mutual funds (no intra-day trading, no options, etc) discourage speculative behavior that is ultimately not in your best interest. EDIT: Since this answer was written, many brokers have begun offering a suite of ETFs with no transaction fees. That may push the cost equation over to support Index ETFs over Index Mutual Funds, particularly if it's a big ETF with narrow spreads..",
"title": ""
},
{
"docid": "32e71fb321d39a1fceb84c0481f32a5c",
"text": "Put £50 away as often as possible, and once it's built up to £500, invest in a stockmarket ETF. Repeat until you retire.",
"title": ""
},
{
"docid": "6dbb192aac9096a004b081e5518c1263",
"text": "There are a few ETFs that fall into the money market category: SHV, BIL, PVI and MINT. What normally looks like an insignificant expense ratio looks pretty big when compared to the small yields offered by these funds. The same holds for the spread and transaction fees. For that reason, I'm not sure if the fund route is worth it.",
"title": ""
},
{
"docid": "aa3e84867601957ef5b60a40bf9e86b3",
"text": "I would buy an ETF (or maybe a couple) in stable, blue chip companies with a decent yield (~3%) and then I'd play a conservative covered call strategy on the stock selling a new position about once a month. That's just me.",
"title": ""
},
{
"docid": "f80d9a431b8948855b61d2febb1ae832",
"text": "Most ETFs are index funds, meaning you get built in diversification so that any one stock going down won't hurt the overall performance much. You can also get essentially the same index funds by directly purchasing them from the mutual fund company. To buy an ETF you need a brokerage account and have to pay a transaction fee. Buying only $1000 at a time the broker transaction fee will eat too much of your money. You want to keep such fees way down below 0.1%. Pay attention to transaction fees and fund expense ratios. Or buy an equivalent index fund directly from the mutual fund company. This generally costs nothing in transaction fees if you have at least the minimum account value built up. If you buy every month or two you are dollar cost averaging, no matter what kind of account you are using. Keep doing that, even if the market values are going down. (Especially if the market values are going down!) If you can keep doing this then forget about certificates of deposit. At current rates you cannot build wealth with CDs.",
"title": ""
},
{
"docid": "3ca2a36926c308393a021d671a4ad8ff",
"text": "\"You mentioned three concepts: (1) trading (2) diversification (3) buy and hold. Trading with any frequency is for people who want to manage their investments as a hobby or profession. You do not seem to be in that category. Diversification is a critical element of any investment strategy. No matter what you do, you should be diversified. All the way would be best (this means owning at least some of every asset out there). The usual way to do this is to own a mutual or index fund. Or several. These funds own hundreds or thousands of stocks, so that buying the fund instantly diversifies you. Buy and hold is the only reasonable approach to a portfolio for someone who is not interested in spending a lot of time managing it. There's no reason to think a buy-and-hold portfolio will underperform a typical traded portfolio, nor that the gains will come later. It's the assets in the portfolio that determine how aggressive/risky it is, not the frequency with which it is traded. This isn't really a site for specific recommendations, but I'll provide a quick idea: Buy a couple of index funds that cover the whole universe of investments. Index funds have low expenses and are the cheapest/easiest way to diversify. Buy a \"\"total stock market\"\" fund and a \"\"total bond fund\"\" in a ratio that you like. If you want, also buy an \"\"international fund.\"\" If you want specific tickers and ratios, another forum would be better(or just ask your broker or 401(k) provider). The bogleheads forum is one that I respect where people are very happy to give and debate specific recommendations. At the end of the day, responsibly managing your investment portfolio is not rocket science and shouldn't occupy a lot of time or worry. Just choose a few funds with low expenses that cover all the assets you are really interested in, put your money in them in a reasonable-ish ratio (no one knows that the best ratio is) and then forget about it.\"",
"title": ""
},
{
"docid": "20d869fbaf5a89639daf406217465b24",
"text": "A general rule of thumb is to avoid having more than 5% of your investments in any single stock, to avoid excessive risk; it's usually even more risky if you're talking company stock because an adverse event could result in an inferior stock price and you getting laid off. Under other circumstances, the ideal amount of company stock is probably 0%. But there are tax benefits to waiting, as you've noted, and if you're reasonably confident that the stock isn't likely to jerk around too much, and you have a high risk tolerance (i.e. lots of extra savings besides this), and you're comfortable shouldering the risk of losing some money, it might make sense to hold onto the stock for a year - but never any longer. The real risk to holding a lot of company stock doesn't depend on how often you buy it and sell it per se, but having period purchases every month should make it easier for you to ladder the funds, and regularly sell your old shares as you purchase new shares. You might also consider a stop-loss order on the stock at or near the price you purchased it at. If the stock is at $100, then you buy at $85, and then the stock drops to $85, there are no more outstanding tax benefits and it makes no sense to have it as part of your portfolio instead of any other speculative instrument - you probably get better diversification benefits with any other speculative instrument, so your risk-adjusted returns would be higher.",
"title": ""
},
{
"docid": "8e6b3ccc88372faf54375ebaed55528a",
"text": "A 15% discount is a 17.6% return. (100/85 = 1.176). For a holding period that's an average 15.5 days, a half month. It would be silly to compound this over a year as the numbers are limited. The safest way to do this is to sell the day you are permitted. In effect, you are betting, 12 times a year, that the stock won't drop 15% in 3 days. You can pull data going back decades, or as long as your company has been public, and run a spreadsheet to see how many times, if at all, the stock has seen this kind of volatility over 3 day periods. Even for volatile stocks, a 15% move is pretty large, you're likely to find your stock doing this less than once per year. It's also safest to not accumulate too many shares of your company for multiple reasons, having to do with risk spreading, diversification, etc. 2 additional points - the Brexit just caused the S&P to drop 4% over the last 3 days trading. This was a major world event, but, on average we are down 4%. One would have to be very unlucky to have their stock drop 15% over the specific 3 days we are discussing. The dollars at risk are minimal. Say you make $120K/yr. $10K/month. 15% of this is $1500 and you are buying $1765 worth of stock. The gains, on average are expected to be $265/mo. Doesn't seem like too much, but it's $3180 over a years' time. $3180 in profit for a maximum $1500 at risk at any month's cycle.",
"title": ""
}
] |
fiqa
|
41636fdb6bd2eea6ff7b7b10f5bd11e8
|
What cost basis accounting methods are applicable to virtual currencies?
|
[
{
"docid": "7272c31978e10ac0038691e7e9e1f605",
"text": "\"The only \"\"authoritative document\"\" issued by the IRS to date relating to Cryptocurrencies is Notice 2014-21. It has this to say as the first Q&A: Q-1: How is virtual currency treated for federal tax purposes? A-1: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. That is to say, it should be treated as property like any other asset. Basis reporting the same as any other property would apply, as described in IRS documentation like Publication 550, Investment Income and Expenses and Publication 551, Basis of Assets. You should be able to use the same basis tracking method as you would use for any other capital asset like stocks or bonds. Per Publication 550 \"\"How To Figure Gain or Loss\"\", You figure gain or loss on a sale or trade of property by comparing the amount you realize with the adjusted basis of the property. Gain. If the amount you realize from a sale or trade is more than the adjusted basis of the property you transfer, the difference is a gain. Loss. If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. That is, the assumption with property is that you would be using specific identification. There are specific rules for mutual funds to allow for using average cost or defaulting to FIFO, but for general \"\"property\"\", including individual stocks and bonds, there is just Specific Identification or FIFO (and FIFO is just making an assumption about what you're choosing to sell first in the absence of any further information). You don't need to track exactly \"\"which Bitcoin\"\" was sold in terms of exactly how the transactions are on the Bitcoin ledger, it's just that you bought x bitcoins on date d, and when you sell a lot of up to x bitcoins you specify in your own records that the sale was of those specific bitcoins that you bought on date d and report it on your tax forms accordingly and keep track of how much of that lot is remaining. It works just like with stocks, where once you buy a share of XYZ Corp on one date and two shares on another date, you don't need to track the movement of stock certificates and ensure that you sell that exact certificate, you just identify which purchase lot is being sold at the time of sale.\"",
"title": ""
}
] |
[
{
"docid": "ca5d202b93c164af5f61d58a5cd0aa01",
"text": "Here's what the GnuCash documentation, 10.5 Tracking Currency Investments (How-To) has to say about bookkeeping for currency exchanges. Essentially, treat all currency conversions in a similar way to investment transactions. In addition to asset accounts to represent holdings in Currency A and Currency B, have an foreign exchange expenses account and a capital gains/losses account (for each currency, I would imagine). Represent each foreign exchange purchase as a three-way split: source currency debit, foreign exchange fee debit, and destination currency credit. Represent each foreign exchange sale as a five-way split: in addition to the receiving currency asset and the exchange fee expense, list the transaction profit in a capital gains account and have two splits against the asset account of the transaction being sold. My problems with this are: I don't know how the profit on a currency sale is calculated (since the amount need not be related to any counterpart currency purchase), and it seems asymmetrical. I'd welcome an answer that clarifies what the GnuCash documentation is trying to say in section 10.5.",
"title": ""
},
{
"docid": "af3575f1faff6c617daffd493faa8815",
"text": "Lets look at possible use cases: If you ever converted your cryptocurrency to cash on a foreign exchange, then **YES** you had to report. That means if you ever daytraded and the US dollar (or other fiat) amount was $10,000 or greater when you went out of crypto, then you need to report. Because the regulations stipulate you need to report over $10,000 at any point in the year. If you DID NOT convert your cryptocurrency to cash, and only had them on an exchange's servers, perhaps traded for other cryptocurrency pairs, then NO this did not fall under the regulations. Example, In 2013 I wanted to cash out of a cryptocurrency that didn't have a USD market in the United States, but I didn't want to go to cash on a foreign exchange specifically for this reason (amongst others). So I sold my Litecoin on BTC-E (Slovakia) for Bitcoin, and then I sold the Bitcoin on Coinbase (USA). (even though BTC-E had a Litecoin/USD market, and then I could day trade the swings easily to make more capital gains, but I wanted cash in my bank account AND didn't want the reporting overhead). Read the regulations yourself. Financial instruments that are reportable: Cash (fiat), securities, futures and options. Also, http://www.bna.com/irs-no-bitcoin-n17179891056/ whether it is just in the blockchain or on a server, IRS and FINCEN said bitcoin is not reportable on FBAR. When they update their guidance, it'll be in the news. The director of FinCEN is very active in cryptocurrency developments and guidance. Bitcoin has been around for six years, it isn't that esoteric and the government isn't that confused on what it is (IRS and FinCEN's hands are tied by Congress in how to more realistically categorize cryptocurrency) Although at this point in time, there are several very liquid exchanges within the United States, such as the one NYSE/ICE hosts (Coinbase).",
"title": ""
},
{
"docid": "890e8e0a93a34ffc61874715ecaac7a2",
"text": "\"You say you want a more \"\"stable\"\" system. Recall from your introductory economics courses that money has three roles: a medium of exchange (here is $, give me goods), a unit of account (you owe me $; the business made $ last year), and a store of value (I have saved $ for the future!). I assume that you are mostly concerned with the store-of-value role being eroded due to inflation. But first consider that most people still want regular currency, so as a medium of exchange or accounting unit anything would face an uphill battle. If you discard that role for your currency, and only want to store value with it, you could just buy equities and commodities and baskets of currencies and debt in a brokerage account (possibly using mutual funds) to store your value. Trillions of dollars' worth of business takes place this way every year already. Virtual currency was a bit of a dot-com bubble thing. The systems which didn't go completely bust and are still around have been beset by money-laundering, and otherwise remain largely an ignored niche. An online fiat currency has the same basic problem that another currency has. You need to trust the central bank not to create more money and cause inflation (or even just abscond with the funds... or go bankrupt / get sued). Perhaps the Federal Reserve may be jerking us around on that front right now.... they're still a lot more believable than a small private institution. Some banks might possibly be trustworthy enough to launch a currency, but it's hard to see why they'd bother (it can't be a big profit center, because people aren't willing to pay too much to just use money.) And an online currency that's backed by commodities (e.g. gold) is going to be subject to potentially violent swings in the prices of commodities. Imagine getting a loan out for your house, denominated in terms of e-gold, and then the price of gold triples. Ouch?\"",
"title": ""
},
{
"docid": "0ff87b4504eaa0cf33d2b696582f47ef",
"text": "\"I think the \"\"right\"\" way to approach this is for your personal books and your business's books to be completely separate. You would need to really think of them as separate things, such that rather than being disappointed that there's no \"\"cross transactions\"\" between files, you think of it as \"\"In my personal account I invested in a new business like any other investment\"\" with a transfer from your personal account to a Stock or other investment account in your company, and \"\"This business received some additional capital\"\" which one handles with a transfer (probably from Equity) to its checking account or the like. Yes, you don't get the built-in checks that you entered the same dollar amount in each, but (1) you need to reconcile your books against reality anyway occasionally, so errors should get caught, and (2) the transactions really are separate things from each entity's perspective. The main way to \"\"hack it\"\" would be to have separate top-level placeholder accounts for the business's Equity, Income, Expenses, and Assets/Liabilities. That is, your top-level accounts would be \"\"Personal Equity\"\", \"\"Business Equity\"\", \"\"Personal Income\"\", \"\"Business Income\"\", and so on. You can combine Assets and Liabilities within a single top-level account if you want, which may help you with that \"\"outlook of my business value\"\" you're looking for. (In fact, in my personal books, I have in the \"\"Current Assets\"\" account both normal things like my Checking account, but also my credit cards, because once I spend the money on my credit card I want to think of the money as being gone, since it is. Obviously this isn't \"\"standard accounting\"\" in any way, but it works well for what I use it for.) You could also just have within each \"\"normal\"\" top-level placeholder account, a placeholder account for both \"\"Personal\"\" and \"\"My Business\"\", to at least have a consistent structure. Depending on how your business is getting taxed in your jurisdiction, this may even be closer to how your taxing authorities treat things (if, for instance, the business income all goes on your personal tax return, but on a separate form). Regardless of how you set up the accounts, you can then create reports and filter them to include just that set of business accounts. I can see how just looking at the account list and transaction registers can be useful for many things, but the reporting does let you look at everything you need and handles much better when you want to look through a filter to just part of your financial picture. Once you set up the reporting (and you can report on lists of account balances, as well as transaction lists, and lots of other things), you can save them as Custom Reports, and then open them up whenever you want. You can even just leave a report tab (or several) open, and switch to it (refreshing it if needed) just like you might switch to the main Account List tab. I suspect once you got it set up and tried it for a while you'd find it quite satisfactory.\"",
"title": ""
},
{
"docid": "b3ff2d91d58df55f959c18195cd1b5d0",
"text": "As BrenBarn stated, tracking fractional transactions beyond 8 decimal places makes no sense in the context of standard stock and mutual fund transactions. This is because even for the most expensive equities, those fractional shares would still not be worth whole cent amounts, even for account balances in the hundreds of thousands of dollars. One important thing to remember is that when dealing with equities the total cost, number of shares, and share price are all 3 components of the same value. Thus if you take 2 of those values, you can always calculate the third: (price * shares = cost, cost / price = shares, etc). What you're seeing in your account (9 decimal places) is probably the result of dividing uneven values (such as $9.37 invested in a commodity which trades for $235.11, results in 0.03985368550891072264046616477394 shares). Most brokerages will round this value off somewhere, yours just happens to include more decimal places than your financial software allows. Since your brokerage is the one who has the definitive total for your account balance, the only real solution is to round up or down, whichever keeps your total balance in the software in line with the balance shown online.",
"title": ""
},
{
"docid": "6057489b63d4a6078034e2f58b3fe5f7",
"text": "I'm not sure, but I think the monetary system of Second Life or World of Warcraft would correspond to what you are looking for. I don't think they are independent of the dollar though, since acquiring liquidity in those games can be done through exchange for real dollars. But there can be more closed systems, maybe Sim type games where this is not the case. I hope this helps.",
"title": ""
},
{
"docid": "db751b9cc469f547550a323044b23d8e",
"text": "For manual conversion you can use many sites, starting from google (type 30 USD in yuan) to sites like xe.com mentioned here. For programmatic conversion, you could use Google Calculator API or many other currency exchange APIs that are available. Beware however that if you do it on the real site, the exchange rate is different from actual rates used by banks and payment processing companies - while they use market-based rates, they usually charge some premium on currency conversion, meaning that if you have something for 30 dollars, according to current rate it may bet 198 yuan, but if he uses a credit card for purchase, it may cost him, for example, 204 yuan. You should be very careful about making difference between snapshot market rates and actual rates used in specific transaction.",
"title": ""
},
{
"docid": "ff6db88144e4c3dbec7e59ade40ecefc",
"text": "Using a different cost basis than your broker's reporting is NOT a problem. You need to keep your own records to account for this difference. Among the other many legitimate reasons to adjust your cost basis, the most popular is when you have two brokerage accounts and sell an asset in one then buy in another. This is called a Wash Sale and is not a taxable event for you. However from the perspective of each broker with their limited information you are making a transaction with tax implications and their reported 1099 will show as such. Links: https://www.firstinvestors.com/docs/pdf/news/tax-qa-2012.pdf",
"title": ""
},
{
"docid": "3200217e7939b7c9eb0a82e4a1124feb",
"text": "Here is the technical guidance from the accounting standard FRS 23 (IAS 21) 'The Effects of Changes in Foreign Exchange Rates' which states: Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognised in profit or loss in the period in which they arise. An example: You agree to sell a product for $100 to a customer at a certain date. You would record the sale of this product on that date at $100, converted at the current FX rate (lets say £1:$1 for ease) in your profit loss account as £100. The customer then pays you several $100 days later, at which point the FX rate has fallen to £0.5:$1 and you only receive £50. You would then have a realised loss of £50 due to exchange differences, and this is charged to your profit and loss account as a cost. Due to double entry bookkeeping the profit/loss on the FX difference is needed to balance the journals of the transaction. I think there is a little confusion as to what constitutes a (realised) profit/loss on exchange difference. In the example in your question, you are not making any loss when you convert the bitcoins to dollars, as there is no difference in the exchange rate between the point you convert them. Therefore you have not made either a profit or a loss. In terms of how this effects your tax position; you only pay tax on your profit and loss account. The example I give above is an instance where an exchange difference is recorded to the P&L. In your example, the value of your cash held is reflected in your balance sheet, as an asset, whatever its value is at the balance sheet date. Unfortunately, the value of the asset can rise/fall, but the only time where you will record a profit/loss on this (and therefore have an impact on tax) is if you sell the asset.",
"title": ""
},
{
"docid": "9c7310340478610eea3f1d4b154baaf6",
"text": "\"As far as I can tell there are no \"\"out-of-the-box\"\" solutions for this. Nor will Moneydance or GnuCash give you the full solution you are looking for. I imaging people don't write a well-known, open-source, tool that will do this for fear of the negative uses it could have, and the resulting liability. You can roll-you-own using the following obscure tools that approximate a solution: First download the bank's CSV information: http://baruch.ev-en.org/proj/gnucash.html That guy did it with a perl script that you can modify. Then convert the result to OFX for use elsewhere: http://allmybrain.com/2009/02/04/converting-financial-csv-data-to-ofx-or-qif-import-files/\"",
"title": ""
},
{
"docid": "9758a5c6885e6ddfe6022e9eb530ab12",
"text": "\"According to the following article the answer is \"\"first-in, first-out\"\": http://smallbusiness.chron.com/calculate-cost-basis-stock-multiple-purchases-21588.html According to the following article the last answer was just one option an investor can choose: https://www.usaa.com/inet/pages/advice-investing-costbasis?akredirect=true\"",
"title": ""
},
{
"docid": "8568a818f3a0c4a7473017be99a53d48",
"text": "\"I found an answer by Peter Selinger, in two articles, Tutorial on multiple currency accounting (June 2005, Jan 2011) and the accompanying Multiple currency accounting in GnuCash (June 2005, Feb 2007). Selinger embraces the currency neutrality I'm after. His method uses \"\"[a]n account that is denominated as a difference of multiple currencies... known as a currency trading account.\"\" Currency trading accounts show the gain or loss based on exchange rates at any moment. Apparently GnuCash 2.3.9 added support for multi-currency accounting. I haven't tried this myself. This feature is not enabled by default, and must be turned on explicity. To do so, check \"\"Use Trading Accounts\"\" under File -> Properties -> Accounts. This must be done on a per-file basis. Thanks to Mike Alexander, who implemented this feature in 2007, and worked for over 3 years to convince the GnuCash developers to include it. Older versions of GnuCash, such as 1.8.11, apparently had a feature called \"\"Currency Trading Accounts\"\", but they behaved differently than Selinger's method.\"",
"title": ""
},
{
"docid": "f469aad776f005ed531a025b282f05ad",
"text": "This is great! I'm not a CPA, but work in finance. As such, my course/professional work is focused more on the economic and profitability aspects of transfer pricing. As you might imagine, it tended to analyze corporate strategy decisions under various cost allocation models, which you thoroughly discuss. I would agree with the statement that it is based on the matching principle but would like to add that transfer pricing is interesting as it falls under several fields: accounting, finance, and economics. Fundamentally it is based on the matching principal, but it's real world applications are based on all three (it's often used to determine divisional and even individual sales peoples profitability; as is the case with bank related funds transfer pricing on stuff like time deposits). In this case, the correct accounting principal allows you to, when done properly, better understand the economics, strategy, and operations of an organization. In effect, when done correctly, it provides transparency for strategic decision making to executives. As I said, since my coursework tended to focus more on that aspect, I definitely have a natural tendency towards it. This is an amazing explanation (esp. about interest on M&A bridge loans, I get that) of the more detailed stuff! Truthfully, I'm not as familiar with it and was just trying to show more of the conceptual than nitty-gritty. Thanks for the reply!",
"title": ""
},
{
"docid": "3e6282fb122d5582ccfa8b6a505152c3",
"text": "\"Stocks, as an asset, represent the sum of the current market value of all of your holdings. If your portfolio is showing unrealized gains and losses, then that net amount is inherently reflected in the current market value of your holdings. That's not to say cost basis is not important. Any closed trades, realized gains or losses, will of course have an impact on your taxable income. So, it couldn't hurt to keep track of your cost basis from a tax standpoint, but understand that the term \"\"asset\"\" refers to the current market values and does not consider base amounts. Taxes do. Perhaps consider making separate cells for cost basis, but also bear in mind that most if not all of the major online discount brokers will provide transferring of cost basis information electronically to the major online tax service providers.\"",
"title": ""
},
{
"docid": "e4f3cdc40f6813b9e28e7ef4024c433d",
"text": "You just explained why I'm boggled that some companies an individuals are willing to utilize such an erratic currency for exchanges. I tried using it as a payment method in my previous services company, but was understanding most people wouldn't and that it could potentially be loss for myself. Which on a smaller scale isn't really a issue, but scale up to some of the larger companies and it could be devastating. It's an entirely speculative market that could depreciate returns quickly.",
"title": ""
}
] |
fiqa
|
f6550cba69bf8757a207033593f65fa0
|
Exchange rate $ ETF,s
|
[
{
"docid": "505ca7e221596c6b8fd0ab08c320d875",
"text": "Your assumption that funds sold in GBP trade in GBP is incorrect. In general funds purchase their constituent stocks in the fund currency which may be different to the subscription currency. Where the subscription currency is different from the fund currency subscriptions are converted into the fund currency before the extra money is used to increase holdings. An ETF, on the other hand, does not take subscriptions directly but by creation (and redemption) of shares. The principle is the same however; monies received from creation of ETF shares are converted into the fund currency and then used to buy stock. This ensures that only one currency transaction is done. In your specific example the fund currency will be USD so your purchase of the shares (assuming there are no sellers and creation occurs) will be converted from GBP to USD and held in that currency in the fund. The fund then trades entirely in USD to avoid currency risk. When you want to sell your exposure (supposing redemption occurs) enough holdings required to redeem your money are sold to get cash in USD and then converted to GBP before paying you. This means that trading activity where there is no need to convert to GBP (or any other currency) does not incur currency conversion costs. In practice funds will always have some cash (or cash equivalents) on hand to pay out redemptions and will have an idea of the number and size of redemptions each calendar period so will use futures and swaps to mitigate FX risk. Where the same firm has two funds traded in different currencies with the same objectives it is likely that one is a wrapper for the other such that one simply converts the currency and buys the other currency denominated ETF. As these are exchange traded funds with a price in GBP the amount you pay for the ETF or gain on selling it is the price given and you will not have to consider currency exchange as that should be done internally as explained above. However, there can be a (temporary) arbitrage opportunity if the price in GBP does not reflect the price in USD and the exchange rate put together.",
"title": ""
}
] |
[
{
"docid": "d37d9a994626f347749725d7d6066a17",
"text": "With the disclaimer that I am not a technician, I'd answer yes, it does. SPY (for clarification, an ETF that reflects the S&P 500 index) has dividends, and earnings, therefore a P/E and dividend yield. It would follow that the tools technicians use, such as moving averages, support and resistance levels also apply. Keep in mind, each and every year, one can take the S&P stocks and break them up, into quintiles or deciles based on return and show that not all stock move in unison. You can break up by industry as well which is what the SPDRs aim to do, and observe the movement of those sub-groups. But, no, not all the stocks will perform the way the index is predicted to. (Note - If a technician wishes to correct any key points here, you are welcome to add a note, hopefully, my answer was not biased)",
"title": ""
},
{
"docid": "7a2e015368c0e58fe28b560c29c9ef5f",
"text": "\"Ask your trading site for their definition of \"\"ETF\"\". The term itself is overloaded/ambiguous. Consider: If \"\"ETF\"\" is interpreted liberally, then any fund that trades on a [stock] exchange is an exchange-traded fund. i.e. the most literal meaning implied by the acronym itself. Whereas, if \"\"ETF\"\" is interpreted more narrowly and in the sense that most market participants might use it, then \"\"ETF\"\" refers to those exchange-traded funds that specifically have a mechanism in place to ensure the fund's current price remains close to its net asset value. This is not the case with closed-end funds (CEFs), which often trade at either a premium or a discount to their underlying net asset value.\"",
"title": ""
},
{
"docid": "66b6d7651ba92fdc726761af5e89c6f9",
"text": "\"I made an investing mistake many (eight?) years ago. Specifically, I invested a very large sum of money in a certain triple leveraged ETF (the asset has not yet been sold, but the value has decreased to maybe one 8th or 5th of the original amount). I thought the risk involved was the volatility--I didn't realize that due to the nature of the asset the value would be constantly decreasing towards zero! Anyhow, my question is what to do next? I would advise you to sell it ASAP. You didn't mention what ETF it is, but chances are you will continue to lose money. The complicating factor is that I have since moved out of the United States and am living abroad (i.e. Japan). I am permanent resident of my host country, I have a steady salary that is paid by a company incorporated in my host country, and pay taxes to the host government. I file a tax return to the U.S. Government each year, but all my income is excluded so I do not pay any taxes. In this way, I do not think that I can write anything off on my U.S. tax return. Also, I have absolutely no idea if I would be able to write off any losses on my Japanese tax return (I've entrusted all the family tax issues to my wife). Would this be possible? I can't answer this question but you seem to be looking for information on \"\"cross-border tax harvesting\"\". If Google doesn't yield useful results, I'd suggest you talk to an accountant who is familiar with the relevant tax codes. Are there any other available options (that would not involve having to tell my wife about the loss, which would be inevitable if I were to go the tax write-off route in Japan)? This is off topic but you should probably have an honest conversation with your wife regardless. If I continue to hold onto this asset the value will decrease lower and lower. Any suggestions as to what to do? See above: close your position ASAP For more information on the pitfalls of leveraged ETFs (FINRA) What happens if I hold longer than one trading day? While there may be trading and hedging strategies that justify holding these investments longer than a day, buy-and-hold investors with an intermediate or long-term time horizon should carefully consider whether these ETFs are appropriate for their portfolio. As discussed above, because leveraged and inverse ETFs reset each day, their performance can quickly diverge from the performance of the underlying index or benchmark. In other words, it is possible that you could suffer significant losses even if the long-term performance of the index showed a gain.\"",
"title": ""
},
{
"docid": "73f0f5884654654b0658b3caef2f0620",
"text": "You will most likely not be able to avoid some form of format conversion, regardless of which data you use since there is, afaik, no standard for this data and everyone exports it differently. One viable option would be, like you said yourself, using the free data provided by Dukascopy. Please take into consideration that those are spot currency rates and will most likely not represent the rate at which physical and business-related exchange would have happened at this time.",
"title": ""
},
{
"docid": "5bfedbdd63f74534043d2d59fcef16b4",
"text": "Like others have said, mutual funds don't have an intraday NAV, but their ETF equivalents do. Use something like Yahoo Finance and search for the ETF.IV. For example VOO.IV. This will give you not the ETF price (which may be at a premium or discount), but the value of the underlying securities updated every 15 seconds.",
"title": ""
},
{
"docid": "5c00f8c665e4ec0b23f34c604d02a242",
"text": "\"Without going into minor details, an FX transaction works essentially like this. Let's assume you have SEK 100 on your account. If you buy 100 USD/RUB at 1.00, then that transaction creates a positive cash balance on your account of USD 100 and a negative cash balance (an overdraft) of RUB 100. So right after the transaction (assuming there is not transaction cost), the \"\"net equity\"\" of your account is: 100 SEK + 100 USD - 100 RUB = 100 + 100 - 100 = 100 SEK. Let's say that, the day after, the RUB has gone down by 10% and the RUB 100 is now worth SEK 90 only. Your new equity is: 100 SEK + 100 USD - 100 RUB = 100 + 100 - 90 = 110 SEK and you've made 10%(*): congrats! Had you instead bought 100 SEK/RUB, the result would have been the same (assuming the USD/SEK rate constant). In practice the USD/SEK rate would probably not be constant and you would need to also account for: (*) in your example, the USD/RUB has gone up 10% but the RUB has gone down 9.09%, hence the result you find. In my example, the RUB has gone down 10% (i.e. the USD has gone up 11%).\"",
"title": ""
},
{
"docid": "3623cb3175230cdde8f3cf5abed78175",
"text": "\"Following comments to your question here, you posted a separate question about why SPY, SPX, and the options contract don't move perfectly together. That's here Why don't SPY, SPX, and the e-mini s&p 500 track perfectly with each other? I provided an answer to that question and will build on it to answer what I think you're asking on this question. Specifically, I explained what it means that these are \"\"all based on the S&P.\"\" Each is a different entity, and different market forces keep them aligned. I think talking about \"\"technicals\"\" on options contracts is going to be too confusing since they are really a very different beast based on forward pricing models, so, for this question, I'll focus on only SPY and SPX. As in my other answer, it's only through specific market forces (the creation / redemption mechanism that I described in my other answer), that they track at all. There's nothing automatic about this and it has nothing to do with some issuer of SPY actually holding stock in the companies that comprise the SPX index. (That's not to say that the company does or doesn't hold, just that this doesn't drive the prices.) What ever technical signals you're tracking, will reflect all of the market forces at play. For SPX (the index), that means some aggregate behavior of the component companies, computed in a \"\"mathematically pure\"\" way. For SPY (the ETF), that means (a) the behavior of SPX and (b) the behavior of the ETF as it trades on the market, and (c) the action of the authorized participants. These are simply different things. Which one is \"\"right\"\"? That depends on what you want to do. In theory you might be able to do some analysis of technical signals on SPY and SPX and, for example, use that to make money on the way that they fail to track each other. If you figure out how to do that, though, don't post it here. Send it to me directly. :)\"",
"title": ""
},
{
"docid": "9ea59d67dcb34045c7694a346a08d840",
"text": "SeekingAlpha has a section dedicated to Short ETFs as well as others. In there you will find SH, and SDS. Both of which are inverse to the S&P 500. Edit: I linked to charts that compare SH and SDS to SPY.",
"title": ""
},
{
"docid": "43dc85864d4e91c60c56b2e9969d2747",
"text": "You have stumbled upon a classic trading strategy known as the carry trade. Theoretically you'd expect the exchange rate to move against you enough to make this a bad investment. In reality this doesn't happen (on average). There are even ETFs that automate the process for you (and get better transaction costs and lending/borrowing rates than you ever could): DBV and ICI.",
"title": ""
},
{
"docid": "bccb1b02a9eed71eb46edafd42e96639",
"text": "Do you have a good reason for keeping a US bank account? If not, I would close it and transfer to your Canadian bank account just to simplify your life. Unless you are investing on the scale of George Soros you shouldn't be worrying too much about exchange rates.",
"title": ""
},
{
"docid": "9e424bb3b0e7f90e3c589ee4b3890f1e",
"text": "\"When you hold units of the DLR/DLR.U (TSX) ETF, you are indirectly holding U.S. dollars cash or cash equivalents. The ETF can be thought of as a container. The container gives you the convenience of holding USD in, say, CAD-denominated accounts that don't normally provide for USD cash balances. The ETF price ($12.33 and $12.12, in your example) simply reflects the CAD price of those USD, and the change is because the currencies moved with respect to each other. And so, necessarily, given how the ETF is made up, when the value of the U.S. dollar declines vs. the Canadian dollar, it follows that the value of your units of DLR declines as quoted in Canadian dollar terms. Currencies move all the time. Similarly, if you held the same amount of value in U.S. dollars, directly, instead of using the ETF, you would still experience a loss when quoted in Canadian dollar terms. In other words, whether or not your U.S. dollars are tied up either in DLR/DLR.U or else sitting in a U.S. dollar cash balance in your brokerage account, there's not much of a difference: You \"\"lose\"\" Canadian dollar equivalent when the value of USD declines with respect to CAD. Selling, more quickly, your DLR.U units in a USD-denominated account to yield U.S. dollars that you then directly hold does not insulate you from the same currency risk. What it does is reduce your exposure to other cost/risk factors inherent with ETFs: liquidity, spreads, and fees. However, I doubt that any of those played a significant part in the change of value from $12.33 to $12.12 that you described.\"",
"title": ""
},
{
"docid": "90b990119812669ab920916a9ac08514",
"text": "\"When you invest in an S&P500 index fund that is priced in USD, the only major risk you bear is the risk associated with the equity that comprises the index, since both the equities and the index fund are priced in USD. The fund in your question, however, is priced in EUR. For a fund like this to match the performance of the S&P500, which is priced in USD, as closely as possible, it needs to hedge against fluctuations in the EUR/USD exchange rate. If the fund simply converted EUR to USD then invested in an S&P500 index fund priced in USD, the EUR-priced fund may fail to match the USD-priced fund because of exchange rate fluctuations. Here is a simple example demonstrating why hedging is necessary. I assumed the current value of the USD-priced S&P500 index fund is 1,600 USD/share. The exchange rate is 1.3 USD/EUR. If you purchase one share of this index using EUR, you would pay 1230.77 EUR/share: If the S&P500 increases 10% to 1760 USD/share and the exchange rate remains unchanged, the value of the your investment in the EUR fund also increases by 10% (both sides of the equation are multiplied by 1.1): However, the currency risk comes into play when the EUR/USD exchange rate changes. Take the 10% increase in the price of the USD index occurring in tandem with an appreciation of the EUR to 1.4 USD/EUR: Although the USD-priced index gained 10%, the appreciation of the EUR means that the EUR value of your investment is almost unchanged from the first equation. For investments priced in EUR that invest in securities priced in USD, the presence of this additional currency risk mandates the use of a hedge if the indexes are going to track. The fund you linked to uses swap contracts, which I discuss in detail below, to hedge against fluctuations in the EUR/USD exchange rate. Since these derivatives aren't free, the cost of the hedge is included in the expenses of the fund and may result in differences between the S&P500 Index and the S&P 500 Euro Hedged Index. Also, it's important to realize that any time you invest in securities that are priced in a different currency than your own, you take on currency risk whether or not the investments aim to track indexes. This holds true even for securities that trade on an exchange in your local currency, like ADR's or GDR's. I wrote an answer that goes through a simple example in a similar fashion to the one above in that context, so you can read that for more information on currency risk in that context. There are several ways to investors, be they institutional or individual, can hedge against currency risk. iShares offers an ETF that tracks the S&P500 Euro Hedged Index and uses a over-the-counter currency swap contract called a month forward FX contract to hedge against the associated currency risk. In these contracts, two parties agree to swap some amount of one currency for another amount of another currency, at some time in the future. This allows both parties to effectively lock in an exchange rate for a given time period (a month in the case of the iShares ETF) and therefore protect themselves against exchange rate fluctuations in that period. There are other forms of currency swaps, equity swaps, etc. that could be used to hedge against currency risk. In general, two parties agree to swap one quantity, like a EUR cash flow, payments of a fixed interest rate, etc. for another quantity, like a USD cash flow, payments based on a floating interest rate, etc. In many cases these are over-the-counter transactions, there isn't necessarily a standardized definition. For example, if the European manager of a fund that tracks the S&P500 Euro Hedged Index is holding euros and wants to lock in an effective exchange rate of 1.4 USD/EUR (above the current exchange rate), he may find another party that is holding USD and wants to lock in the respective exchange rate of 0.71 EUR/USD. The other party could be an American fund manager that manages a USD-price fund that tracks the FTSE. By swapping USD and EUR, both parties can, at a price, lock in their desired exchange rates. I want to clear up something else in your question too. It's not correct that the \"\"S&P 500 is completely unrelated to the Euro.\"\" Far from it. There are many cases in which the EUR/USD exchange rate and the level of the S&P500 index could be related. For example: Troublesome economic news in Europe could cause the euro to depreciate against the dollar as European investors flee to safety, e.g. invest in Treasury bills. However, this economic news could also cause US investors to feel that the global economy won't recover as soon as hoped, which could affect the S&P500. If the euro appreciated against the dollar, for whatever reason, this could increase profits for US businesses that earn part of their profits in Europe. If a US company earns 1 million EUR and the exchange rate is 1.3 USD/EUR, the company earns 1.3 million USD. If the euro appreciates against the dollar to 1.4 USD/EUR in the next quarter and the company still earns 1 million EUR, they now earn 1.4 million USD. Even without additional sales, the US company earned a higher USD profit, which is reflected on their financial statements and could increase their share price (thus affecting the S&P500). Combining examples 1 and 2, if a US company earns some of its profits in Europe and a recession hits in the EU, two things could happen simultaneously. A) The company's sales decline as European consumers scale back their spending, and B) the euro depreciates against the dollar as European investors sell euros and invest in safer securities denominated in other currencies (USD or not). The company suffers a loss in profits both from decreased sales and the depreciation of the EUR. There are many more factors that could lead to correlation between the euro and the S&P500, or more generally, the European and American economies. The balance of trade, investor and consumer confidence, exposure of banks in one region to sovereign debt in another, the spread of asset/mortgage-backed securities from US financial firms to European banks, companies, municipalities, etc. all play a role. One example of this last point comes from this article, which includes an interesting line: Among the victims of America’s subprime crisis are eight municipalities in Norway, which lost a total of $125 million through subprime mortgage-related investments. Long story short, these municipalities had mortgage-backed securities in their investment portfolios that were derived from, far down the line, subprime mortgages on US homes. I don't know the specific cities, but it really demonstrates how interconnected the world's economies are when an American family's payment on their subprime mortgage in, say, Chicago, can end up backing a derivative investment in the investment portfolio of, say, Hammerfest, Norway.\"",
"title": ""
},
{
"docid": "65a80f2facea4fe99eb9be9f03da3d0d",
"text": "Does the Spanish market, or any other market in euroland, have the equivalent of ETF's? If so there ought to be one that is based on something like the US S&P500 or Russell 3000. Otherwise you might check for local offices of large mutual fund companies such as Vanguard, Schwab etc to see it they have funds for sale there in Spain that invest in the US markets. I know for example Schwab has something for Swiss residents to invest in the US market. Do bear in mind that while the US has a stated policy of a 'strong dollar', that's not really what we've seen in practice. So there is substantial 'currency risk' of the dollar falling vs the euro, which could result in a loss for you. (otoh, if the Euro falls out of bed, you'd be sitting pretty.) Guess it all depends on how good your crystal ball is.",
"title": ""
},
{
"docid": "e6a3340c925cebe9771d4f0abb64fb8b",
"text": "When you want to invest in an asset denominated by a foreign currency, your investment is going to have some currency risk to it. You need to worry not just about what happens to your own currency, but also the foreign currency. Lets say you want to invest $10000 in US Stocks as a Canadian. Today that will cost you $13252, since USDCAD just hit 1.3252. You now have two ways you can make money. One is if USDCAD goes up, two is if the stocks go up. The former may not be obvious, but remember, you are holding US denominated assets currently, with the intention of one day converting those assets back into CAD. Essentially, you are long USDCAD (long USD short CAD). Since you are short CAD, if CAD goes up it hurts you It may seem odd to think about this as a currency trade, but it opens up a possibility. If you want a foreign investment to be currency neutral, you just make the opposite currency trade, in addition to your original investment. So in this case, you would buy $10,000 in US stocks, and then short USDCAD (ie long CAD, short USD $10,000). This is kind of savvy and may not be something you would do. But its worth mentioning. And there are also some currency hedged ETFs out there that do this for you http://www.ishares.com/us/strategies/hedge-currency-impact However most are hedged relative to USD, and are meant to hedge the target countries currency, not your own.",
"title": ""
},
{
"docid": "625a988bfb55940701a041358b283f3b",
"text": "Some of the ETFs you have specified have been delisted and are no longer trading. If you want to invest in those specific ETFs, you need to find a broker that will let you buy European equities such as those ETFs. Since you mentioned Merrill Edge, a discount broking platform, you could also consider Interactive Brokers since they do offer trading on the London Stock Exchange. There are plenty more though. Beware that you are now introducing a foreign exchange risk into your investment too and that taxation of capital returns/dividends may be quite different from a standard US-listed ETF. In the US, there are no Islamic or Shariah focussed ETFs or ETNs listed. There was an ETF (JVS) that traded from 2009-2010 but this had such little volume and interest, the fees probably didn't cover the listing expenses. It's just not a popular theme for North American listings.",
"title": ""
}
] |
fiqa
|
b612b280df9b9fab8bd5a6ba79225362
|
What's the best way to manage all the 401K accounts I've accumulated from my past jobs?
|
[
{
"docid": "f7a087bf6054e9cfbb8974156ad1255a",
"text": "I rolled mine over from the company I was at into my own brokerage house. You can't roll them into a Roth IRA, so I needed to setup a traditional IRA. There is paperwork your old jobs can provide you. I had to put in some mailing addresses, some account numbers and turn them in. My broker received it, I chose what I wanted to invest it in and that was that. No tax penalty or early withdrawal penalty. The key to avoiding penalties is to have your past employers send the money directly to another retirement fund, not send a check to you.",
"title": ""
},
{
"docid": "abedfb33f3b34c86677e9bbbec5b8e35",
"text": "\"Open an investment account on your own and have them roll the old 401K accounts into either a ROTH or traditional IRA. Do not leave them in old 401k accounts and definitely don't roll them into your new employer's 401K. Why? Well, as great as 401K accounts are, there is one thing that employers rarely mention and the 401K companies actively try to hide: Most 401K plans are loaded with HUGE fees. You won't see them on your statements, they are often hidden very cleverly with accounting tricks. For example, in several plans I have participated in, the mutual fund symbols may LOOK like the ones you see on the stock tickers, but if you read the fine print they only \"\"approximate\"\" the underlying mutual fund they are named for. That is, if you multiply the number of shares by the market price you will arrive at a number higher than the one printed on your statement. The \"\"spread\"\" between those numbers is the fee charged by the 401K management company, and since employees don't pick that company and can't easily fire them, they aren't very competitive unless your company is really large and has a tough negotiator in HR. If you work for a small company, you are probably getting slammed by these fees. Also, they often charge fees for the \"\"automatic rebalancing\"\" service they offer to do annually to your account to keep your allocation in line with your current contribution allocations. I have no idea why it is legal for them not to disclose these fees on the statements, but they don't. I had to do some serious digging to find this out on my own and when I did it was downright scary. In one case they were siphoning off over 3% annually from the account using this standard practice. HOWEVER, that is not to say that you shouldn't participate in these plans, especially if there is an employer match. There are fees with any investment account and the \"\"free money\"\" your employer is kicking in almost always offsets these fees. My point here is just that you shouldn't keep the money in the 401K after you leave the company when you have an option to move it to an account with much cheaper fees.\"",
"title": ""
},
{
"docid": "e0dc1f3824441ccaae695e29dcc7935f",
"text": "I'd roll them all into one account, just for your own convenience. It's a pain to keep track of lots of different accounts, esp. since you need logins/passwords, etc for all of them, and we all have plenty of those. :) Pick a place like Vanguard or Fidelity (for example), where you can find investment options with lower fees, and do the standard rollover. Once all the accounts are rolled into one, you can think about how to invest the stuff. (Some good investments require larger minimums, so if you have several old 401ks, putting them together will give you more options.) Rolling them over is not hard, if you have paperwork from each of the 401ks. You might be able to DIY online, but I found it helpful to call and talk to a person when I did this. You just need account numbers, etc. If you are moving brokerage accounts, you may need to provide paper documents/applications, which might require getting them notarized (I found a notary at my bank, even though the accounts I was moving from and to weren't at my bank), which means you'll need to provide IDs, etc. and get a special crimped seal after the notary witnesses your signature.",
"title": ""
}
] |
[
{
"docid": "fa9b83d82c951d0886a1830938e9b1d7",
"text": "You can get an investment manager through firms like Fidelity or E*Trade to manage your account. It won't be someone dedicated exclusively to you, but you're in the range where they'd take you as a managed account customer. Another option would be to get a financial planner (CFP or something) help you to identify your needs and figure out what your investments portfolio should look like. This is not a whole lot of money, but is definitely enough to have an early retirement if managed and invested properly.",
"title": ""
},
{
"docid": "058718c4ba38b0df9089d96f290571b4",
"text": "If you do not need the money in the 401k right away and are interested in avoiding penalties on the amounts accumulated, roll over the 401k monies into a Roth IRA (your contributions and growth thereof) and a Traditional IRA (company match a d growth thereof). You can choose to take out money from the Traditional IRA not as a lump sum (penalties in addition to lots of income tax in the year of taking the distribution) but as series of equal payments over your life expectancy (no penalty but US income tax is still due each year). Be aware that he who rides a tiger cannot dismount: if you opt for this method, you must take a distribution every year whether you need the money or not, and the amount of the distribution must match what the IRS wants you to take exactly; excess withdrawals lead to penalties etc. Publication 590 says Annuity. You can receive distributions from your traditional IRA that are part of a series of substantially equal payments over your life (or your life expectancy), or over the lives (or the joint life expectancies) of you and your beneficiary, without having to pay the 10% additional tax, even if you receive such distributions before you are age 59.5. You must use an IRS-approved distribution method and you must take at least one distribution annually for this exception to apply. The “required minimum distribution method,” when used for this purpose, results in the exact amount required to be distributed, not the minimum amount. Be aware that, depending on your country of residence/citizenship, you may be required to close all foreign accounts within x months of return, and if so, this stratagem will not work.",
"title": ""
},
{
"docid": "145343a75a2fe58a14959b7b88e14369",
"text": "You can take the old 401k and convert it to an IRA just about anywhere. No accountant required. Borrowing against the IRA/401k is a very stopgap measure, be sure you know what you are getting into. A distribution from it is a 10% penalty before age 59.5.",
"title": ""
},
{
"docid": "5dddeefab58515aa461298ae819ed1ce",
"text": "401k choices are awful because: The best remedy I have found is to roll over to an IRA when changing jobs.",
"title": ""
},
{
"docid": "7b2e8432ffa0c2ebae1abc87008fc1a2",
"text": "Ok, so if I have a 401k, when does it become mine? When I retire and start taking distributions from it? At that point, is the only thing I own what I actually take out or is the full balance mine? Who owns the 401k when I'm contributing? This is just raising more questions.",
"title": ""
},
{
"docid": "bf1033eef1d42a25a4a30f6972908d24",
"text": "\"Good question. And it depends a bit on your current plan, your future income, and the plan you are moving too. Mostly you want to roll out of your existing 401K. There will likely be a fee, and your investment choices are limited. You will want to do a direct transfer, and going with a quality company such as Fidelity or Vanguard. Both of those have zero fees for accounts and pretty good customer service. However, if your future income is likely to be high there is something else to consider. If you are over the limits do a ROTH, and are considering doing a \"\"Backdoor ROTH\"\" a key success for this strategy is keeping your roll over IRA balance low (or zero). So you may want to either leave the 401K where it is, or roll it to your new 401K plan. In that case you will have to call the two 401K custodians, and select the best choice as far as fees and fund choice.\"",
"title": ""
},
{
"docid": "f0e35575aa64bebb6e39286109ddf921",
"text": "\"Having worked for a financial company for years, my advice is to stay away from all the \"\"Freedom Funds\"\" offered. They're a new way for Fidelity to justify charging a higher management fee on those particular funds. That extra 1% or so a year is great for making the company money; it will kill your rate of return over the next 25+ years you're putting money into your retirement account. All these funds do is change the percentage of your funds in stocks vs. more fixed investments (bonds, etc.) so you have a higher percentage in stocks while you're young and slowly move the percentage more towards fixed as you get older. If you take a few hours every 5 years to re-balance your portfolio and just slowly shift more money towards fixed investments, you'll achieve the same thing WITHOUT the extra annual fee. So how much difference are we talking here? Let's do a quick example. Based on your salary of $70k and a 4% match by your company, you'll have $5,600 a year to put in your 401(k) (your 4% plus matched 4%). I'll also assume an 8% annual return for both funds. Here is what that 1% extra service charge will cost you: Fund with a 1% service charge: Annual Fee Paid Year 1 - $60.00 Annual Fee Paid Year 25 (assuming 8% growth in assets) - $301.00 Total Fees Year 1 through 25: $3,782 Fund with a 2% service charge: Annual Fee Paid Year 1 - $121.00 Annual Fee Paid Year 25 (assuming 8% growth in assets) - $472.00 Total Fees Year 1 through 25: $6,489 That's a total of $2,707 in extra fees over 25 years on just the investment you make this year! Next year if you invest the same amount in your 401k that will be another $2,707 paid over 25 years to the management company. This pattern repeats EACH year you pay the higher management fee. Trust me, if you invest that money in stock instead of paying it as fees, you'll have a whole lot more money saved when it's time to retire. My advice, pick a percentage you're comfortable with in stocks at your age, maybe 85 - 90%, and pick the stock funds with the lowest management fees (the remaining 10 - 15% should go into a fixed fund). Make sure you pick at least some of your stock money, I do 20 - 25%, and select a diverse (lots of different countries) international fund. For any retirement money you plan to save above the 4% getting matched by your company, set up a Roth IRA. That will give you the freedom to invest in any stocks or funds you want. Find some low-cost index funds (such as VTI for stocks, and BND for bonds) and put your money in those. Invest the same amount every month, automatically, and your cost average will work itself out through up markets and down. Good luck!\"",
"title": ""
},
{
"docid": "51a6649911adc53648eb9d541f711f6b",
"text": "Can't see why would you need to track the sources of the original funds. Can't think of a reason not to consolidate, if at all it will only make the management of your IRA more convenient, and may be even cheaper (if the fees depend on the account value...).",
"title": ""
},
{
"docid": "d03c8cf0a696a3e94fffbb7445bfd76c",
"text": "Yes you can rollover as many different 401ks into a single IRA account. I have done it personally and it really cuts down on the overhead of keeping up with lots of different accounts. Your brokerage or mutual fund company should be able to help you with it. If you are using a company that just gives you forms and those forms don't mention an easy way to combine. Then I suggest rolling over one 401k first then once that's finished you can rollover the other 401k into that same account.",
"title": ""
},
{
"docid": "c83c3c8b2f8c4da325a85e248e9fe717",
"text": "Question: My job that I've been with for 2 1/2 yrs offers a 401k, but doesn't match. I have an account, but it's still sitting with my old employer. The fact that my new job doesn't match and how I've heard so many mixed things about 401k has lead me to not signing up. I'm 40; I need to be doing something to save for retirement. Any advice would be appreciated. Should I invest in 401 anyway or put the money I was going to put in there someplace else? If someplace else, where? Also who would I talk to about money someplace else. I, admittedly, am really bad about all of this stuff, but need to change. My wife and I make 100k combined and should be getting things more together for our future. She has a 401k going, but that's about all we have. Thanks again",
"title": ""
},
{
"docid": "a29bec6d3af870f1e5a648819ca6ac7c",
"text": "One big pie chart. Traditional (pretax) 401(k) and IRA, Roth 401(k) and IRA, and non-tax favored accounts. All of these need to be viewed holistically, the non-favored money is where I'd keep cash/low return safe instruments, Roth IRA for highest growth.",
"title": ""
},
{
"docid": "568cdc8bc1ffceb1b886706a7fa2092e",
"text": "The first question is essentially asking for specific investment advice which is off-topic per the FAQ, but I'll take a stab at #2 and #3 (2) If my 401k doesn't change before I leave my job (not planned in the near future), I should roll it over into my Roth IRA after I leave due to these high expense ratios, correct? My advice is that you should roll over a 401K into an IRA the first chance you get (usually when you leave the job). 401K plans are NOTORIOUS for high expense ratios and why leave your money in a plan where you have a limited choice of investments anyway versus a self-directed IRA where you can invest in anything you want? (3) Should I still max contribute with these horrible expense ratios? If they are providing a match, yes. Even with the expense ratios it is hard to beat the immediate return of an employer match. If they aren't matching, the answer is still probably yes for a few reasons: You already are maxing out your ability to contribute to sheltered accounts, so assuming you still want to sock away that money for retirement, the tax benefits are still valuable and probably offset the expense ratios. Although you seem to be an exception, it is hard for most people to be disciplined enough to put money in a retirement account after they have it in their hands (versus auto-deduction from paychecks).",
"title": ""
},
{
"docid": "f5fb93b7a5cd0209d2b227983b37eb21",
"text": "Most people carry a diversity of stock, bond, and commodities in their portfolio. The ratio and types of these investments should be based on your goals and risk tolerance. I personally choose to manage mine through mutual funds which combine the three, but ETFs are also becoming popular. As for where you keep your portfolio, it depends on what you're investing for. If you're investing for retirement you are definitely best to keep as much of your investment as possible in 401k or IRAs (preferably Roth IRAs). Many advisers suggest contributing as much to your 401k as your company matches, then the rest to IRA, and if you over contribute for the IRA back to the 401k. You may choose to skip the 401k if you are not comfortable with the choices your company offers in it (such as only investing in company stock). If you are investing for a point closer than retirement and you still want the risk (and reward potential) of stock I would suggest investing in low tax mutual funds, or eating the tax and investing in regular mutual funds. If you are going to take money out before retirement the penalties of a 401k or IRA make it not worth doing. Technically a savings account isn't investing, but rather a place to store money.",
"title": ""
},
{
"docid": "51ec965a4eec4d21850e5055c1062b74",
"text": "\"This is an excellent topic as it impacts so many in so many different ways. Here are some thoughts on how the accounts are used which is almost as important as the as calculating the income or tax. The Roth is the best bang for the buck, once you have taken full advantage of employer matched 401K. Yes, you pay taxes upfront. All income earned isn't taxed (under current tax rules). This money can be passed on to family and can continue forever. Contributions can be funded past age 70.5. Once account is active for over 5 years, contributions can be withdrawn and used (ie: house down payment, college, medical bills), without any penalties. All income earned must be left in the account to avoid penalties. For younger workers, without an employer match this is idea given the income tax savings over the longer term and they are most likely in the lowest tax bracket. The 401k is great for retirement, which is made better if employer matches contributions. This is like getting paid for retirement saving. These funds are \"\"locked\"\" up until age 59.5, with exceptions. All contributed funds and all earnings are \"\"untaxed\"\" until withdrawn. The idea here is that at the time contributions are added, you are at a higher tax rate then when you expect to withdrawn funds. Trade Accounts, investments, as stated before are the used of taxed dollars. The biggest advantage of these are the liquidity.\"",
"title": ""
},
{
"docid": "c36b1a3c19a44acdf22acd904acbe658",
"text": "\"First, do you get charged a commission or other fee for reinvesting? Second, why would capital gains and dividends be grouped together? If the broker charges you for that run away. As Joe explained, it is done as a courtesy. Doesn't this mean if I sell the stock, the profit will be used to buy that stock right back? No, this is only the capital gains distributions of funds. Lastly, there are two additional checkbox options I was hoping somebody could explain: \"\"All equity positions currently held in this account\"\" and \"\"Future equity purchases, transfers, and deposits to this account\"\". \"\"All equity positions\"\" means your selection will be valid for all the positions you already have. \"\"Future positions\"\" means it will only affect future positions, not the ones you already have. For example: FOLLOW-UP: Looking around, some people suggest not doing this for taxable accounts because it complicates cost basis reporting. Is this a valid concern? Doesn't the brokerage handle that and send you the information when you sell the stock? Yes, because you end up with tons of positions and you need to track the cost basis for each. Brokers are required to report cost-basis on 1099-B now, so its less of a problem, but before 2011 you'd have 10's of positions each year (if you have a monthly dividend, for example) each with different cost basis, and you'd usually sell them all at once. Go figure the gain. So the new 1099-B reporting regulations help a little on this, but it only kicks in for everything starting of 2013 IIRC. Fortunately, for some investments (mutual funds, mainly) you may chose averaging, but it has drawbacks as well.\"",
"title": ""
}
] |
fiqa
|
82a74034c00fc5a8295ebc056f1ecc8c
|
How does cash ISA & share ISA mix together
|
[
{
"docid": "d02e60ef882ba479adeb86ca67e26799",
"text": "\"There are two different types of ISA; the \"\"Cash ISA\"\" for cash savings, and the \"\"Stocks and Shares ISA\"\" for stock market investing. You can transfer funds between these two different types of ISA. If your current cash ISA provider does not provide stocks and shares ISAs, then there may be a fee involved when transferring funds between two different providers. If I am reading your notation correctly, you have contributed the full allowance of GBP15,240 in both the current tax year and the previous tax year. Each year you can contribute GBP15,240 (currently) to your ISAs and this can be done in any combination of cash ISA and stocks and shares ISA. For example, you could put GBP5,240 into your cash ISA and GBP10,000 into your stocks and shares ISA. Regarding your questions : It is also important to understand that once you withdraw money from an ISA, it does not affect your previous contributions or allowances. For example, if you have used your full contribution allowance for the current year and chose to withdraw some funds, then you have still used your full contribution allowance and so you cannot redeposit these funds.\"",
"title": ""
}
] |
[
{
"docid": "c584ea3ef8b9b2732ccb1dfe350e2151",
"text": "The 'same day rule' in the UK is a rule for matching purposes only. It says that sales on any day are matched firstly with purchases made on the same day for the purposes of ascertaining any gain/loss. Hence the phrase 'bed-and-breakfast' ('b&b') when you wish to crystalise a gain (that is within the exempt amount) and re-establish a purchase price at a higher level. You do the sale on one day, just before the market closes, which gets matched with your original purchase, and then you buy the shares back the next day, just after the market opens. This is standard tax-planning. Whenever you have a paper gain, and you wish to lock that gain out of being taxed, you do a bed-and-breakfast transaction, the idea being to use up your annual exemption each and every year. Of course, if your dealing costs are high, then they may outweigh any tax saved, and so it would be pointless. For the purpose of an example, let's assume that the UK tax year is the same as the calendar year. Scenario 1. Suppose I bought some shares in 2016, for a total price of Stg.50,000. Suppose by the end of 2016, the holding is worth Stg.54,000, resulting in a paper gain of Stg.4,000. Question. Should I do a b&b transaction to make use of my Stg.11,100 annual exemption ? Answer. Well, with transaction costs at 1.5% for a round-trip trade, suppose, and stamp duty on the purchase of 0.5%, your total costs for a b&b will be Stg1,080, and your tax saved (upon some future sale date) assuming you are a 20% tax-payer is 20%x(4,000-1,080) = Stg584 (the transaction costs are deductible, we assume). This does not make sense. Scenario 2. The same as scenario 1., but the shares are worth Stg60,000 by end-2016. Answer. The total transaction costs are 2%x60,000 = 1,200 and so the taxable gain of 10,000-1,200 = 8,800 would result in a tax bill of 20%x8,800 = 1,760 and so the transaction costs are lower than the tax to be saved (a strict analysis would take into account only the present value of the tax to be saved), it makes sense to crystalise the gain. We sell some day before the tax year-end, and re-invest the very next day. Scenario 3. The same as scenario 1., but the shares are worth Stg70,000 by end-2016. Answer. The gain of 20,000 less costs would result in a tax bill for 1,500 (this is: 20%x(20,000 - 2%x70,000 - 11,100) ). This tax bill will be on top of the dealing costs of 1,400. But the gain is in excess of the annual exemption. The strategy is to sell just enough of the holding to crystallise a taxable gain of just 11,100. The fraction, f%, is given by: f%x(70,000-50,000) - 2%xf%x70,000 = 11,100 ... which simplifies to: f% = 11,100/18,600 = 59.68%. The tax saved is 20%x11,100 = 2,220, versus costs of 2%x59.58%x70,000 = 835.52. This strategy of partial b&b is adopted because it never makes sense to pay tax early ! End.",
"title": ""
},
{
"docid": "87f8e0738c74836e43eeeb1cf7f36494",
"text": "\"You will receive a combination of Verizon shares and cash whether you chose option B or C. Option B means that your \"\"Return of Value\"\" will be treated as capital - ie: as a capital gain. Option C means that your \"\"Return of Value\"\" will be treated as income - ie: as a dividend. As your ISA has favourable tax status, you don't end up paying any capital gain tax or income tax on dividend income. So it won't matter which option you chose.\"",
"title": ""
},
{
"docid": "2bc803125b38e57e3a516fb35db4cec8",
"text": "You can have a new ISA every financial year. As long as you don't take out any other ISA in the financial year that starts next week, you can use a help-to-buy ISA as your ISA for 2015/16. Existing ISAs taken out in earlier financial years will have no effect on that.",
"title": ""
},
{
"docid": "21d0c3dcd64ed588f9aa8af50c2612a9",
"text": "An ISA is a much simpler thing than I suspect you think it is. It is a wrapper or envelope, and the point of it is that HMRC does not care what happens inside the envelope, or even about extractions of funds from the envelope; they only care about insertions of funds into the envelope. It is these insertions that are limited to £15k in a tax year; what happens to the funds once they're inside the envelope is your own business. Some diagrams: Initial investment of £10k. This is an insertion into the envelope and so counts against your £15k/tax year limit. +---------ISA-------+ ----- £10k ---------> | +-------------------+ So now you have this: +---------ISA-------+ | £10k of cash | +-------------------+ Buy fund: +---------ISA-------+ | £10k of ABC | +-------------------+ Fund appreciates. This happens inside the envelope; HMRC don't care: +---------ISA-------+ | £12k of ABC | +-------------------+ Sell fund. This happens inside the envelope; HMRC don't care: +---------ISA-------+ | £12k of cash | +-------------------+ Buy another fund. This happens inside the envelope; HMRC don't care: +---------ISA-----------------+ | £10k of JKL & £2k of cash | +-----------------------------+ Fund appreciates. This happens inside the envelope; HMRC don't care: +---------ISA-----------------+ | £11k of JKL & £2k of cash | +-----------------------------+ Sell fund. This happens inside the envelope; HMRC don't care: +---------ISA-------+ | £13k of cash | +-------------------+ Withdraw funds. This is an extraction from the envelope; HMRC don't care. +---------ISA-------+ <---- £13k --------- | +-------------------+ No capital gains liability, you don't even have to put this on your tax return (if applicable) - your £10k became £13k inside an ISA envelope, so HMRC don't care. Note however that for the rest of that tax year, the most you can insert into an ISA would now be £5k: +---------ISA-------+ ----- £5k ---------> | +-------------------+ even though the ISA is empty. This is because the limit is to the total inserted during the year.",
"title": ""
},
{
"docid": "3f19942416d82aad508dc98501458cb1",
"text": "Your assumption, the need for two distinct accounts is correct. Are you sure that the deposit was made to the same account? Since a 401(k) doesn't really have an account number, just your social security number, it may be they report it to you as though it were aggregated, but it's improper for it to be so. With respect (I mean this literally, I have the utmost respect) to littleadv's answer - the aggregation of the two accounts cannot be legitimate. If I wish to invest my Roth side into investments that grow far greater than the Traditional side, the mixing of accounts destroys this possibility. Something is either wrong, or misunderstood.",
"title": ""
},
{
"docid": "df450ca9fb60253f13a367e895a67cb9",
"text": "Yes, this is fine: You can save up to £20,000 in one type of account or split the allowance across some or all of the other types. You can only pay £4,000 into your Lifetime ISA in a tax year ... Example You could save £11,000 in a cash ISA, £2,000 in a stocks and shares ISA, £3,000 in an innovative finance ISA and £4,000 in a Lifetime ISA in one tax year. https://www.gov.uk/individual-savings-accounts/how-isas-work You might want to consider whether it is wise to be fully invested in shares. If you're going to have to dip into them for things like holidays and a car, you're taking a risk that you might have to sell when the market is low. As a basic rate taxpayer, you have a £1 000 personal savings allowance. You don't need to chase the tax break with a cash ISA, which often have poor rates. However, you should consider keeping some of your savings in cash, for example in a current account that pays decent interest on the balance.",
"title": ""
},
{
"docid": "aa3a2243e87a82d00d77e93c0a719519",
"text": "First I assume you are resident for tax purposes in the UK? 1 Put 2000 in a cash ISA as an emergency fund. 2 Buy shares in 2 or 3 of the big generalist Investment trusts as they have low charges and long track records – unless your a higher rate tax payer don’t buy the shares inside the ISA its not worth it You could use FTSE 100 tracker ETF's or iShares instead of Investment Trusts.",
"title": ""
},
{
"docid": "f9af95c9e297aa2aaeedac907c3ab5ed",
"text": "It is allowed to transfer money between ISAs however you like in one year. It does not count against the limit for how much you can pay into an ISA in a year, nor does it count as paying into two ISAs in the same year. But make sure you transfer the money. Don't withdraw it, then pay it into a new ISA. If your provider doesn't like you taking money out of one ISA while keeping another, then it's about time you found another provider.",
"title": ""
},
{
"docid": "e7777b222351bc03f73b9c5d9a640863",
"text": "Your asset mix should reflect your own risk tolerance. Whatever the ideal answer to your question, it requires you to have good timing, not once, but twice. Let me offer a personal example. In 2007, the S&P hit its short term peak at 1550 or so. As it tanked in the crisis, a coworker shared with me that he went to cash, on the way down, selling out at about 1100. At the bottom, 670 or so, I congratulated his brilliance (sarcasm here) and as it passed 1300 just 2 years later, again mentions how he must be thrilled he doubled his money. He admitted he was still in cash. Done with stocks. So he was worse off than had he held on to his pre-crash assets. For sake of disclosure, my own mix at the time was 100% stock. That's not a recommendation, just a reflection of how my wife and I were invested. We retired early, and after the 2013 excellent year, moved to a mix closer to 75/25. At any time, a crisis hits, and we have 5-6 years spending money to let the market recover. If a Japanesque long term decline occurs, Social Security kicks in for us in 8 years. If my intent wasn't 100% clear, I'm suggesting your long term investing should always reflect your own risk tolerance, not some short term gut feel that disaster is around the corner.",
"title": ""
},
{
"docid": "5a9a5dcc1532513df50baedcb611b3ce",
"text": "Thanks for the answer/comments! The time-based method was something we mooted and something I almost went with. But just to wrap this up, the method we settled on was this: Every time there is an entry or exit into the fund, we divvy out any unrealised market profits/losses according to each person's profit share (based on % of the asset purchased at buy-in) JUST BEFORE the entry/exit. These realised profits are then locked in for those particpants, and then the unrealised profits/loss counter starts at zero, we do a fresh recalculation of shareholding after the entry/exit, and then we start again. Hope this helps anyone with the same issue!",
"title": ""
},
{
"docid": "f047a86a26ffe9decad612ab2b5ed4e0",
"text": "Note the above is only for shares. There are different rules for other assets like House, Jewellery, Mutual Funds, Debt Funds. Refer to the Income Tax guide for more details.",
"title": ""
},
{
"docid": "bc1e558425d3536d26b4dd208926dff9",
"text": "You can't actually transfer shares directly unless they were obtained as part of an employee share scheme - see the answers to questions 19 and 20 on this page: http://www.hmrc.gov.uk/isa/faqs.htm#19 Q. Can I put shares from my employee share scheme into my ISA? A. You can transfer any shares you get from into a stocks and shares component of an ISA without having to pay Capital Gains Tax - provided your ISA manager agrees to take them. The value of the shares at the date of transfer counts towards the annual limit. This means you can transfer up to £11,520 worth of shares in the tax year 2013-14 (assuming that you make no other subscriptions to ISAs, in those years). You must transfer the shares within 90 days from the day they cease to be subject to the Plan, or (for approved SAYE share option schemes) 90 days of the exercise of option date. Your employer should be able to tell you more. Q. Can I put windfall or inherited shares in my ISA? A. No. You can only transfer shares you own into an ISA if they have come from an employee share scheme. Otherwise, the ISA manager must purchase shares on the open market. The situation is the same if you have shares that you have inherited. You are not able to transfer them into an ISA.",
"title": ""
},
{
"docid": "c92b620796eec1aea3d8d925390cb015",
"text": "\"Your dec ision is actually rather more complex than it first appears. The problem is that the limits on what you can pay into the HTB ISA might make it less attractive - it will all depend. Currently, you can put £15k/year into a normal ISA (Either Cash, or Stocks and Share or a combination). The HTB ISA only allows £200/month = £2,400/year. Since you can only pay into one Cash ISA in any one year you are going to lose out on the other £12,600 that you could save and grow tax free. Having said that, the 25% contribution by the govt. is extremely attractive and probably outweighs any tax saving. It is not so clear whether you can contribute to a HTB ISA (cash) and put the rest of your allowance into a Stocks and Shares ISA - if you can, you should seriously consider doing so. Yes this exposes you to a riskier investment (shares can go down as well as up etc.) but the benefits can be significant (and the gains are tax free). As said above, the rules are that money you have paid into an ISA in earlier years is separate - you can't pay any more into the \"\"old\"\" one whilst paying into a \"\"new\"\" one but you don't have to do anything with the \"\"old\"\" ISA. But you might WANT to do something since institutions are amazingly mean (underhand) in their treatment of customers. You may well find that the interest rate you get on your \"\"old\"\" ISA becomes less competitive over time. You should (Must) check every year what rate you are getting and whether you can get a better rate in a different ISA - if there is a better rate ISA and if it allows transfers IN, you should arrange to make the trasnfer - you ABSOLUTELY MUST TRANSFER between ISAs - never even think of taking the money out and then trying to pay it in to another ISA, it must be transferred directly between ISAs. So overall, yes, stop paying into the \"\"old\"\" ISA, open a new HTB ISA next year and if you can pay in the maximum do so. But if you can afford to save more, you might be able to open a Stocks and Shares ISA as well and pay into that too (max £15k into the pair in one year). And then do not \"\"forget\"\" about the \"\"old\"\" ISA(s) you will probably need to move all the money you have in the \"\"old\"\" one(s) regualrly into new ISAs to obtain a sensible rate. You might do well to read up on all this a lot more - I strongly recommend the site http://www.moneysavingexpert.com/ which gives a lot of helpful advice about everything to do with money (no I don't have any association with them).\"",
"title": ""
},
{
"docid": "a2384963ed3c4bc5234386ab8f6ff4ab",
"text": "An investment trust is quoted just like a share. You just compare what you paid (your book cost) with its current share price, not the NAV, as a trust's price can be at a premium greater than the actual share price or a discount.",
"title": ""
},
{
"docid": "d5610e1b3aabcd6667baa0f09dbb5830",
"text": "Income and Capital are taxed separately in the uk. You probably can't get dividends paid gross even in ISA's you pay the basic rate of tax on dividends only higher rate tax payers get tax benefit from dividends. What you could do is invest in splits (Spilt capital investment trusts ) in the share class where all the return comes as capital and use up some of your yearly CGT allowance that way.",
"title": ""
}
] |
fiqa
|
6706a08de83519e7ed61cd39ea073ba0
|
If a mutual fund did really well last year, then statistically speaking, is it likely going to do bad this year?
|
[
{
"docid": "451a1147ad21efe2f898c5a001fd5c8a",
"text": "\"This can be answered by looking at the fine print for any prospectus for any stock, bond or mutual fund. It says: \"\"Past performance is not an indicator of future performance.\"\". A mutual fund is a portfolio of common stocks, managed by somebody for a fee. There are many factors that can drive performance of a fund up or down. Here are a few: I'm sure there are many more market influences that I cannot think of that push fund prices up or down. What the fund did last year is not one of them. If it were, making money in the mutual fund market would be as easy as investing in last year's winners and everyone would be doing it.\"",
"title": ""
},
{
"docid": "d10497d2ccd984e2f58e17332f779a50",
"text": "Nearly all long-lived active funds underperform the market over the long run. The best they can hope for in almost all cases is to approximate the market return. Considering that the market return is ~9%, this fund should be expected to do less well. In terms of predicting future performance, if its average return is greater than the average market return, its future average return can be expected to fall.",
"title": ""
},
{
"docid": "e73661e3b17aa7ca2d29a1cf8d4133db",
"text": "From a mathematical point of view the stats do not change depending on past performance. Just because a fund is lucky one year doesn't mean that it will be unlucky the next. Consider tossing a coin, the chance of heads is 50%. If you have just thrown 3 heads, the chance of heads is still 50%. It doesn't go down. If you throw 10 heads in a row the chance of a heads is still 50%, in fact you many suspect there is something odd about the coin, if it was an unfair coin then the chance of a heads would be higher than 50%. It could be the fund is better run, but there could be other reasons, including random chance. Some funds will randomly do better and some will randomly do worse What you do know is that if they did better than average other funds have done worse, at least for last year.",
"title": ""
}
] |
[
{
"docid": "148fe3c6b836d3b733d3f1f75a6f917a",
"text": "\"In the case of a specific fund, I'd be tempted to get get an annual report that would disclose distribution data going back up to 5 years. The \"\"View prospectus and reports\"\" would be the link on the site to note and use that to get to the PDF of the report to get the data that was filed with the SEC as that is likely what matters more here. Don't forget that mutual fund distributions can be a mix of dividends, bond interest, short-term and long-term capital gains and thus aren't quite as simple as stock dividends to consider here.\"",
"title": ""
},
{
"docid": "b657b0aaeb73a927b1064e620421854b",
"text": "So you're saying as long as they are always slightly up investors will be happy? I can believe that. Also, here is some evidence to support you. http://www.hedgeweek.com/2017/07/20/254194/hfr-reports-hedge-funds-allocations-beat-redemptions Though you have to admit negative returns must be especially hard to own to your investors when everything is up",
"title": ""
},
{
"docid": "5394995b18736e3123af489412bcab30",
"text": "\"My two cents: I am a pension actuary and see the performance of funds on a daily basis. Is it normal to see down years? Yes, absolutely. It's a function of the directional bias of how the portfolio is invested. In the case of a 401(k) that almost always mean a positive directional bias (being long). Now, in your case I see two issues: The amount of drawdown over one year. It is atypical to have a 14% loss in a little over a year. Given the market conditions, this means that you nearly experienced the entire drawdown of the SP500 (which your portfolio is highly correlated to) and you have no protection from the downside. The use of so-called \"\"target-date funds\"\". Their very implication makes no sense. Essentially, they try to generate a particular return over the elapsed time until retirement. The issue is that the market is by all statistical accounts random with positive drift (it can be expected to move up in the long term). This positive drift is due to the fact that people should be paid to take on risk. So if you need the money 20 years from now, what's the big deal? Well, the issue is that no one, and I repeat, no one, knows when the market will experience long down moves. So you happily experience positive drift for 20 years and your money grows to a decent size. Then, right before you retire, the market shaves 20%+ of your investments. Will you recoup these damages? Most likely yes. But will that be in the timeframe you need? The market doesn't care if you need money or not. So, here is my advice if you are comfortable taking control of your money. See if you can roll your money into an IRA (some 401(k) plans will permit this) or, if you contribute less that the 401(k) contribution limit you make want to just contribute to an IRA (be mindful of the annual limits). In this case, you can set up a self-directed account. Here you will have the flexibility to diversify and take action as necessary. And by diversify, I don't mean that \"\"buy lots of different stuff\"\" garbage, I mean focus on uncorrelated assets. You can get by on a handful of ETFs (SPY, TLT, QQQ, ect.). These all have liquid options available. Once you build a base, you can lower basis by writing covered calls against these positions. This is allowed in almost all IRA accounts. In my opinion, and I see this far too often, your potential and drive to take control of your assets is far superior than the so called \"\"professionals or advisors\"\". They will 99% of the time stick you in a target date fund and hope that they make their basis points on your money and retire before you do. Not saying everyone is unethical, but its hard to care about your money more than you will.\"",
"title": ""
},
{
"docid": "bff4b865a1719e435d5065a66da76fe1",
"text": "It means someone's getting paid too much. I'd check the sharpe ratio and compare that to similar funds along with their expense ratio. So in some scenarios it's not necessarily a bad thing but being informed is the important thing",
"title": ""
},
{
"docid": "afe6a50f6ffa99608a6aa9f1d64bd178",
"text": "Could somebody explain to me exactly why the writer doesn't think this is a win for passive investing? Aren't 'this could happen' statements only relevant to active managers so if you already believe that active investing is more successful than passive then of course you'll just fit this situation to 'there is still potential for major loss, the S&P has tanked x many times' because you believe that there are predictable patterns in markets while the passive investor says that isn't true.",
"title": ""
},
{
"docid": "5d7736255f034e29a930b7eab8d3047c",
"text": "\"Forecasts of stock market direction are not reliable, so you shouldn't be putting much weight on them. Long term, you can expect to do better in stocks, but obtaining this better expected return has the danger of \"\"buying in\"\" to the market at a particularly bad moment, leading to a substantially lower return. So mitigate that risk while moving in a big piece of cash by \"\"dollar cost averaging\"\". An example would be to divide your cash hoard (conceptually) into say six pieces, and invest each piece in the index fund two months apart. After a year you will have invested the whole sum at about the average of the index for the year.\"",
"title": ""
},
{
"docid": "cc4f2ceb7e54a35240e350b1fc1ff93a",
"text": "Terminology aside. Your gains for this year in a mutual fund do seem low. These are things that can be quickly, and precisely answered through a conversation with your broker. You can request info on the performance of the fund you are invested in from the broker. They are required to disclose this information to you. They can give you the performance of the fund overall, as well as break down for you the specific stocks and bonds that make up the fund, and how they are performing. Talk about what kind of fund it is. If your projected retirement date is far in the future your fund should probably be on the aggressive side. Ask what the historic average is for the fund you're in. Ask about more aggressive funds, or less if you prefer a lower average but more stable performance. Your broker should be able to adequately, and in most cases accurately, set your expectation. Also ask about fees. Good brokerages charge reasonable fees, that are typically based on the gains the fund makes, not your total investment. Make sure you understand what you are paying. Even without knowing the management fees, your growth this year should be of concern. It is exceptionally low, in a year that showed good gains in many market sectors. Speak with your broker and decide if you will stick with this fund or have your IRA invest in a different fund. Finally JW8 makes a great point, in that your fund may perform well or poorly over any given short term, but long term your average should fall within the expected range for the type of fund you're invested in (though, not guaranteed). MOST importantly, actually talk to your broker. Get real answers, since they are as easy to come by as posting on stack.",
"title": ""
},
{
"docid": "d551a112c05e7e4ad3cf68a202c506dc",
"text": "That is such a vague statement, I highly recommend disregarding it entirely, as it is impossible to know what they meant. Their goal is to convince you that index funds are the way to go, but depending on what they consider an 'active trader', they may be supporting their claim with irrelevant data Their definition of 'active trader' could mean any one or more of the following: 1) retail investor 2) day trader 3) mutual fund 4) professional investor 5) fund continuously changing its position 6) hedge fund. I will go through all of these. 1) Most retail traders lose money. There are many reasons for this. Some rely on technical strategies that are largely unproven. Some buy rumors on penny stocks in hopes of making a quick buck. Some follow scammers on twitter who sell newsletters full of bogus stock tips. Some cant get around the psychology of trading, and thus close out losing positions late and winning positions early (or never at all) [I myself use to do this!!]. I am certain 99% of retail traders cant beat the market, because most of them, to be frank, put less effort into deciding what to trade than in deciding what to have for lunch. Even though your pension funds presentation is correct with respect to retail traders, it is largely irrelevant as professionals managing your money should not fall into any of these traps. 2) I call day traders active traders, but its likely not what your pension fund was referring to. Day trading is an entirely different animal to long or medium term investing, and thus I also think the typical performance is irrelevant, as they are not going to manage your money like a day trader anyway. 3,4,5) So the important question becomes, do active funds lose 99% of the time compared to index funds. NO! No no no. According to the WSJ, actively managed funds outperformed passive funds in 2007, 2009, 2013, 2015. 2010 was basically a tie. So 5 out of 9 years. I dont have a calculator on me but I believe that is less than 99%! Whats interesting is that this false belief that index funds are always better has become so pervasive that you can see active funds have huge outflows and passive have huge inflows. It is becoming a crowded trade. I will spare you the proverb about large crowds and small doors. Also, index funds are so heavily weighted towards a handful of stocks, that you end up becoming a stockpicker anyway. The S&P is almost indistinguishable from AAPL. Earlier this year, only 6 stocks were responsible for over 100% of gains in the NASDAQ index. Dont think FB has a good long term business model, or that Gilead and AMZN are a cheap buy? Well too bad if you bought QQQ, because those 3 stocks are your workhorses now. See here 6) That graphic is for mutual funds but your pension fund may have also been including hedge funds in their 99% figure. While many dont beat their own benchmark, its less than 99%. And there are reasons for it. Many have investors that are impatient. Fortress just had to close one of its funds, whose bets may actually pay off years from now, but too many people wanted their money out. Some hedge funds also have rules, eg long only, which can really limit your performance. While important to be aware of this, that placing your money with a hedge fund may not beat a benchmark, that does not automatically mean you should go with an index fund. So when are index funds useful? When you dont want to do any thinking. When you dont want to follow market news, at all. Then they are appropriate.",
"title": ""
},
{
"docid": "8b4d4b2faa01a03c992d0834a7b6d2f1",
"text": "Stock index funds are likely, but not certainly, to be a good long-term investment. In countries other than the USA, there have been 30+ year periods where stocks either underperformed compared to bonds, or even lost value in absolute terms. This suggests that it may be an overgeneralization to assume that they always do well in the long term. Furthermore, it may suggest that they are persistently overvalued for the risk, and perhaps due for a long-term correction. (If everybody assumes they're safe, the equity risk premium is likely to be eaten up.) Putting all of your money into them would, for most people, be taking an unnecessary risk. You should cover some other asset classes too. If stocks do very well, a portfolio with some allocation to more stable assets will still do fairly well. If they crash, a portfolio with less risky assets will have a better chance of being at least adequate.",
"title": ""
},
{
"docid": "5d2b124795bc36a1421cb615e4b3ab19",
"text": "\"Can you easily stomach the risk of higher volatility that could come with smaller stocks? How certain are you that the funds wouldn't have any asset bloat that could cause them to become large-cap funds for holding to their winners? If having your 401(k) balance get chopped in half over a year doesn't give you any pause or hesitation, then you have greater risk tolerance than a lot of people but this is one of those things where living through it could be interesting. While I wouldn't be against the advice, I would consider caution on whether or not the next 40 years will be exactly like the averages of the past or not. In response to the comments: You didn't state the funds so I how I do know you meant index funds specifically? Look at \"\"Fidelity Low-Priced Stock\"\" for a fund that has bloated up in a sense. Could this happen with small-cap funds? Possibly but this is something to note. If you are just starting to invest now, it is easy to say, \"\"I'll stay the course,\"\" and then when things get choppy you may not be as strong as you thought. This is just a warning as I'm not sure you get my meaning here. Imagine that some women may think when having a child, \"\"I don't need any drugs,\"\" and then the pain comes and an epidural is demanded because of the different between the hypothetical and the real version. While you may think, \"\"I'll just turn the cheek if you punch me,\"\" if I actually just did it out of the blue, how sure are you of not swearing at me for doing it? Really stop and think about this for a moment rather than give an answer that may or may not what you'd really do when the fecal matter hits the oscillator. Couldn't you just look at what stocks did the best in the last 10 years and just buy those companies? Think carefully about what strategy are you using and why or else you could get tossed around as more than a few things were supposed to be the \"\"sure thing\"\" that turned out to be incorrect like the Dream Team of Long-term Capital Management, the banks that were too big to fail, the Japanese taking over in the late 1980s, etc. There are more than a few times where things started looking one way and ended up quite differently though I wonder if you are aware of this performance chasing that some will do.\"",
"title": ""
},
{
"docid": "642b86f98a538677ffa13426a8d71943",
"text": "Is it POSSIBLE? Of course. I don't even need to do any research to prove that. Just some mathematical reasoning: Take the S&P 500. Find the performance of each stock in that list over whatever time period you want to use for your experiment. Now select some number of the best-performing stocks from the list -- any number less than 500. By definition, the X best must be better than or equal to the average. Assuming all the stocks on the S&P did not have EXACTLY the same performance, these 10 must be better than average. You now have a diversified portfolio that performed better than the S&P 500 index fund. Of course as they always say in a prospectus, past performance is not a guarantee of future performance. It's certainly possible to do. The question is, if YOU selected the stocks making up a diversified portfolio, would your selections do better than an index fund?",
"title": ""
},
{
"docid": "352ae26769c4ba7b9868bfb94afe8813",
"text": "\"You absolutely should consider expenses. Why do they matter when the \"\"sticker price\"\" already includes them? Because you can be much more certain about what the expense ratio will be in the future than you can about what the fund performance will be in the future. The \"\"sticker price\"\" mixes generalized economic growth (i.e., gains you could have gotten from other funds) with gains specific to the fund, but the expense ratio is completely fund-specific. In other words, when looking at the \"\"sticker price\"\" performance of a fund, it's difficult to determine how that performance will extend into the future. But the expense ratio will definitely carry into the future. It is rare for funds to drastically change their expense ratios, but common for funds to change their performance. Suppose you find a fund that has returned a net of 8% over some time period and has a 1% expense ratio, and another fund that has returned a net of 10% but has a 2% expense ratio. So the first fund returned 9%-1% = 8% and the second returned 12%-2%=10%. There are decent odds that, over some future time period, the first fund will return 10%-1%=9% while the second fund will return 10%-2%=8%. In order for the second fund to be better than the first, it has to reliably outperform it by 1%; this is harder than it may sound. Simply put, there is a lot of \"\"noise\"\" in the fund performance, but the expense ratio is \"\"all signal\"\". Of course, if you find a fund that will reliably return 20% after expenses of 3%, it would probably make sense to choose that over one that returns 10% after expenses of 1%. But \"\"will reliably return\"\" is not the same as \"\"has returned over the past N years\"\", and the difference between the two phrases becomes greater and greater the smaller N is. When you find a fund that seems to have performed staggeringly well over some time period, you should be cautious; there is a good chance that the future holds some regression to the mean, and the fund will not continue to be so stellar. You may want to take a look at this question which asked about Morningstar fund ratings, which are essentially a measure of past performance. My answer references a study done by Morningstar comparing its own star ratings vs. fund expenses as a predictor of overall results. I'll repeat here the take-home message: How often did it pay to heed expense ratios? Every time. How often did it pay to heed the star rating? Most of the time, with a few exceptions. How often did the star rating beat expenses as a predictor? Slightly less than half the time, taking into account funds that expired during the time period. In other words, Morningstar's own study showed that its own star ratings (that is, past fund performance) are not as good at predicting success as simply looking at the expense ratios of the funds.\"",
"title": ""
},
{
"docid": "991cef19bbf007ca750f256f14ac5d3a",
"text": "Since the vast majority of fund managers/big investors run private entities, it's not possible to track their performance. It's possible to look at what they are holding (that's never real-time information) and emulate their performance.",
"title": ""
},
{
"docid": "787e561450535d93b98cac7b6f0088e2",
"text": "This is Ellie Lan, investment analyst at Betterment. To answer your question, American investors are drawn to use the S&P 500 (SPY) as a benchmark to measure the performance of Betterment portfolios, particularly because it’s familiar and it’s the index always reported in the news. However, going all in to invest in SPY is not a good investment strategy—and even using it to compare your own diversified investments is misleading. We outline some of the pitfalls of this approach in this article: Why the S&P 500 Is a Bad Benchmark. An “algo-advisor” service like Betterment is a preferable approach and provides a number of advantages over simply investing in ETFs (SPY or others like VOO or IVV) that track the S&P 500. So, why invest with Betterment rather than in the S&P 500? Let’s first look at the issue of diversification. SPY only exposes investors to stocks in the U.S. large cap market. This may feel acceptable because of home bias, which is the tendency to invest disproportionately in domestic equities relative to foreign equities, regardless of their home country. However, investing in one geography and one asset class is riskier than global diversification because inflation risk, exchange-rate risk, and interest-rate risk will likely affect all U.S. stocks to a similar degree in the event of a U.S. downturn. In contrast, a well-diversified portfolio invests in a balance between bonds and stocks, and the ratio of bonds to stocks is dependent upon the investment horizon as well as the individual's goals. By constructing a portfolio from stock and bond ETFs across the world, Betterment reduces your portfolio’s sensitivity to swings. And the diversification goes beyond mere asset class and geography. For example, Betterment’s basket of bond ETFs have varying durations (e.g., short-term Treasuries have an effective duration of less than six months vs. U.S. corporate bonds, which have an effective duration of just more than 8 years) and credit quality. The level of diversification further helps you manage risk. Dan Egan, Betterment’s Director of Behavioral Finance and Investing, examined the increase in returns by moving from a U.S.-only portfolio to a globally diversified portfolio. On a risk-adjusted basis, the Betterment portfolio has historically outperformed a simple DIY investor portfolio by as much as 1.8% per year, attributed solely to diversification. Now, let’s assume that the investor at hand (Investor A) is a sophisticated investor who understands the importance of diversification. Additionally, let’s assume that he understands the optimal allocation for his age, risk appetite, and investment horizon. Investor A will still benefit from investing with Betterment. Automating his portfolio management with Betterment helps to insulate Investor A from the ’behavior gap,’ or the tendency for investors to sacrifice returns due to bad timing. Studies show that individual investors lose, on average, anywhere between 1.2% to 4.3% due to the behavior gap, and this gap can be as high as 6.5% for the most active investors. Compared to the average investor, Betterment customers have a behavior gap that is 1.25% lower. How? Betterment has implemented smart design to discourage market timing and short-sighted decision making. For example, Betterment’s Tax Impact Preview feature allows users to view the tax hit of a withdrawal or allocation change before a decision is made. Currently, Betterment is the only automated investment service to offer this capability. This function allows you to see a detailed estimate of the expected gains or losses broken down by short- and long-term, making it possible for investors to make better decisions about whether short-term gains should be deferred to the long-term. Now, for the sake of comparison, let’s assume that we have an even more sophisticated investor (Investor B), who understands the pitfalls of the behavior gap and is somehow able to avoid it. Betterment is still a better tool for Investor B because it offers a suite of tax-efficient features, including tax loss harvesting, smarter cost-basis accounting, municipal bonds, smart dividend reinvesting, and more. Each of these strategies can be automatically deployed inside the portfolio—Investor B need not do a thing. Each of these strategies can boost returns by lowering tax exposure. To return to your initial question—why not simply invest in the S&P 500? Investing is a long-term proposition, particularly when saving for retirement or other goals with a time horizon of several decades. To be a successful long-term investor means employing the core principles of diversification, tax management, and behavior management. While the S&P might look like a ‘hot’ investment one year, there are always reversals of fortune. The goal with long-term passive investing—the kind of investing that Betterment offers—is to help you reach your investing goals as efficiently as possible. Lastly, Betterment offers best-in-industry advice about where to save and how much to save for no fee.",
"title": ""
},
{
"docid": "88df300e6b133556974c6289f78c352f",
"text": "The only way for a mutual fund to default is if it inflated the NAV. I.e.: it reports that its investments worth more than they really are. Then, in case of a run on the fund, it may end up defaulting since it won't have the money to redeem shares at the NAV it published. When does it happen? When the fund is mismanaged or is a scam. This happened, for example, to the fund Madoff was managing. This is generally a sign of a Ponzi scheme or embezzlement. How can you ensure the funds you invest in are not affected by this? You'll have to read the fund reports, check the independent auditors' reports and check for clues. Generally, this is the job of the SEC - that's what they do as regulators. But for smaller funds, and private (i.e.: not public) investment companies, SEC may not be posing too much regulations.",
"title": ""
}
] |
fiqa
|
143c9902a5dbdd5cf2054e0bfc60a509
|
Why would a passive investor buy anything other than the market portfolio + risk free assets?
|
[
{
"docid": "050c767b77c61494380662aa4b300d36",
"text": "\"Investing is always a matter of balancing risk vs reward, with the two being fairly strongly linked. Risk-free assets generally keep up with inflation, if that; these days advice is that even in retirement you're going to want something with better eturns for at least part of your portfolio. A \"\"whole market\"\" strategy is a reasonable idea, but not well defined. You need to decide wheher/how to weight stocks vs bonds, for example, and short/long term. And you may want international or REIT in the mix; again the question is how much. Again, the tradeoff is trying to decide how much volatility and risk you are comfortable with and picking a mix which comes in somewhere around that point -- and noting which assets tend to move out of synch with each other (stock/bond is the classic example) to help tune that. The recommendation for higher risk/return when you have a longer horizon before you need the money comes from being able to tolerate more volatility early on when you have less at risk and more time to let the market recover. That lets you take a more aggressive position and, on average, ger higher returns. Over time, you generally want to dial that back (in the direction of lower-risk if not risk free) so a late blip doesn't cause you to lose too much of what you've already gained... but see above re \"\"risk free\"\". That's the theoretical answer. The practical answer is that running various strategies against both historical data and statistical simulations of what the market might do in the future suggests some specific distributions among the categories I've mentioned do seem to work better than others. (The mix I use -- which is basically a whole-market with weighting factors for the categories mentioned above -- was the result of starting with a general mix appropriate to my risk tolerance based on historical data, then checking it by running about 100 monte-carlo simulations of the market for the next 50 years.)\"",
"title": ""
}
] |
[
{
"docid": "6ee5094a258ae0377d39f8cdcfb21087",
"text": "\"Tricky question, basically, you just want to first spread risk around, and then seek abnormal returns after you understand what portions of your portfolio are influenced by (and understand your own investment goals) For a relevant timely example: the German stock exchange and it's equity prices are reaching all time highs, while the Greek asset prices are reaching all time lows. If you just invested in \"\"Europe\"\" your portfolio will experience only the mean, while suffering from exchange rate changes. You will likely lose because you arbitrarily invested internationally, for the sake of being international, instead of targeting a key country or sector. Just boils down to more research for you, if you want to be a passive investor you will get passive investor returns. I'm not personally familiar with funds that are good at taking care of this part for you, in the international markets.\"",
"title": ""
},
{
"docid": "2fa005e6b96c5bef7f326c418e9c9f03",
"text": "Putting 64% of a portfolio in gold and silver is pretty reckless from an investing standpoint. That being said, if he really did buy most of the stocks in 2002, he's probably made a good deal of money off these picks.",
"title": ""
},
{
"docid": "0bdccbd5c576bbbfa192d1788df6e45a",
"text": "\"If the stock market dropped 30%-40% next month, providing you with a rare opportunity to buy stocks at a deep discount, wouldn't you want to have some of your assets in investments other than stocks? If you don't otherwise have piles of new cash to throw into the market when it significantly tanks, then having some of your portfolio invested elsewhere will enable you to back up the proverbial truck and load up on more stocks while they are on sale. I'm not advocating active market timing. Rather, the way that long-term investors capitalize on such opportunities is by choosing a portfolio asset allocation that includes some percentage of safer assets (e.g. cash, short term bonds, etc.), permitting the investor to rebalance the portfolio periodically back to target allocations (e.g. 80% stocks, 20% bonds.) When rebalancing would have you buy stocks, it's usually because they are on sale. Similarly, when rebalancing would have you sell stocks, it's usually because they are overpriced. So, don't consider \"\"safer investments\"\" strictly as a way to reduce your risk. Rather, they can give you the means to take advantage of market drops, rather than just riding it out when you are already 100% invested in stocks. I could say a lot more about diversification and risk reduction, but there are plenty of other great questions on the site that you can look through instead.\"",
"title": ""
},
{
"docid": "75bcad1593ac0755ac3d8e9080e922d7",
"text": "\"Doesn't \"\"no rebalancing\"\" mean \"\"start with a portfolio and let it fly?\"\" Seems like incorporation of rebalancing is more sophisticated than not. Just \"\"buy\"\" your portfolio at the start and see where it ends up with no buying/selling, as compared with where it ends up if you do rebalance. Or is it not that simple?\"",
"title": ""
},
{
"docid": "6adfc37167cca13c23799cd8c226a6d5",
"text": "I would strongly, strongly advise against it. Others here are answering the question of, having decided to invest in property, how one ought to ensure that one invests in the right property. What has not really been discussed here is the issue of diversification. There are a number of serious risks to property investment. In fact, it is one of the riskiest types of investment. You face more of almost every type of risk in property than maybe any other asset class. It is one thing to take on those risks as part of a diverse portfolio including other asset classes. It is quite another - extremely irresponsible - thing to take on those risks as your sole investment, when your portfolio is in its infancy. So no, do not invest in property when you lack any other investments. Absolutely not.",
"title": ""
},
{
"docid": "cc3b53420f83deaefdcd21bacc9b616d",
"text": "Modern portfolio theory has a strong theoretical background and its conclusions on the risk/return trade-off have a lot of good supporting evidence. However, the conclusions it draws need to be used very carefully when thinking about retirement investing. If you were really just trying to just pick the one investment that you would guess would make you the most money in the future then yes, given no other information, the riskiest asset would be the best one. However, for most people the goal retirement investing is to be as sure as possible to retire comfortably. If you were to just invest in a single, very risky asset you may have the highest expected return, but the risk involved would mean there might be a good chance you money may not be there when you need it. Instead, a broad diversified basket of riskier and safer assets leaning more toward the riskier investments when younger and the safer assets when you get closer to retirement tends to be a better fit with most people's retirement goals. This tends to give (on average) more return when you are young and can better deal with the risk, but dials back the risk later in life when your investment portfolio is a majority of your wealth and you can least afford any major swings. This combines the lessons of MPT (diversity, risk/return trade-off) in a clearer way with common goals of retirement. Caveat: Your retirement goals and risk-tolerance may be very different from other peoples'. It is often good to talk to (fee-only) financial planner.",
"title": ""
},
{
"docid": "3a16e38607c9d834e9d46ff63df423c5",
"text": "No I get that. But if you don’t want risk, then buy bonds. Long term an S&P Index has very low risk. On the other hand, actively managed funds have fees that take out a ton of the gain that could be had. I don’t have time to look for the study but I read recently that 97% of actively managed funds were outperformed by S&P Indexes after fees. Now I don’t know about you but I think the risk of not picking a top 3% fund is probably higher than the safe return of index’s.",
"title": ""
},
{
"docid": "eccf9dca165c289a85667fa2f8911b12",
"text": "Passive implies following an index. Your question seems to ask about a hypothetical fund that starts, say, as an S&P fund, but as the index is adjusted, the old stocks stay in the fund. Sounds simple enough, but over time, the fund's performance will diverge from the index. The slight potential gain from lack of cap gains will be offset by the fund being unable to market itself. Keep in mind, the gains distributed each year are almost exclusively long term, taxed at a favorable rate.",
"title": ""
},
{
"docid": "2b3d7a7c4d8d36118d82262283492883",
"text": "\"Ah I got ya. I partially agree with you, but it's far more complex. I think that is simplifying the debate a bit too much. When people go \"\"passive\"\" you are making the assumption that they are able to stay fully invested the full time period (say 30-40 years until retirement when you might change the asset allocation). This is not a fair assumption because many studies on behavioral finance have shown that people (90% plus) are not able to sit tight through a full market cycle and often sell out during a bear market. I'm not debating you're point that passive often outperforms due to the fees (although there are many managers that do outperform), but the main issue with self-managing and passive investing is people usually make emotional decisions, which then hurts their long-term performance. This would be the reason to hire an adviser. Assuming that people are able to stay passive the entire time and not make a single \"\"active\"\" decision is a very unfair assumption. There was a good study on this referenced in Forbes article below: https://www.forbes.com/sites/advisor/2014/04/24/why-the-average-investors-investment-return-is-so-low/#5169be2b111a Another issue is that there are a lot \"\"active managers\"\" that really just replicate their benchmarks and don't actually actively manage. If you look at active managers who really do have huge under-weights and over-weights relative to their benchmarks they actually tend to outperform them (look at the study below by martin cremers, he's one of the most highly respected researchers when it comes to investment performance research and the active vs passive debate) http://www.cfapubs.org/doi/pdf/10.2469/faj.v73.n2.4 I guess what I'm trying to say is that for most people having an adviser (and paying them a 1% fee) is usually better than going it alone, where they are going to A. chase heat (I bet they always choose the hottest benchmark from the past few years) and B. make poor emotional decisions relating their finances.\"",
"title": ""
},
{
"docid": "3baa242993cb5b6cc6ab13e6fa977495",
"text": "Consistently beating the market by picking stocks is hard. Professional fund managers can't really do it -- and they get paid big bucks to try! You can spend a lot of time researching and picking stocks, and you may find that you do a decent job. I found that, given the amount of money I had invested, even if I beat the market by a couple of points, I could earn more money by picking up some moonlighting gigs instead of spending all that time researching stocks. And I knew the odds were against me beating the market very often. Different people will tell you that they have a sure-fire strategy that gets returns. The thing I wonder is: why are you selling the information to me rather than simply making money by executing on your strategy? If they're promising to beat the market by selling you their strategy, they've probably figured out that they're better off selling subscriptions than putting their own capital on the line. I've found that it is easier to follow an asset allocation strategy. I have a target allocation that gives me fairly broad diversification. Nearly all of it is in ETFs. I rebalance a couple times a year if something is too far off the target. I check my portfolio when I get my quarterly statements. Lastly, I have to echo JohnFx's statement about keeping some of your portfolio in cash. I was almost fully invested going into early 2001 and wished I had more cash to invest when everything tanked -- lesson learned. In early 2003 when the DJIA dropped to around 8000 and everybody I talked to was saying how they had sold off chunks of their 401k in a panic and were staying out of stocks, I was able to push some of my uninvested cash into the market and gained ~25% in about a year. I try to avoid market timing, but when there's obvious panic or euphoria I might under- or over-allocate my cash position, respectively.",
"title": ""
},
{
"docid": "fe87a107006a1c915292432f35ec1d5c",
"text": "Virtually zero risk of default; safety; diversification; guaranteed fixed income albeit very low; portfolio diversifier so it reduces total volatility; plus yields might drop even lower thus increasing the price of the bond. Very unlikely given how obscenely low yields already are but still possible. I thought nobody would ever buy a 10yr @ 3% and now look, rates are almost half as much and those 3% bonds are worth a lot more now on the secondary market. Timing the bond market is really hard.",
"title": ""
},
{
"docid": "bda3ef90192a9c5903b02085137489e8",
"text": "Your question seems to be making assumptions around “investing”, that investing is only about stock market and bonds or similar things. I would suggest that you should look much broader than that in terms of your investments. Investment Types Your should consider (and include) some or all of the following for your investments, depending on your age, your attitude towards risk, the number of dependents you have, your lifestyle, etc. I love @Blackjack’s explanation of diversification into other asset classes producing a lower risk portfolio. Excellent! All the above need to be considered in this spread of risk, depending as I said earlier on your age, your attitude towards risk, the number of dependents you have, your lifestyle, etc. Stock Market Investment I’ll focus most of the rest of my post on the stock markets, as that is where my main experience lies. But the comments are applicable to a greater or lesser extent to other types of investing. We then come to how engaged you want to be with your investments. Two general management styles are passive investment management versus active investment management. @Blackjack says That pretty much sums up passive management. The idea is to buy ETFs across asset classes and just leave them. The difficulty with this idea is that profitability is very dependent upon when the stocks are purchased and when they are sold. This is why active investing should be considered as a viable alternative to passive investment. I don’t have access to a very long time frame of stock market data, but I do have 30 or so years of FTSE data, so let’s say that we invest £100,000 for 10 years by buying an ETF in the FTSE100 index. I know this isn't de-risking across a number of asset classes by purchasing a number of different EFTs, but the logic still applies, if you will bear with me. Passive Investing I have chosen my example dates of best 10 years and worst 10 years as specific dates that demonstrate my point that active investing will (usually) out-perform passive investing. From a passive investing point of view, here is a graph of the FTSE with two purchase dates chosen (for maximum effect), to show the best and worst return you could receive. Note this ignores brokerage and other fees. In these time frames of data I have … These are contrived dates to illustrate the point, on how ineffective passive investing can be, depending if there is a bear/bull market and where you buy in the cycle. One obviously wouldn’t buy all their stocks in one tranche, but I’m just trying to illustrate the point. Active Investing Let’s consider now active investing. I use the following rules for selling and buying:- This is obviously a very simple technical trading system and I would not recommend using it to trade with, as it is overly simplistic and there are some flaws and inefficiencies in it. So, in my simulation, These beat the passive stock market profit for their respective dates. Summary Passive stock market investing is dependent upon the entry and exit prices on the dates the transactions are made and will trade regardless of market cycles. Active stock market trading or investing engages with the market using a set of criteria, which can change over time, but allows one’s investments to be in or out of the market at any point in time. My time frames were arbitrary, but with the logic applied (which is a very simple technical trading methodology), I would suggest that any 10 year time frame active investing would beat passive investing.",
"title": ""
},
{
"docid": "0db35a8dded0fbc1af8fce07dba6bfe9",
"text": "\"There's no such thing as true \"\"passive income.\"\" You are being paid the risk free rate to delay consumption (i.e., the super low rate you are getting on savings accounts and CDs) and a higher rate to bear risk. You will not find truly risk-free investments that earn more than the types of investments you have been looking at...most likely you will not keep up with inflation in risk-free investments. For a person who is very risk averse but wants to make a little more money than the risk-free rate, the solution is not to invest completely in slightly risky things. Instead the best thing you can do is invest partially in a fully diversified portfolio. A diversified portfolio (containing stocks, bonds, etc) will earn you the most return for the given amount of risk. If you want very little risk, put very little in that portfolio and keep the rest in your CDs. Put 90% of your money in a CD or something and the other 10% in stocks/bonds. Or choose a different percentage. You can also buy real assets, like real estate, but you will find yourself taking a different type of risk and doing a different type of work with those assets.\"",
"title": ""
},
{
"docid": "cde469018b3cfb591796938d77a8ff2d",
"text": "I don't see balance sheet in what you're looking at, and I'd definitely suggest learning how to read a balance sheet and looking at it, if you're going to buy stock in a company, unless you know that the recommendations you're buying on are already doing that and you're willing to take that risk. Also, reading past balance sheets and statements can give you an idea about how accurate the company is with their predictions, or if they have a history of financial integrity. Now, if you're going the model portfolio route, which has become popular, the assumption that many of these stock buyers are making is that someone else is doing that for them. I am not saying that this assumption is valid, just one that I've seen; you will definitely find a lot of skeptics, and rightly so, about model portfolios. Likewise, people who trade based on what [Person X] does (like Warren Buffett or David Einhorn) are assuming that they're doing the research. The downside to this is if you follow someone like this. Yeah, oops. I should also point out that technical analysis, especially high probability TA, generally only looks at history. Most would define it as high risk and there are many underlying assumptions with reading the price movements by high probability TA types.",
"title": ""
},
{
"docid": "8f5425400aa00739f218859eaffbd248",
"text": "\"The argument you are making here is similar to the problem I have with the stronger forms of the efficient market hypothesis. That is if the market already has incorporated all of the information about the correct prices, then there's no reason to question any prices and then the prices never change. However, the mechanism through which the market incorporates this information is via the actors buying an selling based on what they see as the market being incorrect. The most basic concept of this problem (I think) starts with the idea that every investor is passive and they simply buy the market as one basket. So every paycheck, the index fund buys some more stock in the market in a completely static way. This means the demand for each stock is the same. No one is paying attention to the actual companies' performance so a poor performer's stock price never moves. The same for the high performer. The only thing moving prices is demand but that's always up at a more or less constant rate. This is a topic that has a lot of discussion lately in financial circles. Here are two articles about this topic but I'm not convinced the author is completely serious hence the \"\"worst-case scenario\"\" title. These are interesting reads but again, take this with a grain of salt. You should follow the links in the articles because they give a more nuanced understanding of each potential issue. One thing that's important is that the reality is nothing like what I outline above. One of the links in these articles that is interesting is the one that talks about how we now have more indexes than stocks on the US markets. The writer points to this as a problem in the first article, but think for a moment why that is. There are many different types of strategies that active managers follow in how they determine what goes in a fund based on different stock metrics. If a stocks P/E ratio drops below a critical level, for example, a number of indexes are going to sell it. Some might buy it. It's up to the investors (you and me) to pick which of these strategies we believe in. Another thing to consider is that active managers are losing their clients to the passive funds. They have a vested interest in attacking passive management.\"",
"title": ""
}
] |
fiqa
|
e3267e2bb5e77076e05d29b0ce207cb7
|
What's the benefit of opening a Certificate of Deposit (CD) Account?
|
[
{
"docid": "d0ad9f9eb2ce3f554c89fd6e9644f846",
"text": "\"If you've already got emergency savings sufficient for your needs, I agree that you'd be better served by sending that $500 to your student loan(s). I, personally, house the bulk of my emergency savings in CDs because I'm not planning to touch it and it yields a little better than a vanilla savings account. To address the comment about liquidity. In addition to my emergency savings I keep plain vanilla savings accounts for miscellaenous sudden expenses. To me \"\"emergency\"\" means lost job, not new water pump for my car; I have other budgeted savings for that but would spend it on a credit card and reimburse myself anyway so liquidity there isn't even that important. The 18 month CDs I use are barely less liquid than vanilla savings and the penalty is just a couple months of the accrued interest. When you compare a possible early distribution penalty against the years of increased yield you're likely to come out ahead after years of never touching your emergency savings, unless you're budgeted such that a car insurance deductible is an emergency expense. Emergency funds should be guaranteed and non-volatile. If I lose my job, 90 days of accrued interest isn't a hindrance to breaking open some of my CDs, and the process isn't so daunting that I'd meaningfully harm my finances. Liquidity in 2017 and liquidity in whatever year a text book was initially written are two totally different animals. My \"\"very illiquid\"\" brokerage account funds are only one transaction and 3 settlement days less liquid than my \"\"very liquid\"\" savings account. There's no call the bank, sell the security, wait for it to clear, my brokerage cuts a check, mail the check, cash the check, etc. I can go from Apple stock on Monday to cash in my hand on like Thursday. On the web portal for the bank that holds my CDs I can instantly transfer the funds from a CD to my checking account there net of a negligible penalty for early distribution. To call CDs illiquid in 2017 is silly.\"",
"title": ""
},
{
"docid": "a90b7d3e183d6d7ef73cd23975580513",
"text": "One reason why you can get a better rate with a CD compared to a regular savings account is that they lock you into that account for the period of the CD. You can get out of the CD early, but you will forfeit some of the interest. You also generally can't move a portion of the money out of the CD, you have to pull it all out, and then start a new CD with the portion you don't spend. You have to check the terms and conditions for that particular CD. Some people use them to hold their emergency fund. This is the 3-6 months of expenses you set aside in case of a major problem such as a medical emergency or a job loss. The rate is better than the regular savings account, so it can come closer to inflation. The goal is preservation of capital, not investing for the future. So if you understand the risks, and the CD is backed with the same guarantees as the savings account, then it is a viable way to store some or all of the emergency fund.",
"title": ""
},
{
"docid": "fdfd994b5992e50efdcfb6a00c3901a5",
"text": "The benefit, as other answers have mentioned, is higher interest rates than are available compared to other comparable options. My bank keeps spamming me with offers for a sub 1% APR savings account that only requires a $10,000 balance, for example. While CDs and similar safe investments don't seem like they offer much value now (or in the recent past), that's because they strongly correlate to the federal funds rate, which is near historic lows. See the graph of CD rates and the federal funds rate, here. You may have felt differently in July of 1984, when you could get a 5 year CD with an APR above 12%. As you can see in this graph of historical CD yields, it hasn't always been the case that CDs offered such small returns. That being said, CDs are safe investments, being FDIC insured (up to the FDIC insurance limits), so you're not going to get great rates from one, because there's basically no risk in this particular type of investment. If you want better rates, you get those by investing in riskier instruments that have the possibility of losing value.",
"title": ""
},
{
"docid": "deedcc2dc423b9a0461a8cefdaea6df0",
"text": "Others have pointed out why one typically chooses a CD: to lock in an interest rate that's higher than most other savings accounts (at the expense of having quick access to your money). While most savings accounts have practically 0% return, there are high yield savings accounts out there with little to no strings that offer ~1% APY. I've personally not found CDs to be compelling when viewed against those, especially for something like an emergency fund where I'd rather just know it's available without having to think about penalties and such. Some people ladder CDs so that they're always no more than a month or so away from having access to some of the money, but for the return I've decided I prefer to just avoid the hassle. For 2.25%, which I haven't really seen, I might consider it, but in any case, you're better served by paying more to your loans.",
"title": ""
},
{
"docid": "d5cf6c794ca38b8787f237872319bc79",
"text": "Yes. Savings accounts and CDs today pay almost nothing. They are not a way to grow your money for the future. They are a place to keep some spare cash for emergencies. I don't have such accounts any more. Personally, I generally keep about $2000 in my checking account for any sudden surprise expenses. Any other spare money I have I put into very safe mutual funds. They don't grow much either, but it's better than what I'd get on a savings account or CD.",
"title": ""
}
] |
[
{
"docid": "2de869e9b4c67e8ad0198cdafdbc1620",
"text": "Per Md. REAL PROPERTY Code Ann. § 8-203: (d) (1) (i) The landlord shall maintain all security deposits in federally insured financial institutions, as defined in § 1-101 of the Financial Institutions Article, which do business in the State. (ii) Security deposit accounts shall be maintained in branches of the financial institutions which are located within the State and the accounts shall be devoted exclusively to security deposits and bear interest. (iii) A security deposit shall be deposited in an account within 30 days after the landlord receives it. (iv) The aggregate amount of the accounts shall be sufficient in amount to equal all security deposits for which the landlord is liable. (2) (i) In lieu of the accounts described in paragraph (1) of this subsection, the landlord may hold the security deposits in insured certificates of deposit at branches of federally insured financial institutions, as defined in § 1-101 of the Financial Institutions Article, located in the State or in securities issued by the federal government or the State of Maryland. (ii) In the aggregate certificates of deposit or securities shall be sufficient in amount to equal all security deposits for which the landlord is liable. As such, one or more accounts at your preference; it's up to the bank how to treat the account, so it may be a personal account or it may be a 'commercial' account depending on how they treat it (but it must be separate from your personal funds). A CD is perhaps the easiest way to go, as it's not a separate account exactly but it's easily separable from your own funds (and has better interest). You should also note (further down on that page) that you must pay 3% interest, once per six months; so try to get an account that pays as close as possible to that. You likely won't get 3% right now even in a CD, so consider this as an expense (and you'll probably find many people won't take security deposits in many situations as a result).",
"title": ""
},
{
"docid": "da8971e320e17168b6e2670bbee6801b",
"text": "This: I was told by my broker that the amount of money I invest would be spread across multiple banks (which are FDIC insured) so that at each bank the amount would not exceed $250K. Has nothing to do with this: Is this how CDs offered by brokerage houses (that are not themselves FDIC insured) offer protection? If you want a CD, get the CD from a bank itself.",
"title": ""
},
{
"docid": "c4b3c2dbcefd00d11c49874dc9ace1cc",
"text": "High-interest checking / savings accounts are often a better choice than CDs today for three reasons. At the time this question was asked, CDs were probably a better answer as rates were much higher. Since CD rates have plummeted in recent years, and because a CD is only semi-liquid, i.e., even if you ladder CDs, an early withdrawal fee often means foregoing the interest on that particular CD which you withdrew. 1.) On the other hand, high-interest checking and/or savings accounts are very viable options these days. There are several options available that earn ~1%+ APY. It's not quite that simple, and there are a few gotchas: If you run into the balance cap problem, of course nothing is stopping you from having multiple accounts across different banks. 2.) The high-interest bank accounts are fully liquid able to be liquidated at anytime (without foregoing interest). 3.) A minor benefit is that the high-yield savings account is low maintenance whereas CD laddering is pretty hands on and may require physical trips to your bank. (If you know of a way to automate the process more, please comment or edit.)",
"title": ""
},
{
"docid": "f6e5fe23c38693635143a4ec33b49ab0",
"text": "My Credit Union offers a market-linked CD where the investment has FDIC protection if it is held to maturity, but otherwise they are linked with the S&P 500. it comes with this warning: Market-Link CDs are not appropriate for all depositors including clients needing a guaranteed interest payment or seeking full participation in the stock market. If redeemed prior to maturity, the amount received will be subject to market risk including interest rate fluctuations an issuer credit quality. So they still do exist. Another credit union I belong to has a similar product. The risk is that if you need the money early, there may be losses. There would also not be a way to switch to a more conservative posture as the CD approached maturity, if you were interested in protecting your gains.",
"title": ""
},
{
"docid": "0a2efeac804c891a23794890a7a0f551",
"text": "\"The only really good reason to open a line of credit is that you want to buy something that you don't have money for. That's got its own risks - see plenty of other places to see warnings about not borrowing too much. The only other reason is that you might want to use a line of credit as your emergency fund. The usual way of doing this is to keep the money in an easily acccessible savings account - but such accounts usually pay rather now interest, and there is an argument for instead investing your emergency money in a higher-interest but less-accessible fund and using a line of credit to tide you over until you can extract the money. I'm worried about the comment that you can \"\"deduct my interest on my tax returns\"\". That is usually only possible if you are borrowing money to invest. It sounds as if your banker is going to persuade you to not only open a line of credit, but then invest that money in something. Be aware that this kind of 'leveraging' is much higher risk than investing money you already own.\"",
"title": ""
},
{
"docid": "6ea1a50c2be082b1898f0ac78a08715d",
"text": "In the US, you would probably look at a certificate of deposit (CD). I imagine there is a similar financial product in the UK, but don't know first hand. I think it is wise to be risk averse in this situation, but be aware that your interest rate will be dismal for guaranteed returns.",
"title": ""
},
{
"docid": "aaa8aad4c12291860d68cfacd8f7b6ed",
"text": "I found out there is something called CDARS that allows a person to open a multi-million dollar certificate of deposit account with a single financial institution, who provides FDIC coverage for the entire account. This financial institution spreads the person's money across multiple banks, so that each bank holds less than $250K and can provide the standard FDIC coverage. The account holder doesn't have to worry about any of those details as the main financial institution handles everything. From the account holder's perspective, he/she just has a single account with the main financial institution.",
"title": ""
},
{
"docid": "fe02dac238961f9255895e609c881f91",
"text": "Banks has to complete KYC. In case you want to open a bank account, most will ask for proof of address. I also feel it is difficult for bank to encash a cheque payable to a business in your account. Opening a bank account in the name of your business or alternatively obtaining a cheque payable to your personal name seems the only alternatives to me.",
"title": ""
},
{
"docid": "0705011a94c6f42e4594a8b2d3c5aafb",
"text": "\"The key part of your question is the \"\"so far\"\". So you didn't need a credit card today, or yesterday, or last month - great! But what about tomorrow? The time may come when you really need to spend a little more than you have, and a credit card will let you do that, at a very modest cost if you pay it off promptly (no cost, if paid within 30 days). I learned this when I was traveling and stranded due to bad weather. I had almost nothing in my bank account at the time, and while I actually did have a small student-type credit card, I came really close to having to sleep at the train station when I didn't have enough for another night in a hotel. As an example, if you have close friends or family living across the country, and something tragic were to happen, would you be able to pay for a flight to attend the funeral? What if you'd recently had an accident and a big medical bill (it doesn't take much, a broken arm can cost $10,000)? Perhaps you have a solid nest egg, but breaking a CD ahead of schedule or taking short-term capital gains on a mutual fund will usually cost more than one or two months of interest payments.\"",
"title": ""
},
{
"docid": "a0ed194077d49ea34d04257f3a56dc3d",
"text": "Realistically, it is CDs with longer terms or are callable. You pretty much have to accept more risk if you want higher returns. If you are willing to accept that risk by losing the FDIC protections the next level up is probably high rated Government bonds.",
"title": ""
},
{
"docid": "03eefa72a1390fb78982f750e40bfd7f",
"text": "Yes. In the US these are called certificates of deposit or savings accounts. Every run-of-the-mill bank offers them. You give the bank money and in return they pay you an interest rate that is some fraction of or (negative) offset from the returns they expect to make from your money. Since most investments that a bank makes (say, loaning money to a local business) are themselves based on some multiple of or (positive) offset from the prime rate, in return the interest rate that they offer you is also mathematically based on the prime rate. You can find lists of banks offering the best returns on CDs or savings accounts at sites like BankRate.",
"title": ""
},
{
"docid": "530b34007fd2a38f3106869ed6763edd",
"text": "For the specific example you gave, a CD with a 0.05% rate of return, I'd shop around some more, that's a VERY low rate of return. A more realistic one would be 0.5%, depending on the terms. As has been mentioned, CDs are good when you need to preserve your capital. What might be a situation for that? They are great for Emergency funds, which you should always have a reasonable amount of cash in. I have a set up 3 CDs with 12 month terms, each carrying about 30% of my emergency savings. The remaining 10% I keep in a standard savings account, for quick access dealing with a short term emergency. The 3 are spaced about 4 months apart, so that I'm always within 4 months of having one come to term. They have a 3 month penalty if I withdraw early, but based on the fact that I have never had to touch more than 10% of my emergency savings, I'm perfectly okay with that. What about more long term savings? Well, it depends on what your timeframe is for using the money. If it's more than 10 years, and you are willing to risk losing some of it, then by all means invest in a higher risk higher reward investment. If it's only a few years, maybe a bond fund is something that would be better. And if you really need to preserve the money, then a CD can be great too.",
"title": ""
},
{
"docid": "0bd36117df316b80eab6b40eb5f3618d",
"text": "\"From my understanding, a CDS is a financial product to buy protection against an event of \"\"default\"\" (default of payment). Example: if General Motors owes me money $10,000,000 (because I own GM bonds for example) and I wish to protect myself against the event of GM not repaying the money they owe me (event called \"\"credit default\"\"), I pay FinancialCompany_X (the seller of the CDS) perhaps $250,000 per year against the promise that FinancialCompany_X will pay me in case GM is not paying me. This way I protected myself against that risk. FinancialCompany_X took the risk (against money). A CDS is in fact an insurance. Except they don't call it an insurance which enabled the financial industry to avoid the regulation that applies to insurances. There is a lot of infos here: http://en.wikipedia.org/wiki/Credit_default_swap\"",
"title": ""
},
{
"docid": "e3b8c01d4d603b00d5f2bd95c795955a",
"text": "\"You'd want the money to be \"\"liquid\"\" and ready for you to use when tax time comes around. You also don't want to lose \"\"principal\"\", i.e. if you put it into stocks and have the value of what you put in be less than what you invested—which is possible—when you need the money, again, at tax time. That doesn't leave you with many good choices or an amazingly good way to profit from investing your savings that you put aside for taxes. CDs are steady but will not give you much interest and they have a definite deposit timeframe 6 months, 1 yr, 2 yrs and you can't touch it. So, the only reasonable choice you have left is an interest bearing checking or savings account with up to 1% interest (APR)—as of this writing Ally Bank offers 1% interest in an online interest savings acct.—which will give you some extra money on your deposits. This is what I do.\"",
"title": ""
},
{
"docid": "163def80a80e57b6e03a993f56567747",
"text": "\"Long ago, a friend of mine shared with me the \"\"Lakshmi rule\"\" which can be used for managing one's spending: 1/3rd: Save, 1/3rd: Donate, 1/3rd: Survival. Survival refers to primary needs like food, clothing, shelter, medicine, family and priority needs like travel. The word \"\"Lakshmi\"\" comes from the Sanskrit language and is often used to denote money, wealth or opulence. Its etymological meaning is - to perceive, understand, objective, observe, to know etc. As per ancient thought leaders, wealth is to be used wisely and with great care. Carelessness and misuse of it means havoc not only in one's own life but also on a community level. Rather than seeing money as a source of one's own happiness, it should be used as tool for the larger good. This will give proper fulfillment in life and helps one shy away from spending on those little things which only give temporary happiness. Having a deeper perspective to our everyday actions and situations, can help develop beneficial habits that easily helps control one's impulsive urges and distractions.\"",
"title": ""
}
] |
fiqa
|
4ffb9d09257a5f9115f2f6ee2b436fa2
|
What is the difference between shares and ETF?
|
[
{
"docid": "3b758cc9b01b3c40ca56a7c8367938dc",
"text": "A mutual fund has several classes of shares that are charged different fees. Some shares are sold through brokers and carry a sales charge (called load) that compensates the broker in lieu of a fee that the broker would charge the client for the service. Vanguard does not have sales charge on its funds and you don't need to go through a broker to buy its shares; you can buy directly from them. Admiral shares of Vanguard funds are charged lower annual expenses than regular shares (yes, all mutual funds charge expenses for fund adninistration that reduce the return that you get, and Vanguard has some of the lowest expense ratios) but Admiral shares are available only for large investments, typically $50K or so. If you have invested in a Vanguard mutual fund, your shares can be set to automatically convert to Admiral shares when the investment reaches the right level. A mutual fund manager can buy and sell stocks to achieve the objectives of the fund, so what stockes you are invested in as a share holder in a mutual fund will typically be unknown to you on a day-to-day basis. On the other hand, Exchange-traded funds (ETFs) are fixed baskets of stocks, and you can buy shares in the ETF. These shares are bought and sold through a broker (so you pay a transaction fee each time) but expenses are lower since there is no manager to buy and sell stocks: the basket is fixed. Many ETFs follow specific market indexes (e.g. S&P 500). Another difference between ETFs and mutual funds is that you can buy and sell ETFs at any time of the day just as if you could if you held stocks. With mutual funds, any buy and sell requests made during the day are processed at the end of the day and the value of the shares that you buy or sell is determined by the closing price of the stocks held by the mutual fund. With ETFs, you are getting the intra-day price at the time the buy or sell order is executed by your broker.",
"title": ""
}
] |
[
{
"docid": "08c3f5e83dd7e845ab352290781bcd70",
"text": "Dividends are not paid immediately upon reception from the companies owned by an ETF. In the case of SPY, they have been paid inconsistently but now presumably quarterly.",
"title": ""
},
{
"docid": "87ea66c4f598e96d55550813d79da5aa",
"text": "ETFs are legally required to publicly disclose their positions at every point in time. The reason for this is that for an ETF to issue shares of ETF they do NOT take cash in exchange but underlying securities - this is called a creation unit. So people need to know which shares to deliver to the fund to get a share of ETF in exchange. This is never done by retail clients, however, but by nominated market makers. Retail persons will normally trade shares only in the secondary market (ie. on a stock exchange), which does not require new shares of the ETF to be issued. However, they do not normally make it easy to find this information in a digestible way, and each ETF does it their own way. So typically services that offer this information are payable (as somebody has to scrape the information from a variety of sources or incentivise ETF providers to send it to them). If you have access to a Bloomberg terminal, this information is available from there. Otherwise there are paid for services that offer it. Searching on Google for ETF constituent data, I found two companies that offer it: See if you can find what you need there. Good luck. (etfdb even has a stock exposure tool freely available that allows you to see which ETFs have large exposure to a stock of your choosing, see here: http://etfdb.com/tool/etf-stock-exposure-tool/). Since this data is in a table format you could easily download it automatically using table parsing tools for your chosen programming language. PS: Don't bother with underlying index constituents, they are NOT required to be made public and index providers will normally charge handsomely for this so normally only institutional investors will have this information.",
"title": ""
},
{
"docid": "34480337053b524ffb7b54a83e1dde6b",
"text": "\"A fund is a portfolio, in that it is a collection, so the term is interchangeable for the most part. Funds are made up of a combination of equities positions (i.e., stocks, bonds, etc.) plus some amount of un-invested cash. Most of the time, when people are talking about a \"\"fund\"\", they are describing what is really an investment strategy. In other words, an example would be a \"\"Far East Agressive\"\" fund (just a made up name for illustration here), which focuses on investment opportunities in the Far East that have a higher level of risk than most other investments, thus they provide better returns for the investors. The \"\"portfolio\"\" part of that is what the stocks are that the fund has purchased and is holding on behalf of its investors. Other funds focus on municipal bonds or government bonds, and the list goes on. I hope this helps. Good luck!\"",
"title": ""
},
{
"docid": "d1eee4f33571648fb95733b26e6f5736",
"text": "\"Here's an example that I'm trying to figure out. ETF firm has an agreement with GS for blocks of IBM. They have agreed on daily VWAP + 1% for execution price. Further, there is a commission schedule for 5 mils with GS. Come month end, ETF firm has to do a monthly rebalance. As such must buy 100,000 shares at IBM which goes for about $100 The commission for the trade is 100,000 * 5 mils = $500 in commission for that trade. I assume all of this is covered in the expense ratio. Such that if VWAP for the day was 100, then each share got executed to the ETF at 101 (VWAP+ %1) + .0005 (5 mils per share) = for a resultant 101.0005 cost basis The ETF then turns around and takes out (let's say) 1% as the expense ratio ($1.01005 per share) I think everything so far is pretty straight forward. Let me know if I missed something to this point. Now, this is what I'm trying to get my head around. ETF firm has a revenue sharing agreement as well as other \"\"relations\"\" with GS. One of which is 50% back on commissions as soft dollars. On top of that GS has a program where if you do a set amount of \"\"VWAP +\"\" trades you are eligible for their corporate well-being programs and other \"\"sponsorship\"\" of ETF's interests including helping to pay for marketing, rent, computers, etc. Does that happen? Do these disclosures exist somewhere?\"",
"title": ""
},
{
"docid": "5f4a5b3c153b0ee7c0d8c166d89883c0",
"text": "\"Back in the olden days, if you wanted to buy the S&P, you had to have a lot of money so you can buy the shares. Then somebody had the bright idea of making a fund that just buys the S&P, and then sells small pieces of it to investor without huge mountains of capital. Enter the ETFs. The guy running the ETF, of course, doesn't do it for free. He skims a little bit of money off the top. This is the \"\"fee\"\". The major S&P ETFs all have tiny fees, in the percents of a percent. If you're buying the index, you're probably looking at gains (or losses) to the tune of 5, 10, 20% - unless you're doing something really silly, you wouldn't even notice the fee. As often happens, when one guy starts doing something and making money, there will immediately be copycats. So now we have competing ETFs all providing the same service. You are technically a competitor as well, since you could compete with all these funds by just buying a basket of shares yourself, thereby running your own private fund for yourself. The reason this stuff even started was that people said, \"\"well why bother with mutual funds when they charge such huge fees and still don't beat the index anyway\"\", so the index ETFs are supposed to be a low cost alternative to mutual funds. Thus one thing ETFs compete on is fees: You can see how VOO has lower fees than SPY and IVV, in keeping with Vanguard's philosophy of minimal management (and management fees). Incidentally, if you buy the shares directly, you wouldn't charge yourself fees, but you would have to pay commissions on each stock and it would destroy you - another benefit of the ETFs. Moreover, these ETFs claim they track the index, but of course there is no real way to peg an asset to another. So they ensure tracking by keeping a carefully curated portfolio. Of course nobody is perfect, and there's tracking error. You can in theory compare the ETFs in this respect and buy the one with the least tracking error. However they all basically track very closely, again the error is fractions of the percent, if it is a legitimate concern in your books then you're not doing index investing right. The actual prices of each fund may vary, but the price hardly matters - the key metric is does it go up 20% when the index goes up 20%? And they all do. So what do you compare them on? Well, typically companies offer people perks to attract them to their own product. If you are a Fidelity customer, and you buy IVV, they will waive your commission if you hold it for a month. I believe Vanguard will also sell VOO for free. But for instance Fidelity will take commission from VOO trades and vice versa. So, this would be your main factor. Though, then again, you can just make an account on Robinhood and they're all commission free. A second factor is reliability of the operator. Frankly, I doubt any of these operators are at all untrustworthy, and you'd be buying your own broker's ETF anyway, and presumably you already went with the most trustworthy broker. Besides that, like I said, there's trivial matters like fees and tracking error, but you might as well just flip a coin. It doesn't really matter.\"",
"title": ""
},
{
"docid": "d3758f89694c049210e7beac9efa2c3a",
"text": "The trend in ETFs is total return: where the ETF automatically reinvests dividends. This philosophy is undoubtedly influenced by that trend. The rich and retired receive nearly all income from interest, dividends, and capital gains; therefore, one who receives income exclusively from dividends and capital gains must fund by withdrawing dividends and/or liquidating holdings. For a total return ETF, the situation is even more limiting: income can only be funded by liquidation. The expected profit is lost for the dividend as well as liquidating since the dividend can merely be converted back into securities new or pre-existing. In this regard, dividends and investments are equal. One who withdraws dividends and liquidates holdings should be careful not to liquidate faster than the rate of growth.",
"title": ""
},
{
"docid": "66b7ccc105a31477357e8d060940712c",
"text": "This ETFchannel.com page shows which ETFs hold Wells Fargo and you can search other stocks the get the same information on that site. This the same information for Google This even tells you what percentage of an ETF is a particular stock. Be warned that this site is not entirely free. You will be limited to 6 pages in 6 hours unless you pay for a subscription. Additionally ETFdb.com offers a similar tool.",
"title": ""
},
{
"docid": "446c12b0d6ce872ec6a585017050af10",
"text": "\"Does the bolded sentence apply for ETFs and ETF companies? No, the value of an ETF is determined by an exchange and thus the value of the share is whatever the trading price is. Thus, the price of an ETF may go up or down just like other securities. Money market funds can be a bit different as the mutual fund company will typically step in to avoid \"\"Breaking the Buck\"\" that could happen as a failure for that kind of fund. To wit, must ETF companies invest a dollar in the ETF for every dollar that an investor deposited in this aforesaid ETF? No, because an ETF is traded as shares on the market, unless you are using the creation/redemption mechanism for the ETF, you are buying and selling shares like most retail investors I'd suspect. If you are using the creation/redemption system then there are baskets of other securities that are being swapped either for shares in the ETF or from shares in the ETF.\"",
"title": ""
},
{
"docid": "85f152040d50f0973d1afa6b3af5da2d",
"text": "Price, whether related to a stock or ETF, has little to do with anything. The fund or company has a total value and the value is distributed among the number of units or shares. Vanguard's S&P ETF has a unit price of $196 and Schwab's S&P mutual fund has a unit price of $35, it's essentially just a matter of the fund's total assets divided by number of units outstanding. Vanguard's VOO has assets of about $250 billion and Schwab's SWPPX has assets of about $25 billion. Additionally, Apple has a share price of $100, Google has a share price of $800, that doesn't mean Google is more valuable than Apple. Apple's market capitalization is about $630 billion while Google's is about $560 billion. Or on the extreme a single share of Berkshire's Class A stock is $216,000, and Berkshire's market cap is just $360 billion. It's all just a matter of value divided by shares/units.",
"title": ""
},
{
"docid": "7018e90f14ebf67a0ee7359eff6e5b63",
"text": "First, it's not always the case that ETFs have lower expenses than the equivalent mutual funds. For example, in the Vanguard family of funds the expense ratio for the ETF version is the same as it is for the Admiral share class in the mutual fund version. With that in mind, the main advantages of a mutual fund over an equivalent ETF are: From a long-term investor's point of view, the main disadvantage of mutual funds relative to ETFs is the minimum account sizes. Especially if the fund has multiple share classes (i.e., where better classes get lower expense ratios), you might have to have quite a lot of money invested in the fund in order to get the same expense ratio as the ETF. There are some other differences that matter to more active investors (e.g., intraday trading, options, etc.), but for a passive investor the ones above are the major ones. Apart from those mutual funds and ETFs are pretty similar. Personally, I prefer mutual funds because I'm at a point where the fund minimums aren't really an issue, and I don't want to deal with the more fiddly aspects of ETFs. For investors just starting out the lower minimum investment for an ETF is a big win, as long as you can get commission-free trades (which is what I've assumed above.)",
"title": ""
},
{
"docid": "8958b5c15f7245431cc66cdfeca66ed0",
"text": "Questrade is a Canada based broker offering US stock exchange transactions as well. It says this right on their homepage. ETFs are traded like stocks, so the answer is yes. Why did you think they only offered funds?",
"title": ""
},
{
"docid": "b0d570729d6309ccf9878653379d3654",
"text": "The literal answer to your question 'what determines the price of an ETF' is 'the market'; it is whatever price a buyer is willing to pay and a seller is willing to accept. But if the market price of an ETF share deviates significantly from its NAV, the per-share market value of the securities in its portfolio, then an Authorized Participant can make an arbitrage profit by a transaction (creation or redemption) that pushes the market price toward NAV. Thus as long as the markets are operating and the APs don't vanish in a puff of smoke we can expect price will track NAV. That reduces your question to: why does NAV = market value of the holdings underlying a bond ETF share decrease when the market interest rate rises? Let's consider an example. I'll use US Treasuries because they have very active markets, are treated as risk-free (although that can be debated), and excluding special cases like TIPS and strips are almost perfectly fungible. And I use round numbers for convenience. Let's assume the current market interest rate is 2% and 'Spindoctor 10-year Treasury Fund' opens for business with $100m invested (via APs) in 10-year T-notes with 2% coupon at par and 1m shares issued that are worth $100 each. Now assume the interest rate goes up to 3% (this is an example NOT A PREDICTION); no one wants to pay par for a 2% bond when they can get 3% elsewhere, so its value goes down to about 0.9 of par (not exactly due to the way the arithmetic works but close enough) and Spindoctor shares similarly slide to $90. At this price an investor gets slightly over 2% (coupon*face/basis) plus approximately 1% amortized capital gain (slightly less due to time value) per year so it's competitive with a 3% coupon at par. As you say new bonds are available that pay 3%. But our fund doesn't hold them; we hold old bonds with a face value of $100m but a market value of only $90m. If we sell those bonds now and buy 3% bonds to (try to) replace them, we only get $90m par value of 3% bonds, so now our fund is paying a competitive 3% but NAV is still only $90. At the other extreme, say we hold the 2% bonds to maturity, paying out only 2% interest but letting our NAV increase as the remaining term (duration) and thus discount of the bonds decreases -- assuming the market interest rate doesn't change again, which for 10 years is probably unrealistic (ignoring 2009-2016!). At the end of 10 years the 2% bonds are redeemed at par and our NAV is back to $100 -- but from the investor's point of view they've forgone $10 in interest they could have received from an alternative investment over those 10 years, which is effectively an additional investment, so the original share price of $90 was correct.",
"title": ""
},
{
"docid": "b4edc4c5604999faf7ba4fa4c1f99c4d",
"text": "Behind the scenes, mutual funds and ETFs are very similar. Both can vary widely in purpose and policies, which is why understanding the prospectus before investing is so important. Since both mutual funds and ETFs cover a wide range of choices, any discussion of management, assets, or expenses when discussing the differences between the two is inaccurate. Mutual funds and ETFs can both be either managed or index-based, high expense or low expense, stock or commodity backed. Method of investing When you invest in a mutual fund, you typically set up an account with the mutual fund company and send your money directly to them. There is often a minimum initial investment required to open your mutual fund account. Mutual funds sometimes, but not always, have a load, which is a fee that you pay either when you put money in or take money out. An ETF is a mutual fund that is traded like a stock. To invest, you need a brokerage account that can buy and sell stocks. When you invest, you pay a transaction fee, just as you would if you purchase a stock. There isn't really a minimum investment required as there is with a traditional mutual fund, but you usually need to purchase whole shares of the ETF. There is inherently no load with ETFs. Tax treatment Mutual funds and ETFs are usually taxed the same. However, capital gain distributions, which are taxable events that occur while you are holding the investment, are more common with mutual funds than they are with ETFs, due to the way that ETFs are structured. (See Fidelity: ETF versus mutual funds: Tax efficiency for more details.) That having been said, in an index fund, capital gain distributions are rare anyway, due to the low turnover of the fund. Conclusion When comparing a mutual fund and ETF with similar objectives and expenses and deciding which to choose, it more often comes down to convenience. If you already have a brokerage account and you are planning on making a one-time investment, an ETF could be more convenient. If, on the other hand, you have more than the minimum initial investment required and you also plan on making additional regular monthly investments, a traditional no-load mutual fund account could be more convenient and less expensive.",
"title": ""
},
{
"docid": "8d00dd5afb4e0e6968e4d1bf071575e6",
"text": "\"ETFs purchases are subject to a bid/ask spread, which is the difference between the highest available purchase offer (\"\"bid\"\") and the lowest available sell offer (\"\"ask\"\"). You can read more about this concept here. This cost doesn't exist for mutual funds, which are priced once per day, and buyers and sellers all use the same price for transactions that day. ETFs allow you to trade any time that the market is open. If you're investing for the long term (which means you're not trying to time your buy/sell orders to a particular time of day), and the pricing is otherwise equal between the ETF and the mutual fund (which they are in the case of Vanguard's ETFs and Admiral Shares mutual funds), I would go with the mutual fund because it eliminates any cost associated with bid/ask spread.\"",
"title": ""
},
{
"docid": "4017b44214abfeae0833d19480b7807b",
"text": "\"I think that any ETF is \"\"open source\"\" -- the company issues a prospectus and publishes the basket of stocks that make up the index. The stuff that is proprietary are trading strategies and securities or deriviatives that aren't traded on the open market. Swaps, venture funds, hedge funds and other, more \"\"exotic\"\" derivatives are the things that are closed. What do you mean by \"\"open source\"\" in this context?\"",
"title": ""
}
] |
fiqa
|
d4b846166fde23ba421b050845bace61
|
What happens if a bank loses your safe deposit box?
|
[
{
"docid": "765dc468438264b52683a3b3d7dcbb3e",
"text": "Unfortunately assets placed in a safety deposit box are not covered under the Federal Deposit Insurance Program (FDIC). Unless the bank is found to be negligent in the way it handled or protected your safety deposit box, neither them nor their private insurance company will reimburse you for the loss. Find out if in the duration you had your box with them, they moved, transitioned or merged with another entity. In this specific situation, you may be able to demonstrate negligence on the part of the banks as they have seemingly misplaced your box during their transition phase, and depending upon the value of the items placed in your safety deposit box, you may be entitled to some form of recovery. Some homeowner's insurance policies may also cover the loss, but if you didn't document what you kept in the box, you have difficulty verifying proof of the value. Valuables are often lost but documents can often be reconstructed. You can get stock and bonds by paying a fee for new certificates. For wills and trusts, you can reach out to the lawyer that prepared them for a copy. You should always keep 3 copies of such documents. When you put stuff in the box, always videotape it (photographs can be challenged) but if the video shows it was put in there, although it can still be taken out by you after you turn off the camera, yields more weight in establishing content and potential value. Also know the value of the items and check with your homeowner policy to make sure the default amount covers it, if not then you may need to include a rider to add the difference in value and the video, receipts, appraisals and such will serve you well in the future in such unfortunate circumstances. If the contents of a safety deposit box are lost because you didn't pay the fee, then depending on the state you are in the time frame might vary (3 years on average), but none the less they are sent to the State's unclaimed property/funds department. You can search for these online often times or by contacting the state. It would help for you to find out which scenario you are in, their fault or yours, and proceed accordingly. Good luck.",
"title": ""
}
] |
[
{
"docid": "eb719ae661b72d91b53f9b95c0b1c77f",
"text": "In addition to there being no real guarantee on the guarantee page, note that the domain was registered on May 27, 2013, so there's no substantial track record of reliability. Finally, their Terms of Service explicitly note that they are not liable for loss of funds due to system malfunction, unauthorized access, etc. etc. Perfect Money is going out of their way to ensure they are offering no guarantees and will not be liable for any losses. How safe are your funds? You should not consider your funds to be safe if stored there. There's no guarantee you'll lose your funds, but no significant reason to believe you won't. Additionally, Perfect Money shut down access to all U.S. citizens on July 1st, 2013 with only two weeks of notice. Anyone who did not withdraw their money within this time lost access to it.",
"title": ""
},
{
"docid": "69ac9022804733592e6acd79726b8624",
"text": "You are losing something - interest on your deposit. That money you are giving to the bank is not earning interest so you are losing money considering inflation is eating into it.",
"title": ""
},
{
"docid": "0ee6c73b0deba35ce0e6b077e959d1b4",
"text": "That sucks. If BofA is taking responsibility for the insurance payment, then they should..., well, take responsibilty - full responsibility. I hope these people get reimbursed fairly. Didn't their insurance company contact them about the policy? If not, I'd certainly be shopping for a new insurance company, and possibly I'd include them in a lawsuit. The insurance company should be contacting the bank **and** their customer. Mine sent me a couple of letters, saying a copy was sent to the bank (although I think they still had the original bank, not BofA). But BofA had recently paid the premium, so they ignored it - basically dropped the ball. When I got the 2nd letter from the insurance company, I called again, and the guy at BofA got right on the ball, checked it out, and fixed it very quickly, then helped me cancel my escrow so I could handle it directly in the future. Perhaps I was lucky to get someone who cared about their job enough to follow through. But I also jumped in to make sure it got taken care of, so if he hadn't, I would have been bothering them until they did.",
"title": ""
},
{
"docid": "1d16ce2d564ec8d4ba4693beacc3f424",
"text": "If the checking account is in a FDIC insured bank or a NCUA insured Credit Union then you don't have to worry about what happens if the bank goes out of business. In the past the government has made sure that any disruption was minimal. The fraud issue can cause a bigger problem. If they get a hold of your debit card, they can drain your account. Yes the bank gives you fraud protection so that the most you can lose is $50 or $500; many even make your liability $0 if you report it in a timely manor. But there generally is a delay in getting the money put back in your account. One way to minimize the problem is to open a savings account,it also has the FDIC and NCUA coverage . The account may even earn a little interest. If you don't allow the bank to automatically provide an overdraft transfer from savings to checking account, then the most they can temporarily steal is your checking account balance. Getting a credit card can provide additional protection. It also limits your total losses if there is fraud. The bill is only paid once a month so if they steal the card or the number, they won't be able to drain the money in the bank account. The credit card, if used wisely can also start to build a positive credit file so that in a few years you can get a loan for a car or a place to live. Of course if they steal your entire wallet with both the credit and the debit card...",
"title": ""
},
{
"docid": "d631051ceeabe3f8187ffa06ffa97909",
"text": "All the transactions in your account are recorded. All the transactions in the vault account are recorded. What's not necessarily recorded is how the vault transactions are related to your account transactions. This is where the theft can be hidden for years. EDIT: And I'm willing to bet they were treating bonds as cash for accounting purposes. If so, you can't even just look at when the balances diverged.",
"title": ""
},
{
"docid": "96159077e368527db2d43f985f7595bd",
"text": "\"Your money in the bank is yours. If you lose your bank card and forget the account number, it's still yours. It's just harder to prove. If your name is Joe Smith, it might be harder to find your bank account and to prove it's yours. If \"\"go to the bank\"\" means walking into a branch of the bank and walking out with your money fifteen minutes later, that's unlikely to happen. More likely they will give you forms to fill in to maximise chances of finding your account, and tell you what evidence to bring to prove that you are the owner of the account.\"",
"title": ""
},
{
"docid": "090a7555df9f2da31550cbfdc1929cdb",
"text": "\"I would hold off on making that threat (closing your account). First, because as others have said, it's not likely to help. And second, assuming you're willing to make good on that threat, you should only play that card as a final absolute last resort, because if it fails, and you close your account, there is little to nothing else you can try to get what you want. First, talk one-on-one with a personal banker at your local BA branch. You might be surprised at how helpful they can be. Next, try talking to customer service on the phone. After that, you might try sending a letter to corporate HQ. A lot depends on the particular \"\"feature\"\" you are talking about and why they removed it. It could be that 1) the bank finds the feature is just too costly provide for free, 2) there may be a technical reason why they can no longer provide it, 3) it could be as simple as that few to none of their customers (excluding you) are actually using the feature, or 4) it could be that due to changing regulation, or market forces, no bank is offering that feature anymore. Also, while they may not care specifically about your business, the local branch has an incentive to not drive customers away if it can be reasonably avoided.\"",
"title": ""
},
{
"docid": "ec199cf207762c464059adad4d27fd60",
"text": "Withdraw your savings as cash and stuff them into your mattress? Less flippantly, would the fees for a safe deposit box at a bank big enough to hold CHF 250'000 be less than the negative interest rate that you'd be penalized with if you kept your money in a normal account?",
"title": ""
},
{
"docid": "82c0d383ab7f3d71b0b52db63afae003",
"text": "Skimmers are most likely at gas station pumps. If your debit card is compromised you are getting money taken out of your checking account which could cause a cascade of NSF fees. Never use debit card at pump. Clark Howard calls debit cards piece of trash fake visa/mc That is because of all the points mentioned above but the most important fact is back in the 60's when congress was protecting its constituents they made sure that the banks were responsible for fraud and maxed your liability at $50. Debit cards were introduced much later when congress was interested in protecting banks. So you have no protection on your debit card and if they find you negligent with your card they may not replace the stolen funds. I got rid of my debit card and only have an ATM card. So it cannot be used in stores which means you have to know the pin and then you can only get $200 a day.",
"title": ""
},
{
"docid": "fe5cc026007dcec1e20591574cf671a4",
"text": "Nothing happens. A bank is a business; your relationship with the bank doesn't change because your visa or immigration status changes. Money held in the account is still held in the account. Interest paid on the account is still taxable. And so on. If the account is inactive long enough, abandoned account rules may apply, but that still has nothing to do with your status.",
"title": ""
},
{
"docid": "2fb158ab050f2b28ac72475487eec324",
"text": "Banks may still honor the check, depending on state law. Your obligation to pay has not been fulfilled. To get your money back, you need to wait a specified period of time and file a document reporting the check lost. There is probably a fee for this service.",
"title": ""
},
{
"docid": "4f8f5fa9a7144cf472c4d3c3c924557d",
"text": "\"The point here is actually about banks, or is in reference to banks. They expect you know how a savings account at a bank works, but not mutual funds, and so are trying to dispel an erroneous notion that you might have -- that the CBIC will insure your investment in the fund. Banks work by taking in deposits and lending that money out via mortgages. The mortgages can last up to 30 years, but the deposits are \"\"on demand\"\". Which means you can pull your money out at any time. See the problem? They're maintaining a fiction that that money is there, safe and sound in the bank vault, ready to be returned whenever you want it, when in fact it's been loaned out. And can't be called back quickly, either. They know only a little bit of that money will be \"\"demanded\"\" by depositors at any given time, so they keep a percentage called a \"\"reserve\"\" to satisfy that, er, demand. The rest, again, is loaned out. Gone. And usually that works out just fine. Except sometimes it doesn't, when people get scared they might not get their money back, and they all go to the bank at the same time to demand their on-demand deposits back. This is called a \"\"run on the bank\"\", and when that happens, the bank \"\"fails\"\". 'Cause it ain't got the money. What's failing, in fact, is the fiction that your money is there whenever you want it. And that's really bad, because when that happens to you at your bank, your friends the customers of other banks start worrying about their money, and run on their banks, which fail, which cause more people to worry and try to get their cash out, lather, rinse repeat, until the whole economy crashes. See -- The Great Depression. So, various governments introduced \"\"Deposit Insurance\"\", where the government will step in with the cash, so when you panic and pull all your money out of the bank, you can go home happy, cash in hand, and don't freak all your friends out. Therefore, the fear that your money might not really be there is assuaged, and it doesn't spread like a mental contagion. Everyone can comfortably go back to believing the fiction, and the economy goes back to merrily chugging along. Meanwhile, with mutual funds & ETFs, everyone understands the money you put in them is invested and not sitting in a gigantic vault, and so there's no need for government insurance to maintain the fiction. And that's the point they're trying to make. Poorly, I might add, where their wording is concerned.\"",
"title": ""
},
{
"docid": "1f5e0eafbf4a4f511c5b3cc702ad1061",
"text": "\"Most likely the bank will keep it on file for a few years then turn it over to the state as \"\"unclaimed property\"\". I can't speak for all states though.\"",
"title": ""
},
{
"docid": "979a7afcff571abf2bab1590b05a252b",
"text": "\"If there was still money in the account when it was closed, the bank would have turned over the cash to the state where they operated. Search Google for \"\"unclaimed property <state name>\"\" for the unclaimed property department of the state. The state's website will show if there is money for you.\"",
"title": ""
},
{
"docid": "c8573a8d7fb74832b7b1cc1f8d917b10",
"text": "You are asking about what happens when an ETF/mutual fund company goes bankrupt. If you were asking about a bank account you would be asking about FDIC coverage. Investment funds are different, the closest thing to FDIC protection is provided by Securities Investors Protection Corporation (SIPC) SIPC was created under the Securities Investor Protection Act as a non-profit membership corporation. SIPC oversees the liquidation of member broker-dealers that close when the broker-dealer is bankrupt or in financial trouble, and customer assets are missing. In a liquidation under the Securities Investor Protection Act, SIPC and the court-appointed Trustee work to return customers’ securities and cash as quickly as possible. Within limits, SIPC expedites the return of missing customer property by protecting each customer up to $500,000 for securities and cash (including a $250,000 limit for cash only). SIPC is an important part of the overall system of investor protection in the United States. While a number of federal and state securities agencies and self-regulatory organizations deal with cases of investment fraud, SIPC's focus is both different and narrow: restoring customer cash and securities left in the hands of bankrupt or otherwise financially troubled brokerage firms. SIPC was not chartered by Congress to combat fraud. Although created under a federal law, SIPC is not an agency or establishment of the United States Government, and it has no authority to investigate or regulate its member broker-dealers. It is important to understand that SIPC is not the securities world equivalent of the Federal Deposit Insurance Corporation (FDIC), which insures depositors of insured banks.",
"title": ""
}
] |
fiqa
|
9f64749b324b7f94b11268656b59c5ae
|
Pros/cons for buying gold vs. saving money in an interest-based account?
|
[
{
"docid": "799a9ee5e202bf0686256b32b8c4a361",
"text": "\"As Michael McGowan says, just because gold has gone up lots recently does not mean it will continue to go up by the same amount. This plot: shows that if your father had bought $20,000 in gold 30 years ago, then 10 years ago he would have slightly less than $20,000 to show for it. Compare that with the bubble in real estate in the US: Update: I was curious about JoeTaxpayer's question: how do US house prices track against US taxpayer's ability to borrow? To try to answer this, I used the house price data from here, the 30 year fixed mortgages here and the US salary information from here. To calculate the \"\"ability to borrow\"\" I took the US hourly salary information, multiplied by 2000/12 to get a monthly salary. I (completely arbitrarily) assumed that 25 per cent of the monthly salary would be used on mortgage payments. I then used Excel's \"\"PV\"\" (Present Value) function to calculate the present value of the thirty year fixed rate mortgage. The resulting graph is below. The correlation coefficient between the two plots is 0.93. There are so many caveats on what I've done in ~15 minutes, I don't want to list them... but it certainly \"\"gives one furiously to think\"\" !! Update 2: OK, so even just salary information correlates very well with the house price increases. And looking at the differences, we can see that perhaps there was a spike or bubble in house prices over and above what might be expected from salary-only or ability-to-borrow.\"",
"title": ""
},
{
"docid": "99c8e924a6429b9e56cd3a540c31c768",
"text": "\"There's too much here for one question. So no answer can possibly be comprehensive. I think little of gold for the long term. I go to MoneyChimp and see what inflation did from 1974 till now. $1 to $4.74. So $200 inflates to $950 or so. Gold bested that, but hardly stayed ahead in a real way. The stock market blew that number away. And buying gold anytime around the 1980 runup would still leave you behind inflation. As far as housing goes, I have a theory. Take median income, 25% of a month's pay each month. Input it as the payment at the going 30yr fixed rate mortgage. Income rises a bit faster than inflation over time, so that line is nicely curved slightly upward (give or take) but as interest rates vary, that same payment buys you far more or less mortgage. When you graph this, you find the bubble in User210's graph almost non-existent. At 12% (the rate in '85 or so) $1000/mo buys you $97K in mortgage, but at 5%, $186K. So over the 20 years from '85 to 2005, there's a gain created simply by the fact that money was cheaper. No mania, no bubble (not at the median, anyway) just the interest rate effect. Over the same period, inflation totaled 87%. So the same guy just keeping up with inflation in his pay could then afford a house that was 3.5X the price 20 years prior. I'm no rocket scientist, but I see few articles ever discussing housing from this angle. To close my post here, consider that homes have grown in size, 1.5%/yr on average. So the median new home quoted is actually 1/3 greater in size in 2005 than in '85. These factors all need to be normalized out of that crazy Schiller-type* graph. In the end, I believe the median home will always tightly correlate to the \"\"one week income as payment.\"\" *I refer here to the work of professor Robert Schiller partner of the Case-Schiller index of home prices which bears his name.\"",
"title": ""
},
{
"docid": "493570ee85e4ae71f109ba9f05e40ae9",
"text": "Just because gold performed that well in the past does not mean it will perform that well in the future. I'm not saying you should or should not buy gold, but the mere fact that it went up a lot recently is not sufficient reason to buy it. Also note that on the house, an investment that accrues continuous interest for 30 years at an annual rate of about 7.7% will multiply by a factor of 10 in 30 years. That rate is pretty high by today's standards, but it might have been more feasible in the past (I don't know historical interest rates very well). Yet again note that the fact that houses went up a lot over the last 30 years does not mean they will continue to do so.",
"title": ""
},
{
"docid": "c3c3f7d8b8ea34d9e2946cdc47094ef5",
"text": "What you are seeing is the effects of inflation. As money becomes less valuable it takes more of it to buy physical things, be they commodities, shares in a company's stock, and peoples time (salaries). Just about the only thing that doesn't track inflation to some degree is cash itself or money in an account since that is itself what is being devalued. So the point of all this is, buying anything (a house, gold, stocks) that doesn't depreciate (a car) is something of a hedge against inflation. However, don't be tricked (as many are) into thinking that house just made you a tidy sum just because it went up in value so much over x years. Remember 1) All the other houses and things you'd spend the money on are a lot more expensive now too; and 2) You put a lot more money into a house than the mortgage payment (taxes, insurance, maintenance, etc.) I'm with the others though. Don't get caught up in the gold bubble. Doing so now is just speculation and has a lot of risk associated with it.",
"title": ""
}
] |
[
{
"docid": "522126a55f542900e3ee89f63cfd3395",
"text": "\"Given the current low interest rates - let's assume 4% - this might be a viable option for a lot of people. Let's also assume that your actual interest rate after figuring in tax considerations ends up at around 3%. I think I am being pretty fair with the numbers. Now every dollar that you save each month based on the savings and invest with a higher net return of greater than 3% will in fact be \"\"free money\"\". You are basically betting on your ability to invest over the 3%. Even if using a conservative historical rate of return on the market you should net far better than 3%. This money would be significant after 10 years. Let's say you earn an average of 8% on your money over the 10 years. Well you would have an extra $77K by doing interest only if you were paying on average of $500 a month towards interest on a conventional loan. That is a pretty average house in the US. Who doesn't want $77K (more than you would have compared to just principal). So after 10 years you have the same amount in principal plus $77k given that you take all of the saved money and invest it at the constraints above. I would suggest that people take interest only if they are willing to diligently put away the money as they had a conventional loan. Another scenario would be a wealthier home owner (that may be able to pay off house at any time) to reap the tax breaks and cheap money to invest. Pros: Cons: Sidenote: If people ask how viable is this. Well I have done this for 8 years. I have earned an extra 110K. I have smaller than $500 I put away each month since my house is about 30% owned but have earned almost 14% on average over the last 8 years. My money gets put into an e-trade account automatically each month from there I funnel it into different funds (diversified by sector and region). I literally spend a few minutes a month on this and I truly act like the money isn't there. What is also nice is that the bank will account for about half of this as being a liquid asset when I have to renegotiate another loan.\"",
"title": ""
},
{
"docid": "701044a51a7f47011eb598f92c1ca560",
"text": "Gold's valuation is so stratospheric right now that I wonder if negative numbers (as in, you should short it) are acceptable in the short run. In the long run I'd say the answer is zero. The problem with gold is that its only major fundamental value is for making jewelry and the vast majority is just being hoarded in ways that can only be justified by the Greater Fool Theory. In the long run gold shouldn't return more than inflation because a pile of gold creates no new wealth like the capital that stocks are a claim on and doesn't allow others to create new wealth like money lent via bonds. It's also not an important and increasingly scarce resource for wealth creation in the global economy like oil and other more useful commodities are. I've halfway-thought about taking a short position in gold, though I haven't taken any position, short or long, in gold for the following reasons: Straight up short-selling of a gold ETF is too risky for me, given its potential for unlimited losses. Some other short strategy like an inverse ETF or put options is also risky, though less so, and ties up a lot of capital. While I strongly believe such an investment would be profitable, I think the things that will likely rise when the flight-to-safety is over and gold comes back to Earth (mainly stocks, especially in the more beaten-down sectors of the economy) will be equally profitable with less risk than taking one of these positions in gold.",
"title": ""
},
{
"docid": "8ac2209c513ee6c964e7277b426315ba",
"text": "Gold is a commodity. It has a tracked price and can be bought and sold as such. In its physical form it represents something real of signifigant value that can be traded for currency or barted. A single pound of gold is worth about 27000 dollars. It is very valuable and it is easily transported as opposed to a car which loses value while you transport it. There are other metals that also hold value (Platinum, Silver, Copper, etc) as well as other commodities. Platinum has a higher Value to weight ratio than gold but there is less of a global quantity and the demand is not as high. A gold mine is an investement where you hope to take out more in gold than it cost to get it out. Just like any other business. High gold prices simply lower your break even point. TIPS protects you from inflation but does not protect you from devaluation. It also only pays the inflation rate recoginized by the Treasury. There are experts who believe that the fed has understated inflation. If these are correct then TIPS is not protecting its investors from inflation as promised. You can also think of treasury bonds as an investment in your government. Your return will be effectively determined by how they run their business of governing. If you believe that the government is doing the right things to help promote the economy then investing in their bonds will help them to be able to continue to do so. And if consumers buy the bonds then the treasury does not have to buy any more of its own.",
"title": ""
},
{
"docid": "f27db9be9f670568435ea70473cb7ef7",
"text": "Well, people have been saying interest rates have to go up for years now and have been wrong so far. Also there is an opportunity cost in waiting to buy - if another five years passes with nothing happen, you earn 0% on checking accounts, but at least earn 1.65% per year or so on your 10y bond.",
"title": ""
},
{
"docid": "e99561df31a588a4c5bc1887c090010d",
"text": "\"Invest in gold. Maybe will not \"\"make\"\" money but at least preserve the value.\"",
"title": ""
},
{
"docid": "029604fb1bc4681115e58f3ce904a708",
"text": "Gold's value starts with the fact that its supply is steady and by nature it's durable. In other words, the amount of gold traded each year (The Supply and Demand) is small relative to the existing total stock. This acting as a bit of a throttle on its value, as does the high cost of mining. Mines will have yields that control whether it's profitable to run them. A mine may have a $600/oz production cost, in which case it's clear they should run full speed now with gold at $1200, but if it were below $650 or so, it may not be worth it. It also has a history that goes back millennia, it's valued because it always was. John Maynard Keynes referred to gold as an archaic relic and I tend to agree. You are right, the topic is controversial. For short periods, gold will provide a decent hedge, but no better than other financial instruments. We are now in an odd time, where the stock market is generally flat to where it was 10 years ago, and both cash or most commodities were a better choice. Look at sufficiently long periods of time, and gold fails. In my history, I graduated college in 1984, and in the summer of 82 played in the commodities market. Gold peaked at $850 or so. Now it's $1200. 50% over 30 years is hardly a storehouse of value now, is it? Yet, I recall Aug 25, 1987 when the Dow peaked at 2750. No, I didn't call the top. But I did talk to a friend advising that I ignore the short term, at 25 with little invested, I only concerned myself with long term plans. The Dow crashed from there, but even today just over 18,000 the return has averaged 7.07% plus dividends. A lengthy tangent, but important to understand. A gold fan will be able to produce his own observation, citing that some percent of one's holding in gold, adjusted to maintain a balanced allocation would create more positive returns than I claim. For a large enough portfolio that's otherwise well diversified, this may be true, just not something I choose to invest in. Last - if you wish to buy gold, avoid the hard metal. GLD trades as 1/10 oz of gold and has a tiny commission as it trades like a stock. The buy/sell on a 1oz gold piece will cost you 4-6%. That's no way to invest. Update - 29 years after that lunch in 1987, the Dow was at 18448, a return of 6.78% CAGR plus dividends. Another 6 years since this question was asked and Gold hasn't moved, $1175, and 6 years' worth of fees, 2.4% if you buy the GLD ETF. From the '82 high of $850 to now (34 years), the return has a CAGR of .96%/yr or .56% after fees. To be fair, I picked a relative high, that $850. But I did the same choosing the pre-crash 2750 high on the Dow.",
"title": ""
},
{
"docid": "347d5c851c80fcd03aeb5473b2a53959",
"text": "\"IRAs have huge tax-advantages. You'll pay taxes when you liquidate gold and silver. While volatile, \"\"the stock market has never produced a loss during any rolling 15-year period (1926-2009)\"\" [PDF]. This is perhaps the most convincing article for retirement accounts over at I Will Teach You To Be Rich. An IRA is just a container for your money and you may invest the money however you like (cash, stocks, funds, etc). A typical investment is the purchase of stocks, bonds, and/or funds containing either or both. Stocks may pay dividends and bonds pay yields. Transactions of these things trigger capital gains (or losses). This happens if you sell or if the fund manager sells pieces of the fund to buy something in its place (i.e. transactions happen without your decision and high turnover can result in huge capital gains). In a taxable account you will pay taxes on dividends and capital gains. In an IRA you don't ever pay taxes on dividends and capital gains. Over the life of the IRA (30+ years) this can be a huge ton of savings. A traditional IRA is funded with pre-tax money and you only pay tax on the withdrawal. Therefore you get more money upfront to invest and more money compounds into greater amounts faster. A Roth IRA you fund with after-tax dollars, but your withdrawals are tax free. Traditional versus Roth comparison calculator. Here are a bunch more IRA and 401k calculators. Take a look at the IRA tax savings for various amounts compared to the same money in a taxable account. Compounding over time will make you rich and there's your reason for starting young. Increases in the value of gold and silver will never touch compounded gains. So tax savings are a huge reason to stash your money in an IRA. You trade liquidity (having to wait until age 59.5) for a heck of a lot more money. Though isn't it nice to be assured that you will have money when you retire? If you aren't going to earn it then, you'll have to earn it now. If you are going to earn it now, you may as well put it in a place that earns you even more. A traditional IRA has penalties for withdrawing before retirement age. With a Roth you can withdraw the principal at anytime without penalty as long as the account has been open 5 years. A traditional IRA requires you take out a certain amount once you reach retirement. A Roth doesn't, which means you can leave money in the account to grow even more. A Roth can be passed on to a spouse after death, and after the spouse's death onto another beneficiary. more on IRA Required Minimum Distributions.\"",
"title": ""
},
{
"docid": "5ec249d15cdf8b304ba16f6bff83fc77",
"text": "\"Nobody can give you a definitive answer. To those who suggest it's expensive at these prices, [I'd point to this chart](http://treo.typepad.com/.a/6a0120a6002285970c014e8c39f2c3970d-850wi) showing the price of gold versus the global money supply over the past decade or so. It's not conclusive, but it's evidence that gold tracks the money supply relatively well. There might be a bit of risk premium baked in that it would shed in a stable economy, but that premium is unknowable. It's also (imo) probably worth the protection it provides. In an inflationary scenario (Euro devaluation) gold will hold its buying power very well. It also fares well in a deflationary environment, just not quite as well as holding physical currency. Note that in such an environment, bank defaults are a big danger: that 50k might only be safe under your mattress (rather than in a fractionally reserved bank account). If you're buying gold, certificates aren't exactly a bad option, although there still exists the counterparty risk of the agent storing your gold, as well as political risk of the nation where it's being held. Buying physical bullion ameliorates these risks, but then you face the problem of protecting it. Safe deposit boxes, a home safe, or burying it in your backyard are all possible options. The merits of each, I'll leave as an exerice to the reader. Foreign currency might be a little bit better than the Euro, but as we've seen in the past year or so, the Swiss Franc has been devalued to match the Euro in the proverbial \"\"race to the bottom\"\". It's probably not much better than another fiat currency. I don't know anything about Norway. Edit: Depending on your time horizon, my personal opinion would be to put no less than 5-10% of your savings in a hard store of value (e.g. gold, silver, platinum). Depending on your risk appetite, you could probably stand to put a lot more into it, especially given the Eurozone turmoil. Of course, as with anything else, your mileage may vary, past performance does not guarantee future results, this is not investment advice, seek professional medical help if you experience an erection lasting longer than four hours.\"",
"title": ""
},
{
"docid": "edf4fba292caeb83937280fef7ca1934",
"text": "\"The general argument put forward by gold lovers isn't that you get the same gold per dollar (or dollars per ounce of gold), but that you get the same consumable product per ounce of gold. In other words the claim is that the inflation-adjusted price of gold is more-or-less constant. See zerohedge.com link for a chart of gold in 2010 GBP all the way from 1265. (\"\"In 2010 GBP\"\" means its an inflation adjusted chart.) As you can see there is plenty of fluctuation in there, but it just so happens that gold is worth about the same now as it was in 1265. See caseyresearch.com link for a series of anecdotes of the buying power of gold and silver going back some 3000 years. What this means to you: If you think the stock market is volatile and want to de-risk your holdings for the next 2 years, gold is just as risky If you want to invest some wealth such that it will be worth more (in real terms) when you take it out in 40 years time than today, the stock market has historically given better returns than gold If you want to put money aside, and it to not lose value, for a few hundred years, then gold might be a sensible place to store your wealth (as per comment from @Michael Kjörling) It might be possible to use gold as a partial hedge against the stock market, as the two supposedly have very low correlation\"",
"title": ""
},
{
"docid": "dd8e5ca4888ff871a3b76ce481bb3bd5",
"text": "\"First of all, bear in mind that there's no such thing as a risk-free investment. If you keep your money in the bank, you'll struggle to get a return that keeps up with inflation. The same is true for other \"\"safe\"\" investments like government bonds. Gold and silver are essentially completely speculative investments; over the years their price tends to vary quite wildly, so unless you really understand how those markets work you should steer well clear. They're certainly not low risk. Repeatedly buying a property to sell in a couple of years time is almost certainly a bad idea; you'll end up paying substantial transaction fees each time that would wipe out a lot of the possible profit, and of course there's always the risk that prices would go down not up. Buying a property to keep - and preferably live in - might be a decent option once you have a good deposit saved up. It's very hard to say where prices will go in future, on the one hand London prices are very high by historical standards, but on the other hand supply is likely to remain severely constrained for years to come. I tend to think of a house as something that I need one of for the rest of my life, and so in one sense not owning a house to live in is a gamble that house prices and rents won't go up substantially. If you own a house, you're insulated from changes in rent etc and even if prices crash at least you still have somewhere to live. However that argument only works really well if you expect to keep living in the same area under most circumstances - house prices might crash in your area but not elsewhere.\"",
"title": ""
},
{
"docid": "5e202bfb617d559d8a4363c6f6ce12c3",
"text": "\"I don't think there is a recession proof investment.Every investment is bound to their ups and downs. If you buy land, a change in law can change the whole situation it may become worthless, same applies for home as well. Gold - dependent on world economy. Stock - dependent on world economy Best way is to stay ever vigilant of world around you and keep shuffling from one investment to another balance out your portfolio. \"\"The most valuable commodity I know of is information.\"\" - Wall Street -movie\"",
"title": ""
},
{
"docid": "08a7e80ef513aa042d2107370f60bbf5",
"text": "\"I pretty much only use my checking. What's the downside? Checking accounts don't pay as much interest as savings account. Oh, but wait, interest rates have been zero for nearly 10 years. So there is very little benefit to keeping money in my savings account. In fact, I had two savings accounts, and Well Fargo closed one of them because I hadn't used it in years. Downsides of savings accounts: You are limited to 5 transfers per month into or out of them. No such limit with checking. Upsides of savings accounts: Well, maybe you will be less likely to spend the money. Why don't you just have your pay go into your checking and then just transfer \"\"extra money\"\" out of it, rather than the reverse? If you want to put money \"\"away\"\" so that you save it, assuming you're in the U.S.A., open a traditional IRA. Max deposit of $5500/year, and it reduces your taxable income. It's not a bad idea to have a separate account that you don't touch except for in an emergency. But, for me, the direction of flow is from work, to checking, to savings.\"",
"title": ""
},
{
"docid": "b117ffc4be3b40ef6e57f576be646797",
"text": "\"It may seem like you cannot live without this trip, but borrowing money is a bad habit to get into. Especially for things like vacations. Your best bet is to save up money and only ever pay cash for things that will decrease in value. Please note that while it is a bad idea to borrow money for things that decrease in value, the \"\"opposite\"\" is not necessarily true. That is, it is not necessarily a good idea to borrow money for things that will increase in value; or, will earn you income. False assumptions can cloud our judgement. The housing bubble and the stock market crash of 1929 are two examples, but there are many others.\"",
"title": ""
},
{
"docid": "ab6cc8d9826ecf75e8add750017c25d1",
"text": "\"Don't put all your eggs in one basket and don't assume that you know more than the market does. The probability of gold prices rising again in the near future is already \"\"priced in\"\" as it were. Unless you are privy to some reliable information that no one else knows (given that you are asking here, I'm guessing not), stay away. Invest in a globally diversified low cost portfolio of primarily stocks and bonds and don't try to predict the future. Also I would kill for a 4.5% interest rate on my savings. In the USA, 1% is on the high side of what you can get right now. What is inflation like over there?\"",
"title": ""
},
{
"docid": "51f09d8025fb86f43c74dfdb82941039",
"text": "\"Two points: One, yes -- the price of gold has been going up. [gold ETF chart here](http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1349467200000&chddm=495788&chls=IntervalBasedLine&q=NYSEARCA:IAU&ntsp=0&ei=PQhvUMjiAZGQ0QG5pQE) Two, the US has confiscated gold in the past. They did it in the 1930s. Owning antique gold coins is stupid because you're paying for gold + the supply / demand imbalance forced upon that particular coin by the coin collector market. If you want to have exposure to gold in your portfolio, the cheapest way is through an ETF. If you want to own physical gold because a) it's shiny or b) you fear impending economic collapse -- you're probably better off with bullion from a reputable dealer. You can buy it in grams or ounces -- you can also buy it in coins. Physical gold will generally cost you a little more than the spot price (think 5% - 10%? -- not really sure) but it can vary wildly. You might even be able to buy it for under the spot price if you find somebody that isn't very bright willing to sell. Buyer beware though -- there are lots of shady folks in the \"\"we buy gold\"\" market.\"",
"title": ""
}
] |
fiqa
|
f19bf3baa4e05dd3d9f8844b88b0c928
|
Does keeping 'long-term' safety net in bonds make sense?
|
[
{
"docid": "bab6ea73a159b162acf0efe1a8be6b24",
"text": "\"The answer to your question depends very much on your definition of \"\"long-term\"\". Because let's make something clear: an investment horizon of three to six months is not long term. And you need to consider the length of time from when an \"\"emergency\"\" develops until you will need to tap into the money. Emergencies almost by definition are unplanned. When talking about investment risk, the real word that should be used is volatility. Stocks aren't inherently riskier than bonds issued by the same company. They are likely to be a more volatile instrument, however. This means that while stocks can easily gain 15-20 percent or more in a year if you are lucky (as a holder), they can also easily lose just as much (which is good if you are looking to buy, unless the loss is precipitated by significantly weaker fundamentals such as earning lookout). Most of the time stocks rebound and regain lost valuation, but this can take some time. If you have to sell during that period, then you lose money. The purpose of an emergency fund is generally to be liquid, easily accessible without penalties, stable in value, and provide a cushion against potentially large, unplanned expenses. If you live on your own, have good insurance, rent your home, don't have any major household (or other) items that might break and require immediate replacement or repair, then just looking at your emergency fund in terms of months of normal outlay makes sense. If you own your home, have dependents, lack insurance and have major possessions which you need, then you need to factor those risks into deciding how large an emergency fund you might need, and perhaps consider not just normal outlays but also some exceptional situations. What if the refrigerator and water heater breaks down at the same time that something breaks a few windows, for example? What if you also need to make an emergency trip near the same time because a relative becomes seriously ill? Notice that the purpose of the emergency fund is specifically not to generate significant interest or dividend income. Since it needs to be stable in value (not depreciate) and liquid, an emergency fund will tend towards lower-risk and thus lower-yield investments, the extreme being cash or the for many more practical option of a savings account. Account forms geared toward retirement savings tend to not be particularly liquid. Sure, you can usually swap out one investment vehicle for another, but you can't easily withdraw your money without significant penalties if at all. Bonds are generally more stable in value than stocks, which is a good thing for a longer-term portion of an emergency fund. Just make sure that you are able to withdraw the money with short notice without significant penalties, and pick bonds issued by stable companies (or a fund of investment-grade bonds). However, in the present investment climate, this means that you are looking at returns not significantly better than those of a high-yield savings account while taking on a certain amount of additional risk. Bonds today can easily have a place if you have to pick some form of investment vehicle, but if you have the option of keeping the cash in a high-yield savings account, that might actually be a better option. Any stock market investments should be seen as investments rather than a safety net. Hopefully they will grow over time, but it is perfectly possible that they will lose value. If what triggers your financial emergency is anything more than local, it is certainly possible to have that same trigger cause a decline in the stock market. Money that you need for regular expenses, even unplanned ones, should not be in investments. Thus, you first decide how large an emergency fund you need based on your particular situation. Then, you build up that amount of money in a savings vehicle rather than an investment vehicle. Once you have the emergency fund in savings, then by all means continue to put the same amount of money into investments instead. Just make sure to, if you tap into the emergency fund, replenish it as quickly as possible.\"",
"title": ""
},
{
"docid": "9b06e7307088dc7210864a5d44d88371",
"text": "I am understanding the OP to mean that this is for an emergency fund savings account meant to cover 3 to 6 months of living expenses, not a 3-6 month investment horizon. Assuming this is the case, I would recommend keeping these funds in a Money Market account and not in an investment-grade bond fund for three reasons:",
"title": ""
}
] |
[
{
"docid": "5b70a0767127af96e29b1b5b41b93e99",
"text": "\"I can think of a few reasons for this. First, bonds are not as correlated with the stock market so having some in your portfolio will reduce volatility by a bit. This is nice because it makes you panic less about the value changes in your portfolio when the stock market is acting up, and I'm sure that fund managers would rather you make less money consistently then more money in a more volatile way. Secondly, you never know when you might need that money, and since stock market crashes tend to be correlated with people losing their jobs, it would be really unfortunate to have to sell off stocks when they are under-priced due to market shenanigans. The bond portion of your portfolio would be more likely to be stable and easier to sell to help you get through a rough patch. I have some investment money I don't plan to touch for 20 years and I have the bond portion set to 5-10% since I might as well go for a \"\"high growth\"\" position, but if you're more conservative, and might make withdrawals, it's better to have more in bonds... I definitely will switch over more into bonds when I get ready to retire-- I'd rather have slow consistent payments for my retirement than lose a lot in an unexpected crash at a bad time!\"",
"title": ""
},
{
"docid": "9e6a893421677586f657499d3a01381b",
"text": "\"It sounds like you want a place to park some money that's reasonably safe and liquid, but can sustain light to moderate losses. Consider some bond funds or bond ETFs filled with medium-term corporate bonds. It looks like you can get 3-3.5% or so. (I'd skip the municipal bond market right now, but \"\"why\"\" is a matter for its own question). Avoid long-term bonds or CDs if you're worried about inflation; interest rates will rise and the immediate value of the bonds will fall until the final payout value matches those rates.\"",
"title": ""
},
{
"docid": "90cf653a01b6f9a034dc013a6e16605f",
"text": "\"value slip below vs \"\"equal a bank savings account’s safety\"\" There is no conflict. The first author states that money market funds may lose value, precisely due to duration risk. The second author states that money market funds is as safe as a bank account. Safety (in the sense of a bond/loan/credit) mostly about default risk. For example, people can say that \"\"a 30-year U.S. Treasury Bond is safe\"\" because the United States \"\"cannot default\"\" (as said in the Constitution/Amendments) and the S&P/Moody's credit rating is the top/special. Safety is about whether it can default, ex. experience a -100% return. Safety does not directly imply Riskiness. In the example of T-Bond, it is ultra safe, but it is also ultra risky. The volatility of 30-year T-Bond could be higher than S&P 500. Back to Money Market Funds. A Money Market Fund could hold deposits with a dozen of banks, or hold short term investment grade debt. Those instruments are safe as in there is minimal risk of default. But they do carry duration risk, because the average duration of the instrument the fund holds is not 0. A money market fund must maintain a weighted average maturity (WAM) of 60 days or less and not invest more than 5% in any one issuer, except for government securities and repurchase agreements. If you have $10,000,000, a Money Market Fund is definitely safer than a savings account. 1 Savings Account at one institution with amount exceeding CDIC/FDIC terms is less safe than a Money Market Fund (which holds instruments issued by 20 different Banks). Duration Risk Your Savings account doesn't lose money as a result of interest rate change because the rate is set by the bank daily and accumulated daily (though paid monthly). The pricing of short term bond is based on market expectation of the interest rates in the future. The most likely cause of Money Market Funds losing money is unexpected change in expectation of future interest rates. The drawdown (max loss) is usually limited in terms of percentage and time through examining historical returns. The rule of thumb is that if your hold a fund for 6 months, and that fund has a weighted average time to maturity of 6 months, you might lose money during the 6 months, but you are unlikely to lose money at the end of 6 months. This is not a definitive fact. Using GSY, MINT, and SHV as an example or short duration funds, the maximum loss in the past 3 years is 0.4%, and they always recover to the previous peak within 3 months. GSY had 1.3% per year return, somewhat similar to Savings accounts in the US.\"",
"title": ""
},
{
"docid": "e2174f138c71e1504c17ffbbe56eb991",
"text": "\"If I don't need this money for decades, meaning I can ride out periodical market crashes, why would I invest in bonds instead of funds that track broad stock market indexes? You wouldn't. But you can never be 100% sure that you really won't need the money for decades. Also, even if you don't need it for decades, you can never be 100% certain that the market will not be way down at the time, decades in the future, when you do need the money. The amount of your portfolio you allocate to bonds (relative to stocks) can be seen as a measure of your desire to guard against that uncertainty. I don't think it's accurate to say that \"\"the general consensus is that your portfolio should at least be 25% in bonds\"\". For a young investor with high risk tolerance, many would recommend less than that. For instance, this page from T. Rowe Price suggests no more than 10% bonds for those in their 20s or 30s. Basically you would put money into bonds rather than stocks to reduce the volatility of your portfolio. If you care only about maximizing return and don't care about volatility, then you don't have to invest in bonds. But you probably actually do care about volatility, even if you don't think you do. You might not care enough to put 25% in bonds, but you might care enough to put 10% in bonds.\"",
"title": ""
},
{
"docid": "bd4931e1968953260f3368e895dd5e48",
"text": "Bonds provide protections against stock market crashes, diversity and returns as the other posters have said but the primary reason to invest in bonds is to receive relatively guaranteed income. By that I mean you receive regular payments as long as the debtor doesn't go bankrupt and stop paying. Even when this happens, bondholders are the first in line to get paid from the sale of the business's assets. This also makes them less risky. Stocks don't guarantee income and shareholders are last in line to get paid. When a stock goes to zero, you lose everything, where as a bondholder will get some face value redemption to the notes issue price and still keep all the previous income payments. In addition, you can use your bond income to buy more shares of stock and increase your gains there.",
"title": ""
},
{
"docid": "db66be504a892bc3ea02c50fdb954cbc",
"text": "\"In the quoted passage, the bonds are \"\"risky\"\" because you CAN lose money. Money markets can be insured by the FDIC, and thus are without risk in many instances. In general, there are a few categories of risks that affect bonds. These include: The most obvious general risk with long-term bonds versus short-term bonds today is that rates are historically low.\"",
"title": ""
},
{
"docid": "e82749a12bb0dc7acbcdae7eb3ee76e6",
"text": "\"For most people \"\"home ownership\"\" is a long term lifestyle strategy (i.e. the intention is to own a home for several decades, regardless of how many times one particular house might be \"\"swapped\"\" for a different one. In an economic environment with steady monetary inflation, taking out a long-term loan backed by a tangible non-depreciating \"\"permanent\"\" asset (e.g. real estate) is in practice a form of investing not borrowing, because over time the monetary value of the asset will increase in line with inflation, but the size of the loan remains constant in money terms. That strategy was always at risk in the short term because of temporary falls in house prices, but long-term inflation running at say 5% per year would cancel out even a 20% fall in house prices in 4 years. Downturns in the economy were often correlated with rises in the inflation rate, which fixed the short-term problem even faster. Car and student loans are an essentially different financial proposition, because you know from the start that the asset will not retain its value (unless you are \"\"investing in a vintage car\"\" rather than \"\"buying a means of personal transportation\"\", a new car will lose most of its monetary value within say 5 years) or there is no tangible asset at all (e.g. taking out a student loan, paying for a vacation trip by credit card, etc). The \"\"scariness\"\" over home loans was the widespread realization that the rules of the game had been changed permanently, by the combination of an economic downturn plus national (or even international) financial policies designed to enforce low inflation rates - with the consequence that \"\"being underwater\"\" had been changed from a short term problem to a long-term one.\"",
"title": ""
},
{
"docid": "7dec0fda4f7e40dbdf163ab81de3f0b1",
"text": "\"Depends on your definition of \"\"secure\"\". The most \"\"secure\"\" investment from a preservation of principal point of view is a non-tradable, general obligation government bond. (Like a US or Canadian savings bond.) Why? There is no interest rate risk -- you can't lose money. The downside is that the rate is not so good. If you want returns and a reasonably high level of security, you need a diversified portfolio.\"",
"title": ""
},
{
"docid": "dca1559289fffc177eda19252b171f5f",
"text": "Your goals are mutually exclusive. You cannot both earn a return that will outpace inflation while simultaneously having zero-risk of losing money, at least not in the 2011 market. In 2008, a 5+% CD would have been a good choice. Here's a potential compromise... sacrifice some immediate liquidity for more earnings. Say you had $10,000 saved: In this scheme, you've diversified a little bit, have access to 50% of your money immediately (either through online transfer or bringing your bonds to a teller), have an implicit US government guarantee for 50% of your money and low risk for the rest, and get inflation protection for 75% of your money.",
"title": ""
},
{
"docid": "5baab23655fcb5e43bd9fbdbbb8e2704",
"text": "So an investor would get their principal back in interest payments after 13.5 years if things remained stable, not accounting for discounting future cash flows/any return for the risk they are taking. The long maturity helps insurance companies and pensions properly match the duration of their liabilities. Still doesn't seem like a good bet, but it makes sense that it happened.",
"title": ""
},
{
"docid": "1856f12fa004f6ee1b1d9889a4827b0d",
"text": "Bonds by themselves aren't recession proof. No investment is, and when a major crash (c.f. 2008) occurs, all investments will be to some extent at risk. However, bonds add a level of diversification to your investment portfolio that can make it much more stable even during downturns. Bonds do not move identically to the stock market, and so many times investing in bonds will be more profitable when the stock market is slumping. Investing some of your investment funds in bonds is safer, because that diversification allows you to have some earnings from that portion of your investment when the market is going down. It also allows you to do something called rebalancing. This is when you have target allocation proportions for your portfolio; say 60% stock 40% bond. Then, periodically look at your actual portfolio proportions. Say the market is way up - then your actual proportions might be 70% stock 30% bond. You sell 10 percentage points of stocks, and buy 10 percentage points of bonds. This over time will be a successful strategy, because it tends to buy low and sell high. In addition to the value of diversification, some bonds will tend to be more stable (but earn less), in particular blue chip corporate bonds and government bonds from stable countries. If you're willing to only earn a few percent annually on a portion of your portfolio, that part will likely not fall much during downturns - and in fact may grow as money flees to safer investments - which in turn is good for you. If you're particularly worried about your portfolio's value in the short term, such as if you're looking at retiring soon, a decent proportion should be in this kind of safer bond to ensure it doesn't lose too much value. But of course this will slow your earnings, so if you're still far from retirement, you're better off leaving things in growth stocks and accepting the risk; odds are no matter who's in charge, there will be another crash or two of some size before you retire if you're in your 30s now. But when it's not crashing, the market earns you a pretty good return, and so it's worth the risk.",
"title": ""
},
{
"docid": "14cee9078b37b49a75d3694d935e28bd",
"text": "And this is bad why? What is the total funding? What is the total return? Do you have the necessary facts to evaluate this? Basing opinions on partial evidence makes poor public policy. Most municipal bonds might actually work out for the better good of communities. Certainly the total amount of bonds listed as going bad in this story is a tiny, tiny fraction of total bonds.",
"title": ""
},
{
"docid": "ce7aaa5ab63eb5f36f70ce6968d53cd8",
"text": "It wouldn't surprise me to see a country's return to show Inflation + 2-4%, on average. The members of this board are from all over the world, but those in a low inflation country, as the US,Canada, and Australia are right now, would be used to a long term return of 8-10%, with sub 2% inflation. In your case, the 20% return is looking backwards, hindsight, and not a guarantee. Your country's 10 year bonds are just under 10%. The difference between the 10% gov bond and the 20% market return reflects the difference between a 'guaranteed' return vs a risky one. Stocks and homes have different return profiles over the decades. A home tends to cost what some hour's pay per month can afford to finance. (To explain - In the US, the median home cost will center around what the median earner can finance with about a week's pay per month. This is my own observation, and it tends to be correct in the long term. When median homes are too high or low compared to this, they must tend back toward equilibrium.) Your home will grow in value according to my thesis, but an investment home has both value that can rise or fall, as well as the monthly rent. This provides total return as a stock had growth and dividends. Regardless of country, I can't predict the future, only point out a potential flaw in your plan.",
"title": ""
},
{
"docid": "bbe5397d9417e54c85543cd31c858101",
"text": "If your money market funds are short-term savings or an emergency fund, you might consider moving them into an online saving account. You can get interest rates close to 1% (often above 1% in higher-rate climates) and your savings are completely safe and easily accessible. Online banks also frequently offer perks such as direct deposit, linking with your checking account, and discounts on other services you might need occasionally (i.e. money orders or certified checks). If your money market funds are the lowest-risk part of your diversified long-term portfolio, you should consider how low-risk it needs to be. Money market accounts are now typically FDIC insured (they didn't used to be), but you can get the same security at a higher interest rate with laddered CD's or U.S. savings bonds (if your horizon is compatible). If you want liquidity, or greater return than a CD will give you, then a bond fund or ETF may be the right choice, and it will tend to move counter to your stock investments, balancing your portfolio. It's true that interest rates will likely rise in the future, which will tend to decrease the value of bond investments. If you buy and hold a single U.S. savings bond, its interest payments and final payoff are set at purchase, so you won't actually lose money, but you might make less than you would if you invested in a higher-rate climate. Another way to deal with this, if you want to add a bond fund to your long-term investment portfolio, is to invest your money slowly over time (dollar-cost averaging) so that you don't pay a high price for a large number of shares that immediately drop in value.",
"title": ""
},
{
"docid": "0882286a3e1d74b65a3bac64fc370be1",
"text": "I think you should consult a professional with experience in 83(b) election and dealing with the problems associated with that. The cost of the mistake can be huge, and you better make sure everything is done properly. For starters, I would look at the copy of the letter you sent to verify that you didn't write the year wrong. I know you checked it twice, but check again. Tax advisers can call a dedicated IRS help line for practitioners where someone may be able to provide more information (with your power of attorney on file), and they can also request the copy of the original letter you've sent to verify it is correct. In any case, you must attach the copy of the letter you sent to your 2014 tax return (as this is a requirement for the election to be valid).",
"title": ""
}
] |
fiqa
|
917a0f61a60bf3fe5598dfbe6f4017d9
|
If Bernie Madoff had invested in Berkshire Hathaway, would the ponzi actually have succeeded?
|
[
{
"docid": "2c33a6811b667dc4c41322a763088ef4",
"text": "I could be wrong, but I doubt that Bernie started out with any intention of defrauding anyone, really. I suspect it began the first time he hit a quarter when his returns were lower than everyone else's, or at least not as high as he'd promised his investors they'd be, so he fudged the numbers and lied to get past the moment, thinking he'd just make up for it the next quarter. Only that never happened, and so the lie carried forward and maybe grew as things didn't improve as he expected. It only turned into a ponzi because he wasn't as successful at investing as he was telling his investors he was, and telling the truth would have meant the probability that he would have lost most of his clients as they went elsewhere. Bernie couldn't admit the truth, so he had to keep up the fiction by actually paying out returns that didn't exist, which required constantly finding new money to cover what he was paying out. The source of that money turned out to be new investors who were lured in by people already investing with Bernie who told them how great he was as a financial wizard, and they had the checks to prove it. I think this got so far out of hand, and it gradually dragged more and more people in because such things turn into black holes, swallowing up everything that gets close. Had the 2008 financial crisis not hit then Bernie might still be at it. The rapid downturns in the markets hit many of Bernie's investors with margin calls in other investments they held, so they requested redemptions from him to cover their calls, expecting that all of the money he'd convinced to leave with him really existed. When he realized he couldn't meet the flood of redemptions, that was when he 'fessed up and the bubble burst. Could he have succeeded by simple investing in Berkshire? Probably. But then how many people say that in hindsight about them or Amazon or Google, or any number of other stocks that turned out similarly? (grin) Taking people's money and parking it all in one stock doesn't make you a genius, and that's how Bernie wanted to be viewed. To accomplish that, he needed to find the opportunities nobody else saw and be the one to get there first. Unfortunately his personal crystal ball was wrong, and rather than taking his lumps by admitting it to his investors, his pride and ego led him down a path of deception that I'm sure he had every intention of making right if he could. The problem was, that moment never came. Keep in mind one thing: The $64 billion figure everyone cites isn't money that really existed in the first place. That number is what Bernie claimed his fund was worth, and it is not the amount he actually defrauded people out of. His actual cash intake was probably somewhere in the $20 billion range over that time. Everything else beyond that was nothing more than the fictionalized returns he was claiming to get for his clients. It's what they thought they had in the bank with him, rather than what was really there.",
"title": ""
}
] |
[
{
"docid": "479f302f9d64a635ca797a765b096a3f",
"text": "\"This is the best tl;dr I could make, [original](http://www.aei.org/publication/warren-buffett-wins-1m-bet-made-a-decade-ago-that-the-sp-500-stock-index-would-outperform-hedge-funds/) reduced by 91%. (I'm a bot) ***** > MP: Specifically, Buffett offered to bet that over a ten-year period from January 1, 2008 to December 31, 2017, the S&P 500 index would outperform a portfolio of funds of hedge funds when performance is measured on a basis net of fee. > A fund that tracks the S&P 500 fund might have an expense ratio of as little as 0.02%. MP: The chart above shows the annual returns on the S&P 500 index and the average annual returns on a comprehensive index of thousands of hedge funds maintained by Barclay over the period of Buffett&#039;s bet: From 2008 through August of this year. > Funds of hedge funds accentuate this cost problem because their fees are superimposed on the large fees charged by the hedge funds in which the funds of funds are invested. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/71a3oo/warren_buffett_wins_1m_bet_made_a_decade_ago_that/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~213478 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **fund**^#1 **hedge**^#2 **index**^#3 **bet**^#4 **fee**^#5\"",
"title": ""
},
{
"docid": "ef54cb4cda9757217fc318facc2d9efc",
"text": "w/o the winklevoss twins, Zuckerberg wouldn't be a billionaire. Not that he wouldn't be successful, or he owes them anything, but w/o their idea of a social network, he very likely would have done something different. Worked hard, but it may or may not have worked. He is both skilled, hard working, and lucky.",
"title": ""
},
{
"docid": "6fd6675d0fd15b473b5fa605b9159383",
"text": "Yes, yes - that's my point. The common investors never did invest (or even get to invest) so they didn't lose money as the article claims. It's the idiot institutional funds that got screwed. Common investors - most of them - knew FB was overvalued.",
"title": ""
},
{
"docid": "c1a15f4cc83d6ef798643f388369ea12",
"text": "Romney isn't really a capitalist in the sense that he didn't place his own capital at risk. Bain Capital was founded by a guy named Bain who launched it with $30 million of his own moolah. Romney was recruited to run the operation but did not kick in anything. That's not capitalism; that's called being born lucky.",
"title": ""
},
{
"docid": "4a6bfcf503aa247982a0f722fe5f2c7e",
"text": "To understand his comments about bear-market performance it's important to take them in context. (My research method was Crtl+F: bear; read around the highlights. This is not a complete survey of 60+ years of letters.) In his earlier letters, statements about bull market performance are always made in reference to Buffet's belief that many of BH's current holdings are in undervalued securities. Ex: To the extent possible, therefore, I am attempting to create my own work-outs by acquiring large positions in several undervalued securities. Such a policy should lead to the fulfillment of my earlier forecast – an above average performance in a bear market. It is on this basis that I hope to be judged (p 6; emphasis mine). Similar statements are made throughout the earlier letters, along with this interesting note: In a year when the general market had a substantial advance I would be well satisfied to match the advance of the Averages (p 6). So to your question of why BH fund performance is likely to be better in a bear market than in a bull market, I believe the implicit assertion is that undervalued securities are more resilient in a bear market (presumably because they don't have as far to fall, and are also less likely to be subject to a bubble). Buffet is also explicitly asserting that when facing a choice to either (a) position BH to weather a possible downturn or (b) position BH to enjoy a bullish stock that is outpacing the market, he would choose the former over the later. As to your assertion that he always says this, I can find no reference to bear market's in the letters past 1960.",
"title": ""
},
{
"docid": "48c01e8025f37a2255ffd3c048d8b06a",
"text": "Perhaps something else comes with the bond so it is a convertible security. Buffett's Negative-Interest Issues Sell Well from 2002 would be an example from more than a decade ago: Warren E. Buffett's new negative-interest bonds sold rapidly yesterday, even after the size of the offering was increased to $400 million from $250 million, with a possible offering of another $100 million to cover overallotments. The new Berkshire Hathaway securities, which were underwritten by Goldman, Sachs at the suggestion of Mr. Buffett, Berkshire's chairman and chief executive, pay 3 percent annual interest. But they are coupled with five-year warrants to buy Berkshire stock at $89,585, a 15 percent premium to Berkshire's stock price Tuesday of $77,900. To maintain the warrant, an investor is required to pay 3.75 percent each year. That provides a net negative rate of 0.75 percent.",
"title": ""
},
{
"docid": "025adc914ef3b24720ad4fd4af995e8d",
"text": "\"I did once read a book titled \"\"How I made a million dollars on the stock market\"\". It sounded realistic enough to be a true story. The author made it clear on the first page that (a) this was due to some exceptional circumstances, (b) that he would never again be able to pull off something like this, and (c) you would never be able to pull of something like this, except with extreme luck. (The situation was small company A with a majority shareholder, other small company B tries to gain control by buying all the shares, the majority shareholder of A trying to prevent this by buying as many shares as possible, share price shooting up ridiculously, \"\"smart\"\" traders selling uncovered shorts to benefit when the price inevitably drops, the book author buying $5,000 worth of shares because they were going up, and then one enormous short squeeze catching out the traders. And he claimed having sold his shares for over a million - before the price dropped back to normal). Clearly not a matter of \"\"playing your cards right\"\", but of having an enormous amount of luck.\"",
"title": ""
},
{
"docid": "71865ab9675a4e9f94db73782e2c72df",
"text": "Are you looking for this Warren Buffets Stock Portfolio? Or Berkshire Hathaway Portfolio WFC is near the bottom of the BH portfolio but it seems to be a rather large investment for both.",
"title": ""
},
{
"docid": "6159e8995416be803556149ac7908224",
"text": "JPM is probably the hugest too big to fail alongside being one of the most highly leveraged. Did you see Jamie Dimon testifying before our great politicians earlier this year? I mean if the Federal Government is kissing his ass, what will the State of New York really accomplish? The Bear Stearns collapse was avoided by JPM jumping in and saving the pride of Wall Street. Do you see Barclay's getting sued for things Lehman Brothers did? Barclay's is living the good life in London rigging LIBOR, while JPM, an American institution is being re-regulated. Should the government sue every company that goes out of business for defrauding customers, employees, and all stakeholders? SMH",
"title": ""
},
{
"docid": "b282659fa53b115ffc7586011c0f390f",
"text": "Over a period of time greater than 10 years (keep in mind, 2000-2009 ten year period fails, so I am talking longer) the market, as measured by the S&P 500, was positive. Long term, averaging more than 10%/yr. At a 1 year horizon, the success is 67 or so percent. It's mostly for this reason that those asking about investing are told that if they need money in a year or two, to buy a house for instance, they are told to stay out of the market. As the time approaches one day or less, the success rate drops to 50/50. The next trade being higher or lower is a random event. Say you have a $5 commission. A $10,000 trade buy/sell is $10 for the day. 250 trading days costs you $2500 if you get in and out once per day. You need to be ahead 25% for the year to break even. You can spin the numbers any way you wish, but in the end, time (long time spans) is on your side.",
"title": ""
},
{
"docid": "f21ba73ac5b89b5f8813e7c56ee8f95c",
"text": "No the government got screwed. They only made a profit if you squint very hard and ignore lots of things. They should have done what Buffett did, or more, offering to buy as many share as needed at 1c a share. No-one need to bust but stupid greedy people needed to learn a lesson. Of course they did learn a lesson: America is the home of socialized losses and privatized profits.",
"title": ""
},
{
"docid": "40e6638b269729348c0961549dc69b5a",
"text": "\"The best answer here is \"\"maybe, but probably not\"\". A few quick reasons: Its not a bad idea to watch other investors especially those who can move markets but do your own research on an investment first. Your sole reason for investing should not be \"\"Warren did it\"\".\"",
"title": ""
},
{
"docid": "9bb96c7121359b5601a9c3b70342af0f",
"text": "\"This is the best tl;dr I could make, [original](https://www.bloomberg.com/amp/view/articles/2017-09-21/bet-with-buffett-not-against-him) reduced by 90%. (I'm a bot) ***** > The first is a New York Post article with the headline, &quot;Warren Buffett wins $1M bet made with hedgie a decade ago&quot;. > Although Seides has admitted defeat, he said he thinks that &quot;Doubling down on a bet with Warren Buffett for the next 10 years would hold greater-than-even odds of victory.&quot; Thus, despite spending $1 million in tuition at the University of Buffett, he failed to learn the expensive lesson that Buffett has offered up to all of us. > Which leads us to Buffett&#039;s motivation in making the bet. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/725pxt/bet_with_buffett_not_against_him/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~215707 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **Buffett**^#1 **bet**^#2 **money**^#3 **year**^#4 **Index**^#5\"",
"title": ""
},
{
"docid": "7bdff9ed0ed8e5a4578c05b5668c99b8",
"text": "\"Even though this is really a psychology question, I'll try to give you an answer. You do nothing but stay away. What's going on is too small to matter. Bernie Madoff took investor's money and scammed them for $15B. That's B, billion, 9 zeros (Yes, I realize the UK Billion has 12, these are US Billion). Harry Markopolos was on to him, and presented his evidence to the government, but \"\"No one would listen.\"\" In quotes because that's the title of the book he published on his experience. Even Barron's had an article suggesting that Madoff's returns were impossible. Eventually, it came to light. In my own experience, there was a mortgage acceleration product called \"\"Money Merge Account.\"\" It claimed to help you pay off your mortgage in a fraction of the time \"\"with no change to your budget.\"\" For two years or so, I was obsessed with exposing this scam, and wrote articles, nearly every week discussing every aspect of this product. Funny how even though mortgages are math that's pretty easy to explain, few sellers wanted to talk about the math. Using the same logic that you don't need to understand how a car works as long as you know how to drive. There were some people that would write to tell me I saved them the $3500 cost of that product, but mostly I argued with sellers who dismissed every word I wrote as if the math were incomprehensible to anyone but the software guys who wrote it. In the end, I had compiled a PDF with over 60 pages of my writing on the topic, and decided to call it quits. The product was recycled and now is sold as \"\"Worth Unlimited,\"\" but the software is the same. This is all a tangent to your problem. It simply offers the fact that the big scam, Bernie, continued for a long time, and people who were otherwise intelligent, fell for his promises, and didn't want to believe otherwise. The mortgage software had many bloggers writing. Searching on the web found a lot of discussion, very easy to find. People will believe what they wish. Tell an Atheist that God exists, or a believer that He doesn't, and your words will fall on deaf ears. Unfortunately, this is no different.\"",
"title": ""
},
{
"docid": "b5ac2c4ff3c5d1c545838bec51ac3bb8",
"text": "\"Other responses have focused on getting you software to use, but I'd like to attempt your literal question: how are such transactions managed in systems that handle them? I will answer for \"\"double entry\"\" bookkeeping software such as Quicken or GnuCash (my choice). (Disclaimer: I Am Not An Accountant and accountants will probably find error in my terminology.) Your credit card is a liability to you, and is tracked using a liability account (as opposed to an asset account, such as your bank accounts or cash in your pocket). A liability account is just like an asset except that it is subtracted from rather than added to your total assets (or, from another perspective, its balance is normally negative; the mathematics works out identically). When you make a purchase using your credit card, the transaction you record transfers money from the liability account (increasing the liability) to the expense account for your classification of the expense. When you make a payment on your credit card, the transaction you record transfers money from your checking account (for example) to the credit card account, reducing the liability. Whatever software you choose for tracking your money, I strongly recommend choosing something that is sufficiently powerful to handle representing this as I have described (transfers between accounts as the normal mode of operation, not simply lone increases/decreases of asset accounts).\"",
"title": ""
}
] |
fiqa
|
90cbd6ffce242f6178bc3fbd969ddc45
|
Forex vs day trading for beginner investor
|
[
{
"docid": "276f5383165d301a1348512cce64e67a",
"text": "Forex vs Day Trading: These can be one and the same, as most people who trade forex do it as day trading. Forex is the instrument you are trading and day trading is the time frame you are doing it in. If your meaning from your question was comparing trading forex vs stocks, then it depends on a number of things. Forex is more liquid so most professional traders prefer it as it can be easier to get in and out without being gapped. However, if you are not trading large amounts of money and you stay away from more volatile stocks, this should not matter too much. It may also depend on what you understand more and prefer to trade. You need to be comfortable with what you are trading. If on the other hand you are referring to day trading vs longer term trading and/or investing, then this can depend largely on the instrument you are trading and the time frame you are more comfortable with. Forex is used more for shorter term trading, from day trading to having a position open for a couple of days. Stocks on the other hand can be day traded to traded over days, weeks, months or years. It is much more common to have positions open for longer periods with stocks. Other instruments like commodities, can also be traded over different time frames. The shorter the time frame you trade the higher risk involved as you have to make quick decisions and be happy with making a lot of smaller gains with the potential to make a large loss if things go wrong. It is best once again to chose a time frame you are comfortable with. I tend to trade Australian stocks as I know them well and am comfortable with them. I usually trade in the medium to long term, however I let the market decide how long I am in a position and when I get out of it. I try to follow the trend and stay in a position as long as the trend continues. I put automatic stop losses on all my positions, so if the market turns against me I am automatically taken out. I can be in a position for as little as a day (can happen if I buy one day and the next day the stock falls by 15% or more) to over a year (as long as the trend continues). By doing this I avoid the daily market noise and let my profits run and keep my losses small. No matter what instrument you end up trading and the time frame you choose to trade in, you should always have a tested trading plan and a risk management strategy in place. These are the areas you should first gain knowledge in to further your pursuits in trading.",
"title": ""
},
{
"docid": "19535b97b2d6d6418ef13f8062bb06b8",
"text": "This image is an advertisement from this week's Barron's. The broker would want to put himself in the best light, correct? This shows you that of their current accounts, 53.5% are not profitable. And these guys have the best track record of the list. Also keep in mind that their client base isn't random. The winners tend to stay, so even if it were 50/50, the 50% of losers might represent many times that number of people who came to the table, lost their money and left.",
"title": ""
},
{
"docid": "6366784d65d55eb958b52d9781872f42",
"text": "Are you in the US? Because if so, there are tax discrepancies. Gains from sale of stocks held for less than one year are subject to ordinary income tax, so probably around 30%. If you hold those stocks for a year or more, gains will be taxed as capital gains tax, 15%. For Forex, taxes on your earnings will be split 60/40. 60% will be traded at the lower 15% rate, while the remaining 40& will be taxed at a higher rate, approximately 30%. So purely short-term, there is a tax advantage to dabbling in Forex. HOWEVER - these are both incredibly risky things to do with your money! I never would recommend anyone invest short-term looking to make quick cash! In fact, the tax code DISCOURAGES people from short-term investments.",
"title": ""
}
] |
[
{
"docid": "b047dc87c3ad4c48201382f49eba180a",
"text": "Oanda.com is a very respectable broker. They don't offer ridiculous leverage options of 200 to 1 that prove the downfall of people starting out in Forex. When I used them a few years back, they had good customer service and some nice charting tools.",
"title": ""
},
{
"docid": "96eaaf4d4da27faaa9cee053a3e9931b",
"text": "\"If you're going to be a day trader, you really need to know your stuff. It's risky, to say the least. One of the most important elements to being successful is having access to very fast data streams so that you can make moves quickly as trends stat to develop in the markets. If you're planning on doing this using consumer-grade sites like eTrade, that's not a good idea. The web systems of many of the retail brokerage firms are not good enough to give you data fast enough for you to make good, timely decisions or to be able to execute trades way that day traders do in order to make their money. Many of those guys are living on very thin margins, sometimes just a few cents of movement one way or the other, so they make up for it with a large volume of trades. One of the reasons you were told you need a big chunk of money to day trade is that some firms will rent you out a \"\"desk\"\" and computer access to day trade through their systems if you're really serious about it. They will require you to put up at least a minimum amount of money for this privilege, and $25k may not be too far out of the ballpark. If you've never done day trading before, be careful. It doesn't take much to get caught looking the wrong way on a trade that you can't get out of without losing your shirt unless you're willing to hold on to the stock, which could be longer than a day. Day trading sounds very simple and easy, but it isn't. You need to learn about how it works (a good book to read to understand this market is \"\"Flash Boys\"\" by Michael Lewis, besides being very entertaining), because it is a space filled with very sophisticated, well-funded firms and individuals who spend huge sums of money to gain miniscule advantages in the markets. Be careful, whatever you do. And don't play in day trading with your retirement money or any other money you can't afford to walk away from. I hope this helps. Good luck!\"",
"title": ""
},
{
"docid": "a7e82acf77e5091b7bcac9655fad7156",
"text": "Often times the commission fees add up a lot. Many times the mundane fluctuations in the stock market on a day to day basis are just white noise, whereas long term investing generally lets you appreciate value based on the market reactions to actual earnings of the company or basket of companies. Day trading often involves leverage as well.",
"title": ""
},
{
"docid": "b8c49721932a07c3e6171d8d04edfaf2",
"text": "trader. It's easy to learn how to develop, you can teach yourself how to develop, but gaining knowledge on how a traders day-to-day world is like is not as easy to come by. If you go dev first, it may be harder to get that business knowledge further down the track",
"title": ""
},
{
"docid": "3610bca0f2f0662da44ba3a89619cd30",
"text": "\"But I don't see how it's any different than buying a stock at a low price and holding on to it for some months. Based on your question, I would say the difference is time. Day trading by its nature is a 6-hour endeavor. If you buy low and are planning to sell high, then you only have a few hours to make this happen. As a previous poster mentioned, there is a lot of \"\"white noise\"\" that occurs on a weekly/daily/hourly/min basis. Long-term investors have the time to wait it out. Although, as a side note, if you were a buy-and-hold investor from the 1960s-early 1980s, then buy and hold was not very good. Is it just the psychological/addictive aspect of it? This is the biggest reason. Day trading is stressful and stress can cause financially destructive decisions such as over-leveraging, over-trading, etc. Why is day trading stressful? Because you are managing hundreds to thousands of trades a year. When combined with the lack of time in a day to make moves, it becomes stressful. Also, many day traders do it full time. Which adds to the pressure to be correct and to be incredible at money managment. A lot of buy-and-hold investors have full time jobs and may only check their positions every month or so.\"",
"title": ""
},
{
"docid": "a27a2131386bb326d295d3241415a143",
"text": "If I knew a surefire way to make money in FOREX (or any market for that matter) I would not be sharing it with you. If you find an indicator that makes sense to you and you think you can make money, use it. For what it's worth, I think technical analysis is nonsense. If you're just now wading in to the FOREX markets because of the Brexit vote I suggest you set up a play-money account first. The contracts and trades can be complicated, losses can be very large and you can lose big -- quickly. I suspect FOREX brokers have been laughing to the bank the last couple weeks with all the guppies jumping in to play with the sharks.",
"title": ""
},
{
"docid": "fd9a98455fed7756d4b3f2fb56ea0aca",
"text": "How long is a piece of string? This will depend on many variables. How many trades will you make in a day? What income would you be expecting to make? What expectancy do you need to achieve? Which markets you will choose to trade? Your first step should be to develop a Trading Plan, then develop your trading rules and your risk management. Then you should back test your strategy and then use a virtual account to practice losing on. Because one thing you will get is many losses. You have to learn to take a loss when the market moves against you. And you need to let your profits run and keep your losses small. A good book to start with is Trade Your Way to Financial Freedom by Van Tharp. It will teach you about Expectancy, Money Management, Risk Management and the Phycology of Trading. Two thing I can recommend are: 1) to look into position and trend trading and other types of short term trading instead of day trading. You would usually place your trades after market close together with your stops and avoid being in front of the screen all day trying to chase the market. You need to take your emotion out of your trading if you want to succeed; 2) don't trade penny stocks, trade commodities, FX or standard stocks, but keep away from penny stocks. Just because you can buy them for a penny does not mean they are cheap.",
"title": ""
},
{
"docid": "5890c2dabd79f0db88074a24b8be24e4",
"text": "There is no difference between more shares of a relatively cheaper stock and less shares of a relatively more expensive stock. When you invest in a stock, the percentage increase (or decrease) in the share price results in gains (or losses). This is a fundamental concept of investing. Your question suggests that you would benefit from further research before investing your money. Trading real dollars can be difficult without a strong understanding of the principles involved. Investing your money without a good knowledge base will likely be stressful and could have a discouraging effect if it doesn't go well. Before you open an investment account, read up on investing fundamentals, particularly mutual funds as those can be a great place to start as a new investor. There are many sources of information including books, websites such as http://investor.gov/investing-basics and this website. Don't skip the sections on taxes, as those matter just as much and sometimes more than the simple buying and selling. You might look at tax advantaged accounts, such as 401k's, IRA's, etc. It shouldn't take long but it will be one of the most important things you do as a beginning investor. Everyone has to start here. Understanding the vocabulary and concepts will likely save you time and money throughout your investing life.",
"title": ""
},
{
"docid": "d870d7a9719e33d21aa2f445333a56df",
"text": "\"Sorry but you already provided the answer to your own question. The simple answer is to 'not day trade' but hold things for a longer period and don't trade a large number of different stocks every week. Seriously, have a look at the rules and see what it implies.. an average of 20 buys and sells of longer term positions PER DAY is a pretty fair bit of trading, that's really churning through the positions compared to someone who might establish positions with say 25 well picked stocks and might change even 5 of those a week to a different stock. Or even a larger number of stocks but seeking to hold them for over a year so you get taxed at the long term cap gains rate. If you want to day trade, be prepared to be labeled as such and deal with your broker on that basis. Not like they will hate you given all the fees you are likely to rack up. And the government will love you also, since you'll be paying short term gains taxes. (and trust me, us bogelheads appreciate the liquidity the speculative and short term folks bring to the market.) In terms of how it would impact you, Expect to be required to have a fairly substantial balance ($25K) if you are maintaining a margin account. I'd suggest reading this thread My account's been labeled as \"\"day trader\"\" and I got a big margin call. What should I do? What trades can I place in the blocked period?\"",
"title": ""
},
{
"docid": "2ea51041cbb14ef2276388529ab024ee",
"text": "Simply because forex brokers earn money from the spread that they offer you. Spread is the difference between buyers and sellers. If the buy price is at 1.1000 and the sell price is at 1.1002 then the spread is 2 pips. Now think that this broker is getting spread from its liquidity cheaper (for example 1 pip spread). As you can understand this broker makes a profit of 1 pip for each trade you place... Now multiply 1 pip X huge volume, and then you will understand why most forex brokers don't charge commissions.",
"title": ""
},
{
"docid": "17edca9b7ce5c1b6974f3149f10e70ad",
"text": "It was a forex account (foreign exchange trading). At that time forex brokers were not regulated or required to be regulated so it was like the wild west. It was indeed a learning experience and thankfully I was diversified so the hit hurt but did not ruin me.",
"title": ""
},
{
"docid": "dc13b77121e726d4bd44e842f8bf0db8",
"text": "ChrisW's comment may appear flippant, but it illustrates (albeit too briefly) an important fact - there are aspects of investing that begin to look exactly like gambling. In fact, there are expressions which overlap - Game Theory, often used to describe investing behavior, Monte Carlo Simulation, a way of convincing ourselves we can produce a set of possible outcomes for future returns, etc. You should first invest time. 100 hours reading is a good start. 1000 pounds, Euros, or dollars is a small sum to invest in individual stocks. A round lot is considered 100 shares, so you'd either need to find a stock trading less than 10 pounds, or buy fewer shares. There are a number of reasons a new investor should be steered toward index funds, in the States, ETFs (exchange traded funds) reflect the value of an entire index of stocks. If you feel compelled to get into the market this is the way to go, whether a market near you of a foreign fund, US, or other.",
"title": ""
},
{
"docid": "7ddfae851426da2f8a259924a8dc6188",
"text": "FX is often purchased with leverage by both retail and wholesale speculators on the assumption daily movements are typically more restrained than a number of other asset classes. When volatility picks up unexpectedly these leveraged accounts can absolutely be wiped out. While these events are relatively rare, one happened as recently as 2016 when the Swiss National Bank unleashed the Swiss Franc from its Euro mooring. You can read about it here: http://www.reuters.com/article/us-swiss-snb-brokers-idUSKBN0KP1EH20150116",
"title": ""
},
{
"docid": "5c68b5223a359c9908d4d7c0eefb1553",
"text": "\"It's almost like why don't you wake up in the morning feeling exactly like you slept the earlier night? yeah, once in a while that'll happen, but it's not designed to be that way. Stuff happens. The close of the stock is what happened at 4 PM (for US stocks). The \"\"open\"\" is simply the first price ever, or an open price auction like NimChimpsky said. Most things that trade have an open/close cycle, even what seemingly trades all the time (some markets trade 23 hours). Forex trades in different exchanges which have overlapping timing but each market will have an open, high, low and close for each day - for what is the same underlying currency. Also, it's not exactly true that close<>open. Take the GS chart, Oct 1 2010 and Oct 4 2010 (there was a weekend in between). The Oct 1 close was the same as the Oct 4 open. Note that Oct 4 was a down day so it's in red - the open is the upper end of the body (not including the wick), and Oct 1 was an up day so its close was the upper end too. (Candles are drawn so that the open ends of the wicks are the High and Low of the period respectively, and the lower end of the body is the open if it was an up-day, meaning the stock closed higher than it opened, and the body in coloured green below. If the stock went down that day from the open, the body's in red and the lower end is the close. Vice-versa for the other end) The way to get to this: Go to yahoo finance, choose a stock, go to historical prices, click download data (you should have about 10 years of data), paste into excel, insert a formula to check if prev day's close = current day's open, and I'm sure you'll see at least one instance per stock.\"",
"title": ""
},
{
"docid": "84b5b8c8ef42cad5494a1aef39fc1fab",
"text": "\"how can I get started knowing that my strategy opportunities are limited and that my capital is low, but the success rate is relatively high? A margin account can help you \"\"leverage\"\" a small amount of capital to make decent profits. Beware, it can also wipe out your capital very quickly. Forex trading is already high-risk. Leveraged Forex trading can be downright speculative. I'm curious how you arrived at the 96% success ratio. As Jason R has pointed out, 1-2 trades a year for 7 years would only give you 7-14 trades. In order to get a success rate of 96% you would have had to successful exploit this \"\"irregularity\"\" at 24 out of 25 times. I recommend you proceed cautiously. Make the transition from a paper trader to a profit-seeking trader slowly. Use a low leverage ratio until you can make several more successful trades and then slowly increase your leverage as you gain confidence. Again, be very careful with leverage: it can either greatly increase or decrease the relatively small amount of capital you have.\"",
"title": ""
}
] |
fiqa
|
deb8c82713feee701ef0f672f95b4183
|
What is the process through which a cash stock transaction clears?
|
[
{
"docid": "6bf38299a224a2ca9d6a6c7ecb4498dd",
"text": "\"This is the sad state of US stock markets and Regulation T. Yes, while options have cleared & settled for t+1 (trade +1 day) for years and now actually clear \"\"instantly\"\" on some exchanges, stocks still clear & settle in t+3. There really is no excuse for it. If you are in a margin account, regulations permit the trading of unsettled funds without affecting margin requirements, so your funds in effect are available immediately after trading but aren't considered margin loans. Some strict brokers will even restrict the amount of uncleared margin funds you can trade with (Scottrade used to be hyper safe and was the only online discount broker that did this years ago); others will allow you to withdraw a large percentage of your funds immediately (I think E*Trade lets you withdraw up to 90% of unsettled funds immediately). If you are in a cash account, you are authorized to buy with unsettled funds, but you can't sell purchases made on unsettled funds until such funds clear, or you'll be barred for 90 days from trading as your letter threatened; besides, most brokers don't allow this. You certainly aren't allowed to withdraw unsettled funds (by your broker) in such an account as it would technically constitute a loan for which you aren't even liable since you've agreed to no loan contract, a margin agreement. I can't be sure if that actually violates Reg T, but when I am, I'll edit. While it is true that all marketable options are cleared through one central entity, the Options Clearing Corporation, with stocks, clearing & settling still occurs between brokers, netting their transactions between each other electronically. All financial products could clear & settle immediately imo, and I'd rather not start a firestorm by giving my opinion why not. Don't even get me started on the bond market... As to the actual process, it's called \"\"clearing & settling\"\". The general process (which can generally be applied to all financial instruments from cash deposits to derivatives trading) is: The reason why all of the old financial companies were grouped on Wall St. is because they'd have runners physically carting all of the certificates from building to building. Then, they discovered netting so slowed down the process to balance the accounts and only cart the net amounts of certificates they owed each other. This is how we get the term \"\"bankers hours\"\" where financial firms would close to the public early to account for the days trading. While this is all really done instantly behind your back at your broker, they've conveniently kept the short hours.\"",
"title": ""
}
] |
[
{
"docid": "95c2adec4356b3c197307f57a31ce4a5",
"text": "Brokerage firms must settle funds promptly, but there's no explicit definition for this in U.S. federal law. See for example, this article on settling trades in three days. Wikipedia also has a good write-up on T+3. It is common practice, however. It takes approximately three days for the funds to be available to me, in my Canadian brokerage account. That said, the software itself prevents me from using funds which are not available, and I'm rather surprised yours does not. You want to be careful not to be labelled a pattern day trader, if that is not your intention. Others can better fill you in on the consequences of this. I believe it will not apply to you unless you are using a margin account. All but certainly, the terms of service that you agreed to with this brokerage will specify the conditions under which they can lock you out of your account, and when they can charge interest. If they are selling your stock at times you have not authorised (via explicit instruction or via a stop-loss order), you should file a complaint with the S.E.C. and with sufficient documentation. You will need to ensure your cancel-stop-loss order actually went through, though, and the stock was sold anyway. It could simply be that it takes a full business day to cancel such an order.",
"title": ""
},
{
"docid": "918130a1c8eeb5200beae8679af18034",
"text": "Reading the plan documentation, yes, that is what it means. Each purchase by bank debit, whether one-time or automatic, costs $2 plus $0.06 per share; so if you invested $50, you would get slightly less than $48 in stock as a result (depending on the per-share price). Schedule of Fees Purchases – A one-time $15.00 enrollment fee to establish a new account for a non-shareholder will be deducted from the purchase amount. – Dividend reinvestment: The Hershey Company pays the transaction fee and per share* fee on your behalf. – Each optional cash purchase by one-time online bank debit will entail a transaction fee of $2.00 plus $0.06 per share* purchased. – Each optional cash purchase by check will entail a transaction fee of $5.00 plus $0.06 per share* purchased. – If funds are automatically deducted from your checking or savings account, the transaction fee is $2.00 plus $0.06 per share* purchased. Funds will be withdrawn on the 10th of each month, or the preceding business day if the 10th is not a business day. – Fees will be deducted from the purchase amount. – Returned check and rejected ACH debit fee is $35.00.",
"title": ""
},
{
"docid": "4564883eefc225e8c2d7e3d01ae46a2f",
"text": "It's a covered call. When I want to create a covered call position, I don't need to wait before the stock transaction settles. I enter it as one trade, and they settle at different times.",
"title": ""
},
{
"docid": "fd25863c896820977eca451e4ac7e6ae",
"text": "It's done by Opening Auction (http://www.advfn.com/Help/the-opening-auction-68.html): The Opening Auction Between 07.50 and a random time between 08.00 and 08.00.30, there will be called an auction period during which time, limit and market orders are entered and deleted on the order book. No order execution takes place during this period so it is possible that the order book will become crossed. This means that some buy and sell orders may be at the same price and some buy orders may be at higher prices than some sell orders. At the end of the random start period, the order book is frozen temporarily and an order matching algorithm is run. This calculates the price at which the maximum volume of shares in each security can be traded. All orders that can be executed at this price will be filled automatically, subject to price and priorities. No additional orders can be added or deleted until the auction matching process has been completed. The opening price for each stock will be either a 'UT' price or, in the event that there are no transactions resulting form the auction, then the first 'AT' trade will be used.",
"title": ""
},
{
"docid": "a928a5c3aa932c66a58061c6b90a22e5",
"text": "On a summary level, there are three conceptual ways of clearing money electronically. Immediate clearing, where banks (often, but not necessarily) with support of the supervisory entities, send immediate drawing rights against their own cash reserves, and dedicate this right to the account of the receiving customer. This is rather expensive, as it limits the banks ability to use their cash reserves for their own banking operations (crediting etc). This is often the only way to wire significant (in comparison to the bank size) amounts of money. Internal clearing, where the money actually never leaves the bank - it's just moved between accounts of two different customers of the same bank. It's usually free, as the bank is still free to use your money to do it's banking, and it's usually immediate since nothing actually needs to happen besides a change in the banks entries. Batch clearing, where banks submit outstanding requests against each other, and calculate the net settlement. Basically, when you from bank A wire money to me in bank B, there is a high chance that a similar amount of money is wired between two other users it the opposite direction. After a bit of accounting the net imbalance is computed (and often drawn via immediate clearing) but the bulk of the money actually never leaves any of the banks, it just is reassigned between each banks customers as per agreed books. There are also additional ways where companies decide to open accounts in each of the banks and provide some sort of immediate clearing backed by the operators cash reserves rather than the banks.. and so on.. How does it happen in Indonesia? I have no idea, but I think a good overview of how it happens around the world is a publication by a partner entity of ours; http://pymntsreportstore.com/products/global-wire-transfer-choices If you are really curious, I'd research under what legal form does Paypal Indonesia operate (it should be somewhere in the archives) and figure out what other wiring options are available.",
"title": ""
},
{
"docid": "41d8fdff82afc393afa41b1b7afff9bc",
"text": "\"Note: the answer below is speculative and not based on any first-hand knowledge of pump-and-dump schemes. The explanation with spamming doesn't really makes sense for me. Often you see a stock jump 30% or more in a single day at a particular moment in time. Unlikely that random people read their emails at that time and decide to buy. What I think happens is the pumper does a somewhat risky thing: starts buying a lot of shares of a stock that has declined a lot and had low volumes during the previous days. As the price starts to increase other people start to notice the jump and join the buying spree (also don't forget that some probably use buy-stop orders which are triggered when the price reaches a particular level). Also there should be some automatic trading involved (maybe HFT firms do pump-and-dumps) as you have to trade a big volume in a relatively short time span. I think it is unlikely to be done by human operators. Another explanation would be that there is a group of pumpers (to spread the risk so to speak). Update: As I think more of it, it is not necessary to buy \"\"a lot of shares\"\". You could buy some shares, sell them to another pumper and buy from them again at a higher price in several iterations. I think this could also work if you do it fast enough. These scheme makes sense only you previously bought many shares at the low price, possibly during several weeks. Once the price is pumped high enough you can start selling the shares you previously bought (in the days preceding the pump).\"",
"title": ""
},
{
"docid": "7bc0ca2a3f1be2d286c1a259a8c7fbdc",
"text": "In the Anti-Money Laundering World ( AML) , structuring consists of the division ( breaking up) of cash transactions, deposits and withdrawals, with the intent to avoid the Currency Transaction Reporting ( CTR) filings. In your case the issue is not structuring but the fact that you have another person ( unknown to the bank) depositing cash , event if it is above the CTR threshold, for you to withdraw later . The entire scenario raises a lot of questions.",
"title": ""
},
{
"docid": "9a402e072142bb6aa6fb48a5ca3abaa0",
"text": "Yes, from June 1968 until December 1968, they closed the NYSE every Wednesday so they could catch up on paperwork representing billions of dollars in unprocessed transactions. Even after the NYSE re-opened on Wednesdays in January 1969, they still had to close it early at 2pm for seven more months. Forbes has a description of this: Not to be forgotten, though, is the Paperwork Crunch. In a day of email and the Cloud and trading completed in microseconds, the idea that Wall Street needed Wednesdays off in the late 1960′s to catch up on back-office tasks seems especially quaint. Yet, in 1968, the NYSE found itself sitting on more than $4 billion in unprocessed transactions. Trading had risen to 21 million shares daily; by contrast, even in the heavy volume days in 1929, trading never went above 16 million shares. Papers stacked on desks. A (now old) joke formed: If a fan blew the wrong way in a Wall Street office, visitors below could expect a ticker-tape parade. “Everybody agreed that the securities-processing system had virtually broken down, and the only major point of dispute was who was more responsible for the mess: the back offices of the brokerage firms of the stock-transfer agents,” Securities and Exchange Commission Commissioner Ray Garrett, Jr. said in 1974. Some 100 broker-dealers failed, crumbling under the pressure of fulfilling those back-orders. The fix: an organization akin to the FDIC, the Securities Investor Protection Corporation. Wall Street would stick to the shortened weeks from June to December; in January, Wednesday trading resumed, though it ended early at 2 for another seven months.",
"title": ""
},
{
"docid": "832437bac388e9144d8a839979a40ee4",
"text": "I have had this happen a couple of times because of splits or sales of portions of the company. The general timeline was to announce how the split was to be handled; then the split; then a freeze in purchasing stock in the other company; then a freeze in sales; followed by a short blackout period; then the final transfers to funds/options/cash based on a mapping announced at the start of the process. You need to answer two questions: To determine if the final transactions will make the market move you have to understand how many shares are involved compared to the typical daily volume. There are two caveats: professional investors will be aware of the transaction date and can either ignore the employee transactions or try and take advantage of them; There may also be a mirroring set of transactions if the people left in the old company were awarded shares in your company as part of the sale. If you are happy with the default mapping then you can do nothing, and let the transaction happen based on the announced timeline. It is easy, and you don't have to worry about deadlines. If you don't like the default mapping then you need to know when the blackout period starts, so you don't end up not being able to perform the steps you want when you want. Timing is up to you. If the market doesn't like the acquisition/split it make make sense to make the move now, or wait until the last possible day depending on which part they don't like. Only you can answer that question.",
"title": ""
},
{
"docid": "6585aa957213b3955929e37adc6b5818",
"text": "The money goes to the seller. There are a lot of behind the scenes things that happen, and some transactions are very complicated with many parties involved (evidenced by all the comments on @keshlam's perfectly reasonable high-level answer), but ultimately the money goes to the seller. Sometimes the seller is the company. The billions of shares that change hands each day are moving between other individuals like you and investment funds; these transactions have no direct impact on the company's financials, in general.",
"title": ""
},
{
"docid": "9805c71887a74c6a2ac9e9aca37b1f07",
"text": "\"The simple answer is, there are many ways for trades to take place. Some systems use order-matching software that employs proprietary algorithms for deciding the order of processing, others use FIFO structures, and so on. Some brokerages may fill customer orders out of their own accounts (which happens more frequently than you might imagine), and others put their orders into the system for the market makers to handle. There's no easy all-encompassing answer to your question, but it's still a good one to ask. By the way, asking if the market is \"\"fair\"\" is a bit naive, because fairness depends on what side of the trade you came out on! (grin) If your limit order didn't get filled and you missed out on an opportunity, that's always going to seem unfair, right?\"",
"title": ""
},
{
"docid": "aa1f9c1214d7c33fb2a1e73c46fcb482",
"text": "\"You don't. No one uses vanilla double entry accounting software for \"\"Held-For-Trading Security\"\". Your broker or trading software is responsible for providing month-end statement of changes. You use \"\"Mark To Market\"\" valuation at the end of each month. For example, if your cash position is -$5000 and stock position is +$10000, all you do is write-up/down the account value to $5000. There should be no sub-accounts for your \"\"Investment\"\" account in GNUCash. So at the end of the month, there would be the following entries:\"",
"title": ""
},
{
"docid": "065f69630f86e51394730e12b6f82f9b",
"text": "To sum up: My question came from misunderstanding what cost basis applies to. Now I get it that it applies to stocks as physical entities. Consider a chain of buys of 40 stock A with prices $1-$4-$10-$15 (qty 10 each time) then IRS wants to know exactly which stock I am selling. And when I transfer stocks to different account, that cost basis transfers with them. Cost basis is included in transfers, so that removes ambiguity which stock is being sold on the original account. In the example above, cost basis of 20 stocks moved to a new account would probably be $1 x 10 and $4 x 10, i.e. FIFO also applies to transfers.",
"title": ""
},
{
"docid": "ceb0169d967e05a1d9e2cb1df64a3729",
"text": "It depends on the broker. The one I use (Fidelity) will allow me to buy then sell or sell then buy within 3 days even though the cash isn't settled from the first transaction. But they won't let me buy then sell then buy again with unsettled cash. Of course not waiting for cash to settle makes you vulnerable to a good faith violation.",
"title": ""
},
{
"docid": "3e77db7e9fa33441623e940265591ae1",
"text": "\"When you exercise your options, you come up with cash to buy the shares. This makes you an owner of the company for shares at the share price your options let you have. Ideally, your share price is at a significant discount to what the company is worth. Being a shareholder, you gain from any share price appreciation in a sale. The only thing the \"\"60-day window\"\" applies to is whether you come up with the cash to buy fast enough, or your shares get permanently deleted from the company finances, where everyone else potentially makes more, you make nothing. The sale of the company is based on whenever the sell finalizes, which is between your company and the acquiring company.\"",
"title": ""
}
] |
fiqa
|
ae7e9244c27100b3ec3c8a136b280847
|
Can a self-employed person have a Health Savings Account?
|
[
{
"docid": "592ca1bb4e832e15848560bb6e21fbea",
"text": "\"Whether you can establish an HSA has nothing to do with your employment status or your retirement plan. It has to do with the type of medical insurance you have. The insurance company should be able to tell you if your plan is \"\"HSA compatible\"\". To be HSA compatible, a plan must have a \"\"high deductible\"\" -- in 2014, $1250 for an individual plan or $2500 for a family plan. It must not cover any expenses before the deductible, that is, you cannot have any \"\"first dollar\"\" coverage for doctor's visits, prescription drug coverage, etc. (There are some exceptions for services considered \"\"preventive care\"\".) There are also limits on the out-of-pocket max. I think that's it, but the insurance company should know if their plans qualify or not. If you have a plan that is HSA compatible, but also have another plan that is not HSA compatible, then you don't qualify. And all that said ... If you are covered under your husband's medical insurance, and your husband already has an HSA, why do you want to open a second one? There's no gain. There is a family limit on contributions to an HSA -- $6,550 in 2014. You don't get double the limit by each opening your own HSA. If you have two HSA's, the combined total of your contributions to both accounts must be within the limit. If you have some administrative reason for wanting to keep separate accounts, yes, you can open your own, and in that case, you and your husband are each allowed to contribute half the limit, or you can agree to some other division. I suppose you might want to have an account in your own name so that you control it, especially if you and your husband have different ideas about managing finances. (Though how to resolve such problems would be an entirely different question. Personally, I don't think the solution is to get into power struggles over who controls what, but whatever.) Maybe there's some advantage to having assets in your own name if you and your husband were to divorce. (Probably not, though. I think a divorce court pretty much ignores whose name assets are in when dividing up property.) See IRS publication 969, http://www.irs.gov/publications/p969/index.html for lots and lots of details.\"",
"title": ""
},
{
"docid": "2d57f3a9eae2a318daa394cf4b8d8175",
"text": "IRS Publication 969 gives all the details about HSA accounts and High Deductible plans: According to your question you are covered by a plan that can have an HSA. There a few points of interest for you: Contributions to an HSA Any eligible individual can contribute to an HSA. For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. Family members or any other person may also make contributions on behalf of an eligible individual. Contributions to an HSA must be made in cash. Contributions of stock or property are not allowed. That means that yes you could make a contribution to the HSA. Or if in the future you were the provider of the insurance you could have a HSA. Limit on Contributions For 2015, if you have self-only HDHP coverage, you can contribute up to $3,350. If you have family HDHP coverage you can contribute up to $6,650. It sounds like you have a family plan. Additional contribution. If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000. Rules for married people. If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. If each spouse has family coverage under a separate plan, the contribution limit for 2014 is $6,550. You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses' Archer MSAs. After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division. The rules for married people apply only if both spouses are eligible individuals. If both spouses are 55 or older and not enrolled in Medicare, each spouse's contribution limit is increased by the additional contribution. If both spouses meet the age requirement, the total contributions under family coverage cannot be more than $8,550. Each spouse must make the additional contribution to his or her own HSA. Note: most of the document was written with 2014 numbers, but sometimes they mention 2015 numbers. If both are covered under a single plan it should be funded by the person that has the plan. They may get money from their employer. They may be able to have the employer cover the monthly fee that most HSA administrators charge. The non employee can make contributions to the account but care must be taken to make ure the annual limits aren't exceeded. HSA contributions from the employees paycheck may reduce the social security tax paid by the employee. If the non-employee is self employed you will have to see how the contribution impacts the social security situation for the couple. If the non-employee is 55 or older it can make sense to throw in that extra $1000. The employer may not allow it to come from the paycheck contributions because they wouldn't necessarily know the age of the spouse, they may put a maximum limit based on the age of the employee.",
"title": ""
}
] |
[
{
"docid": "c8429265033f2b74acb269e7e2c43e9f",
"text": "In the USA, you probably owe Self Employment Tax. The cutoff for tax on this is 400$. You will need to file a tax return and cover the medicaid expenses as if you were both the employer and employee. In addition, if he earns income from self-employment, he may owe Self-Employment Tax, which means paying both the employee’s and employer's share of Social Security and Medicaid taxes. The trigger for Self Employment Tax has been $400 since 1990, but the IRS may change that in the future. Also see the IRS website. So yes, you need to file your taxes. How much you will pay is determined by exactly how much your income is. If you don't file, you probably won't be audited, however you are breaking the law and should be aware of the consequences.",
"title": ""
},
{
"docid": "b29218638d78e9b10227d3fdda3655af",
"text": "\"I am very late to this forum and post - but will just respond that I am a sole proprietor, who was just audited by the IRS for 2009, and this is one of the items that they disallowed. My husband lost his job in 2008, I was unable to get health insurance on my own due to pre-existing ( not) conditions and so we had to stay on the Cobra system. None of the cost was funded by the employer and so I took it as a SE HI deduction on Line 29. It was disallowed and unfortunately, due to AGI limits, I get nothing by taking it on Sch. A. The auditor made it very clear that if the plan was not in my name, or the company's name, I could not take the deduction above the line. In his words, \"\"it's not fair, but it is the law!\"\"\"",
"title": ""
},
{
"docid": "47f5d3be84732280911f07b349640b98",
"text": "You could open an HSA with a company like Vanguard or Fidelity that offers lower fees and roll the money there if you want to avoid the $3.50/month. The chances of you going until retirement without opportunities to spend down the money in that account on medical expenses seems rather low.",
"title": ""
},
{
"docid": "7aeccd8d70a17e60f0e13c3bd7c0bad7",
"text": "\"Yes, you can. See the instructions for line 29 of form 1040. Self employed health insurance premiums are an \"\"above the line\"\" deduction.\"",
"title": ""
},
{
"docid": "2b0e332ffa8a284d5b2e0173613b0944",
"text": "CrimsonX did a great job highlighting the primary pros and cons of HSAs, so I won't go into detail there. However, I did want to point out another pro - HSAs are (or can be) easy to manage. You said: Is this a better way to approach health care costs instead of itemizing health care expenses on yearly federal taxes? I'm not sure which company you are looking at establishing your HSA with, but with mine I have a debit card that I use when paying for medical care and then at the end of the year I get a 1099-SA that provides the amount of money spent on qualified purchases that calendar year. Yes, there are a few extra boxes I need to fill in for my 1040 come tax time, but I don't need to itemize my healthcare costs over the year. It really is pretty simple and straightforward. Also, one con that is worth noting is that you become much more sensitive to healthcare costs due to the high deductible healthcare plan an HSA requires. For example, in all the years we've had an HSA we've not yet met our deductible, which means we pay out of pocket for any non-routine doctor visits. (The health insurer pays 100% of routine visits, like my wife's annual, well-baby check ups for the little one, and so on.) So, when you're feeling really sick and think a doctor's visit would be warranted, you have to make a decision: After being faced with this decision a time or two you will start to envy those who have just a $20 copay! Of course, that's just an emotional con. Each year I run the numbers on how much we spent per year on out of pocket plus premiums and compare it to what it would cost in premiums for an HMO-type plan, and the HSA plan always comes ahead. (In part because we are a pretty healthy family and I work for myself so do not get to enjoy group discount rates.) But I thought it worth mentioning because there are certainly times when I know I need to see a doctor or specialist and I cringe because I know I am going to be slapped with a big bill in the not too distant future!",
"title": ""
},
{
"docid": "b2635248cd6f4a5ad54e321d27fcb3d6",
"text": "\"Basically, yes. Don't use your business account for personal spending because it may invalidate your limited liability protection. Transfer a chunk of money to your personal account, write it down in your books as \"\"distribution\"\" (or something similar), and use it in whatever way you want from your personal account. The IRS doesn't care per se, but mixing personal and business expenses will cause troubles if you're audited because you'll have problems distinguishing one from another. You should be using some accounting software to make sure you track your expenses and distributions correctly. It will make it easier for you to prepare reports for yourself and your tax preparer, and also track distributions and expenses. I suggest GnuCash, I find it highly effective for a small business with not so many transactions (if you have a lot of transactions, then maybe QuickBooks would be more appropriate).\"",
"title": ""
},
{
"docid": "b53a96763ca7c8a044099cc57e193c1e",
"text": "\"I did a little research and found this article from 2006 by a Villanova law professor, titled \"\"No Thanks, Uncle Sam, You Can Keep Your Tax Break\"\". The final paragraph of the article says: Under these circumstances, it is reasonable to conclude that a taxpayer is not required to claim a allowable deduction unless a statutory provision so requires, or a binding judicial precedent so specifies. It would be unwise, of course, to forego a deduction that the IRS considers mandatory such as those claimed by self-employed individuals with respect to their self-employment, whether for purposes of the self-employment tax or the earned income tax credit. Until the statute is changed or some other binding authority is issued, there is no reason taxpayers who wish to forego deductions, such as the dependency exemption deduction, should hesitate in doing so. (The self-employment tax issues in the quote cited by CQM are explicitly discussed in the article as one of a few special kinds of deduction which are mandatory.) This is not a binding statement: it's not law or even official IRS policy. You could never use it as a defense in the event that this professor turned out to be wrong and the IRS decided to go after you anyway. However, it is a clear statement from a credible, qualified source.\"",
"title": ""
},
{
"docid": "71789ebecce6528edd26dec2e904e972",
"text": "HSAs are very similar to IRAs. Any investment returns grow tax-deferred and once you reach age 59 1/2 65, you can withdraw the funds for any purpose (subject to ordinary income tax), just like a traditional IRA. If you can afford to do so, I would recommend you to pay medical expenses out-of-pocket and let the funds in your HSA accumulate and grow. In general, the best way to allocate your funds is in the following order: Contribute to a 401(k) if your employer matches funds at a substantial rate Pay off high-interest debt (8% of more in current environment in 2011) Contribute to an IRA (traditional or Roth) Contribute to an HSA Contribute to a 401(k) without the benefit of employer matching One advantage of HSAs versus IRAs is that you don't have to have earned income (salary or self-employment income) in order to contribute. If you derive income solely from rents, interest or dividends, you can contribute the maximum amount ($3,050 for individuals in 2011) and get a full deduction from your income (Of course, you will need to maintain a high-deductible health plan in order to qualify). One downside of HSAs is the lack of competitively priced providers. Wells Fargo offers HSAs for free, but only allows you to keep your funds in cash, earning a very measly interest rate, or invest them in rather mediocre and expensive Wells Fargo mutual funds. Vanguard, known for its low-fee investment options, provides HSAs through a partner company, but the account maintenance charges are still quite high. Overall, HSAs are a worthwhile option as part of your investment plan.",
"title": ""
},
{
"docid": "8b8d28b5cc468191072149c2e1c9c59f",
"text": "Here is a quote from the IRS website on this topic: You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The insurance can also cover your child who was under age 27 at the end of 2011, even if the child was not your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. One of the following statements must be true. You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ (Form 1040), Net Profit From Business; or Schedule F (Form 1040), Profit or Loss From Farming. You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., box 14, code A. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2, Wage and Tax Statement. The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business. For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual. For partners, a policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. If you previously filed returns without using Medicare premiums to figure the deduction, you can file timely amended returns to refigure the deduction. For more information, see Form 1040X, Amended U.S. Individual Income Tax Return. Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction. Take the deduction on Form 1040, line 29.",
"title": ""
},
{
"docid": "a05442e54252272a9f4dd06756dbb3e1",
"text": "If you do not presently have an HSA-compatible insurance plan, you cannot legally add money to your HSA. You can still withdraw, but you can't add. So basically your choice are to let the money sit there and be nibbled away by the monthly fees, to withdraw it anyway and pay the tax penalty, or to spend it on whatever medical expenses you do have. I have no idea what your expenses are, how good your present insurance is and how often you and any dependents see a doctor or get prescriptions. If you used it for ALL uncovered expenses, how long would it take to use it up?",
"title": ""
},
{
"docid": "53990967faa1ef5dd5726f5e2ff4db20",
"text": "HSA's are one of the few accounts where the money is both tax free going in and coming out. For long term savings, the only account that might beat that is a 401(k) with an employer match. Unlike an FSA, the money can stay in the account indefinitely. You can also use the money to pay medical insurance premiums once you separate from the employer. An HSA combines the best features of a FSA, Roth account, and IRA/401(k) account. As such I think there is rarely a reason not to max one out, and in fact I think it is worth it to go out of your way to get access to one. There are some drawbacks, of course. If you don't use the money for medical expenses, it may be taxed and perhaps penalized. Getting access to one can be tricky (you have to be covered by an HDHP, but not by a non-HDHP, nor by an FSA). The low contribution limits make it hard to build up a large balance. Many providers charge a monthly fee of $1 to $4 if you want to invest the balance (small, but it adds up, especially given the low balance per previous sentence).",
"title": ""
},
{
"docid": "451d72904d2463edaf67fad3277b2036",
"text": "Yes, you will need to deposit the funds into your HSA, then withdraw them to reimburse yourself for the expenses. The tax deduction comes when you contribute (deposit) to your HSA. If you do not deposit the money there, you will not be able to claim the deduction. Your HSA provider reports the amount of your contributions to the IRS, so the amount you say you contribute to your HSA on your tax return has to match what your HSA provider reports. When you deposit the money to your HSA, you need to explicitly tell your provider that the contribution is for tax year 2014. The reason is that you want to make sure that they report the amount of your 2014 contributions to the IRS correctly. After you've deposited the amount into your HSA, you can withdraw it to reimburse yourself for an eligible medical expense. In order to be eligible, it needs to be an expense that was incurred while you had the HSA in place. If you had your HSA account in place before you paid the expense, no problem. But if you set up the HSA account after you paid for the expense, you might be out of luck. The distribution (withdrawal) will be a part of tax year 2015, and you'll see this amount included as part of the gross distributions on your 1099-SA form next year. When I first set up my HSA, I didn't have any extra money to fund the HSA, so I handled it just like you are talking about. I would wait until I had a medical bill, then deposit the amount I needed into my HSA and withdraw it back out to pay the bill.",
"title": ""
},
{
"docid": "6087a9d2467ed3970de52e8333b8321a",
"text": "On re-reading the question, I see that you're self-employed, decent income, but only have an IRA. Since the crux of the question appears to be related to your wanting to put aside more money, I suggest you open a Solo 401(k) account. The current year limit is $17,000, and you can still have an IRA if you wish.",
"title": ""
},
{
"docid": "57134808323233c6e7940de4f58cb839",
"text": "For the first four months of the year, when you were an employee, the health insurance premiums were paid for with pre-tax money. When you receive your W-2 at the end of the year, the amount in Box 1 of the W-2 will be reduced by the amount you paid for health insurance. You can't deduct it on your tax return because it has already been deducted for you. Now that you are a 1099 independent contractor, you are self-employed and eligible for the self-employed health insurance deduction. However, as you noted, the COBRA premiums are likely not eligible for this deduction, because the policy is in your old employer's name. See this question for details, but keep in mind that there are conflicting answers on that question.",
"title": ""
},
{
"docid": "c13247d22b07329cfee1a80df0f5e770",
"text": "OK, so first of all, employers don't set up IRAs. IRA stands for Individual Retirement Account. You can set up a personal IRA for yourself, but not for employees. If that is what you're after, then just set one up for yourself - no special rules there for self employment. As far as setting up a 401(k), I'd suggest checking with benefits management companies. If you're small, you probably don't have an HR department, so managing a 401(k) yourself would likely be overly burdensome. Outsourcing this to a company which handles HR for you (maybe running payroll, etc. also), would be the best option. Barring that, I'd try calling a large financial institution (Schwab, Fidelity, etc.) for clear guidance.",
"title": ""
}
] |
fiqa
|
ab48c23d757b77d4dff07e949778db13
|
Should we buy a house, or wait?
|
[
{
"docid": "05fe48493991c5b36b90932e2b37f540",
"text": "Some highly pessimistic things worth noting to go alongside all the stability and tax break upside that homes generally provide: Negative equity is no joke and basically the only thing that bankrupts the middle classes consistently en masse. The UK is at the end of a huge housing bull run where rents are extremely cheap relative to buying (often in the 1% range within the M25), Brexit is looming and interest rates could well sky rocket with inflation. Borrowing ~500k to buy a highly illiquid asset you might have to fire sale in case of emergency/job loss etc for 300k in a few years when lots of (relatively) cheap rental housing is available to rent risk free, could be argued to be a highly lopsided and dangerous bet vs the alternatives. Locking in 'preferential' mortgage rates can be a huge trap: low interest rates generally increase asset values. If/when they rise, assets fall in value as the demand shrinks, making you highly exposed to huge losses if you need to sell before it is paid off. In the case of housing this can be exceptionally vicious as the liquidity dramatically dries up during falls, meaning fire sales become much more severe than they are for more liquid assets like stock. Weirdly and unlike most products, people tend to buy the very best house they can get leverage for, rather than work out what they need/want and finding the best value equivalent. If a bank will lend you £20 a day to buy lunch, and you can just afford to pay it, do you hunt out the very best £20 lunch you can every day, or do you make some solid compromises so you can save money for other things etc? You seem to be hunting very close to the absolute peak amount you can spend on these numbers. Related to above, at that level of mortgage/salary you have very little margin for error if either of you lose jobs etc. Houses are much more expensive to maintain/trade than most people think. You spend ~2-5% every time you buy and sell, and you can easily spend 2-20k+ a year depending what happens just keeping the thing watertight, paid for, liveable and staying up. You need to factor this in and be pessimistic when you do. Most people don't factor in these costs to the apparent 'index' rise in house values and what they expect to sell for in x years. In reality no buy and hold investor can ever realise even close to the quoted house price returns as they are basically stocks you have to pay 5% each time you buy or sell and then 1-20% percent a year to own - they have to rise dramatically over time for you to even break even after all the costs. In general you should buy homes to make memories, not money, and to buy them at prices that don't cause you sleepless nights in case of disasters.",
"title": ""
},
{
"docid": "cc952689a665f740665146ab357152c9",
"text": "Advantages of buying: With every mortgage payment you build equity, while with rent, once you sign the check the money is gone. Eventually you will own the house and can live there for free. You can redecorate or remodel to your own liking, rather than being stuck with what the landlord decides is attractive, cost-effective, etc. Here in the U.S. there are tax breaks for homeowners. I'm not sure if that's true in U.K. Advantages of renting: If you decide to move, you may be stuck paying out a lease, but the financial penalty is small. With a house, you may find it difficult to sell. You may be stuck accepting a big loss or having to pay a mortgage on the empty house while you are also paying for your new place. When there are maintenance issues, you call the landlord and it's up to him to fix it. You don't have to come up with the money to pay for repairs. You usually have less maintenance work to do: with a house you have to mow the lawn, clear snow from the driveway, etc. With a rental, usually the landlord does that for you. (Not always, depends on type of rental, but.) You can often buy a house for less than it would cost to rent an equivalent property, but this can be misleading. When you buy, you have to pay property taxes and pay for maintenance; when you rent, these things are included in the rent. How expensive a house you can afford to buy is not a question that can be answered objectively. Banks have formulas that limit how much they will loan you, but in my experience that's always been a rather high upper bound, much more than I would actually be comfortable borrowing. The biggest issue really is, How important is it to you to have a nice house? If your life-long dream is to have a big, luxurious, expensive house, then maybe it's worth it to you to pour every spare penny you have into the mortgage. Other people might prefer to spend less on their house so that they have spare cash for a nice car, concert tickets, video games, cocaine, whatever. Bear in mind that if you get a mortgage that you can just barely afford, what do you do if something goes wrong and you can't afford it any more? What if you lose your job and have to take a lower-paying job? What if some disaster strikes and you have some other huge expense? Etc. On the flip side, the burden of a mortgage usually goes down over time. Most people find that their incomes go up over time, between inflation and growing experience. But the amount of a mortgage is fixed, or if it varies it varies with interest rates, probably bouncing up and down rather than going steadily up like inflation. So it's likely -- not at all certain, but likely -- that if you can just barely afford the payment now, that in 5 or 10 years it won't be as big a burden.",
"title": ""
},
{
"docid": "b709e69dbf9007ae850e17bc6b2055aa",
"text": "You are very young, you make a huge amount of money, and you have (from what information you provide) very little debt. If you simply want to buy a house for whatever reason, sure, but be honest with yourself about why you want to buy it. I see a lot of people who think they're doing it for smart financial reasons, but then when I ask them about their pension savings and credit card debts and so on, there is no evidence that they are actually the kind of person who makes decisions for smart financial reasons. If you want a house because that seems like the thing that people do, maybe you could think more about what you actually want. If your concern is putting your money to work for you (you seem to dislike that you pay rent each month and after that month you don't have anything to show for your money, except of course that you didn't spent the last month living on the streets), you can do a lot better than getting a mortgage. For example, living frugally you should be able to dump 50k a year into investments; if you did that for a few years, you could reasonably expect the return to cover your rent and bills in a surprisingly small number of years (a lot less than a 25 year mortgage). Your question seems to be starting from the position that you should buy a house. You're asking if you should buy it now, or wait. You are rich enough now (and if your earnings keep going up, will be even more rich in a few years) that you should perhaps question your need to buy a house. With your kind of money, at this stage of your life, you can do a lot better.",
"title": ""
}
] |
[
{
"docid": "d1fe91bd871e5aa41bb2604ae5b2023e",
"text": "\"Trying to determine what the best investment option is when buying a home is like predicting the stock market. Not likely to work out. Forget about the \"\"investment\"\" part of buying a home and look at the quality of life, monthly/annual financial burden, and what your goals are. Buy a home that you'll be happy living in and in an area you like. Buy a home with the plan being to remain in that home for at least 6 years. If you're planning on having kids, then buy a home that will accommodate that. If you're not planning on living in the same place at least 6 years, then buying might not be the best idea, and certainly might not be the best \"\"investment\"\". You're buying a home that will end up having emotional value to you. This isn't like buying a rental property or commercial real estate. Chances are you won't lose money in the long run, unless the market crashes again, but in that case everyone pretty much gets screwed so don't worry about it. We're not in a housing market like what existed in decades past. The idea of buying a home so that you'll make money off it when you sell it isn't really as reliable a practice as it once was. Take advantage of the ridiculously low interest rates, but note that if you wait, they're not likely to go up by an amount that will make a huge difference in the grand scheme of things. My family and I went through the exact same thought process you're going through right now. We close on our new house tomorrow. We battled over renting somewhere - we don't have a good rental market compared to buying here, buying something older for less money and fixing it up - we're HGTV junkies but we realized we just don't have the time or emotional capacity to deal with that scenario, or buying new/like new. There are benefits and drawbacks to all 3 options, and we spent a long time weighing them and eventually came to a conclusion that was best for us. Go talk to a realtor in your area. You're under no obligation to use them, but you can get a better feel for your options and what might best suit you by talking to a professional. For what it's worth, our realtor is a big fan of Pulte Homes in our area because of their home designs and quality. We know some people who have bought in that neighborhood and they're very happy. There are horror stories too, same as with any product you might buy.\"",
"title": ""
},
{
"docid": "d9b3d137a9a7b62ce07f8c493bc452fd",
"text": "\"As Yishani points out, you always have to do due diligence in buying a house. As I mentioned in this earlier post I'd highly recommend reading this book on buying a house associated with the Wall Street Journal - it clearly describes the benefits and challenges of owning a house. One key takeaway I had was - on average houses have a \"\"rate of return\"\" on par with treasury bills. Its best to buy a house if you want to live in a house, not as thinking about it as a \"\"great investment\"\". And its certainly worth the 4-6 hours it takes to read the book cover to cover.\"",
"title": ""
},
{
"docid": "ee18beb10c5364ac10f1e1b3c12320fb",
"text": "\"I'd like to suggest a plan. First, I know you want to buy a house. I get that, and that is an awesome goal to work for. You need to really sit down and decide why you want a house. People often tell we that they want a house because they are throwing their money away renting. This is just not true. There is a cost of renting, that is true, but there is also a cost of owning. There are many things with a house that you will have to pay for that will add little or no equity/value. Now that equity is nice to have, but make no mistake under no circumstance does every dime you put into your house increase its value. This is a huge misconception. There is interest, fees, repairs, taxes, and a bunch of other stuff that you will spend money on that will not increase the value of your home. You will do no harm, waiting a bit, renting, and getting to a better place before you buy a house. With that out of the way, time for the plan. Note: I'm not saying wait to buy a house; I am saying think of these as steps in the large house buying plan. Get your current debt under control. Your credit score doesn't suck, but it's not good either. It's middle of the road. Your going to want that higher if you can, but more importantly than that, you want to get into a pattern of making debt then honoring it. The single best advise I can give you is what my wife and I did. Get a credit card (you have one; don't get more) and then get into a habit of not spending more on that credit card than you actually have in the bank. If you have $50 in the bank, only spend that on your credit card. Then pay it in full, 100%, every payday (twice a month). This will improve your score quite a bit, and will, in time, get you in the habit of buying only what you can afford. Unless there has been an emergency, you should not be spending more on credit than you actually have. Your car loan needs to get under control. I'm not going to tell you to pay it off completely, but see point 2. Your car debt should not be more than you have in the bank. This, again is a credit building step. If you have 7.5k in the bank and own 7.5k on your car, your ability to get a loan will improve greatly. Start envelope budgeting. There are many systems out there, but I like YNAB a lot. It can totally turn your situation around in just a few months. It will also allow you to see your \"\"house fund\"\" growing. Breaking Point So far this sounds like a long wait, but it's not. It also sounds like I am saying to wait to actually buy a house, and I'm not. I am not saying get your debt to 0, nor do I think you should wait that long. The idea is that you get your debt under control and build a nice solid set of habits to keep it under control. A look at your finances at this point Now, at this point you still have debt, but your credit cards are at 0 and have been, every payday for a few months. Your car loan still exists, but you have money in the bank to cover this debt, and you could pay it off. It would eat your nest egg, but you could. You also have 15k set aside, just for the house. As you take longer looking for that perfect house, that number keeps growing. Your bank account now has over $25,000 in it. That's a good feeling on its own, and if you stick with your plan, buy your house and put down $15k, you still have plenty of wiggle room between credit cards that are not maxed out, and a $7.5k \"\"padding\"\" in case the roof falls in. Again it sounds like I'm saying wait. But I'm not, I'm saying plan better. All of these goals are very doable inside one year, a rough year to be sure, but doable. If you want to do it comfortably, then take two years. In that time you're looking, searching and learning.\"",
"title": ""
},
{
"docid": "7ba9327c8f024c08fa6c256cf3ec6196",
"text": "Which is generally the better option (financially)? Invest. If you can return 7-8% (less than the historical return of the S&P 500) on your money over the course of 25 years this will outperform purchasing personal property. If you WANT to own a house for other reason apart from the financial benefits then buy a house. Will you earn 7-8% on your money, there is a pretty good chance this is no because investors are prone to act emotionally.",
"title": ""
},
{
"docid": "528e9b8e5ef698517b93e191fdd28af0",
"text": "It is a very bad idea in almost all circumstances to borrow/withdraw from an IRA (or other retirement account) for a down payment on a house and I would only suggest it as a last resort. Even as a last resort it is a bad idea, and I'd suggest you aren't ready to buy a house until you have enough non-retirement money to do the deal. In your case you have money in savings, you should absolutely do that. If you don't feel comfortable using your emergency fund, you need to keep saving until you can afford to buy a house. Your retirement fund isn't a piggy bank for when you need money now, it is a payment you make to keep a decent lifestyle later in life. When you are retired your options for alternate income streams will be much more limited. The biggest hidden cost is the opportunity cost of not having that money working for you. Your final retirement balance is very likely (when done correctly) going to be mostly comprised of the return on your investment more so than the money you put in. While you are young your greatest asset is time for that money to grow, don't throw that away when you have viable options! The other problem, if you are talking about an employer plan (401K/Roth) is that if you lose your job you will have 60-90 days to pay back the loan or it will be considered a distribution and subject to taxes plus a 10% early withdrawal penalty. This happened to a bunch of my friends from work when our company got bought by another company forcing them to close the old 401K plan and transfer to the new one. Short version: Don't touch retirement money for non-retirement things unless it is a life/death emergency and you have no other options.",
"title": ""
},
{
"docid": "26cbf718ff59fcc3d6dcab61bda540c0",
"text": "I just read through all of the answers to this question and there is an important point that no one has mentioned yet: Oftentimes, buying a house is actually cheaper than renting the identical house. I'm looking around my area (suburbs of Chicago, IL) in 2017 and seeing some houses that are both for sale and for rent, which makes for an easy comparison. If I buy the house with $0 down (you can't actually put $0 down but it makes the numerical comparison more accurate if you do), my monthly payment including mortgage (P+I), taxes, insurance, and HOA, is still $400 less than the monthly rent payment. (If I put 20% down it's an even bigger savings.) So, in addition to the the tax advantages of owning a home, the locked in price that helps you in an economy that experiences inflation, and the accumulated equity, you may even have extra cash flow too. If you were on the fence when you would have had to pay more per month in order to purchase, it should be a no-brainer to buy if your monthly cost is lower. From the original question: Get a loan and buy a house, or I can live for the rest of my life in rent and save the extra money (investing and stuff). Well, you may be able to buy a house and save even more money than if you rent. Of course, this is highly dependent on your location.",
"title": ""
},
{
"docid": "6de6830ca2a32ae3fda25b350ee7088c",
"text": "IMO student loans are junk debt that should be dealt with as soon as possible. Buying a house comes with risks and expenses (repairs, maintenance, etc) and dealing with a student loan at the same time just makes it tougher. Personally, I would try to pay off at least a few of the loans first.",
"title": ""
},
{
"docid": "42017314ad29c44e315aa4a2cccc938a",
"text": "In October 2011 in the United States, you just don't have any options. Save your money in a savings account and that is the best you can do. Your desire to buy a house means you are a saver not an investor, and you risk tolerance on this pile of money is 0. Save it in a bank account; I highly doubt chasing an interest rate will pay off with any significance. (being highly dependent on your opinion of significant)",
"title": ""
},
{
"docid": "55c5a0dbe4783ab733a40cb5cb74d70e",
"text": "IMHO you are in no position to buy a home. If it was me, I'd payoff the student loans, pay off the car, get those credit card balances to zero (and keep them there), and save up at least 10K (as an emergency fund) before even considering buying a home. Right now you have no wiggle room. A relatively minor issue with a purchased home can send you right back into trouble financially. You may be eager to buy, but your finances say different. Take some time to get your finances on track then think about buying. You can make a really good long term financial decision with no risk: pay off those credit cards and keep them paid off. That is a much smarter decision then buying a home at this point in your life.",
"title": ""
},
{
"docid": "9d05584f82fe96e043702213bf3c41ea",
"text": "Buy a car. Unless you definitely know you are living in the area for a good long time, avoid buying a house and get a car instead.",
"title": ""
},
{
"docid": "9a70e0a7f1fa8d4e865d69af9323bfbf",
"text": "\"How to spend the money is up to you. That includes spending money on your house. (This is a safer way to look at it than an \"\"investment\"\". Not that it can't ever be treated as such, but that doing so often makes it easy to justify bad decisions and overspending on the house.) So with regards to the mortgage: So if it's not a monstrously huge deal, you might prefer to avoid default. Now, how to invest the rest while waiting to spend it, now...\"",
"title": ""
},
{
"docid": "a32128b98056c92c64e095dc5a82e13e",
"text": "\"Houses tend to appreciate more than condos. Houses are also more expensive. So it's a choice. You mention your girlfriend will be buying it with you. Take the time now to decide what will happen if you split up and put it in writing. Are you splitting the downpayment and mortgage 50/50? If not things can get complicated. Also consider home improvement costs, etc. If you think she is \"\"the one\"\" and you'll end up starting a family together, look at the location, nearby schools, etc. Sure, it may sound too early to be thinking about these things, but if you get a head start on finding a nice house you could save a lot of money and build a lot of equity with some smart decisions today.\"",
"title": ""
},
{
"docid": "6950d92f340ffdb328d15afac8299aba",
"text": "BLUF: Continue renting, and work toward financial independence, you can always buy later if your situation changes. Owning the house you live in can be a poor investment. It is totally dependent on the housing market where you live. Do the math. The rumors may have depressed the market to the point where the houses are cheaper to buy. When you do the estimate, don't forget any homeowners association fees and periodic replacement of the roof, HVAC system and fencing, and money for repairs of plumbing and electrical systems. Calculate all the replacements as cost over the average lifespan of each system. And the repairs as an average yearly cost. Additionally, consider that remodeling will be needful every 20 years or so. There are also intangibles between owning and renting that can tip the scales no matter what the numbers alone say. Ownership comes with significant opportunity and maintenance costs and is by definition not liquid, but provides stability. As long as you make your payments, and the government doesn't use imminent domain, you cannot be forced to move. Renting gives you freedom from paying for maintenance and repairs on the house and the freedom to move with only a lease to break.",
"title": ""
},
{
"docid": "3eff2d19c29b1c7d18c9fb810330fac4",
"text": "\"Welcome to Money.SE, and thank you for your service. In general, buying a house is wise if (a) the overall cost of ownership is less than the ongoing cost to rent in the area, and (b) you plan to stay in that area for some time, usually 7+ years. The VA loan is a unique opportunity and I'd recommend you make the most of it. In my area, I've seen bank owned properties that had an \"\"owner occupied\"\" restriction. 3 family homes that were beautiful, and when the numbers were scrubbed, the owner would see enough rent on two units to pay the mortgage, taxes, and still have money for maintenance. Each situation is unique, but some \"\"too good to be true\"\" deals are still out there.\"",
"title": ""
},
{
"docid": "167b251597ca2ddfdfb431069e0cb380",
"text": "The simple answer is that you are correct. You should not purchase a house until you are financially stable enough to do so. A house is an asset that you must maintain, and it can be expensive to do so. Over the long term, you will generally save money by purchasing. However, in any given year you may spend much more money than a similar rental situation - even if the rent is higher than your mortgage payment. If you are financially stable with good cash savings or investments plus a 20% down payment, then anytime is a good time to buy if that is part of your financial plan. As of now in 2016, is is safe to assume that mortgage rates would/should not get back to 10%? Does this mean that one should always buy a house ONLy when mortgage rates are low? Is it worth the wait IF the rates are high right now? The mortgage rates are not the primary driver for your purchase decision. That might be like saying you should buy everything on sale at Target... because it's on sale. Don't speculate on future rates. Also, keep in mind that back when rates were high, banks were also giving much better savings/CD rates. That is all connected. Is refinancing an option on the table, if I made a deal at a bad time when rates are high? You need to make sure you get a loan that allows it. Always do a break-even analysis, looking at the money up-front you spend to refi vs the savings-per-year you will get. This should give you how many years until the refi pays for itself. If you don't plan on being in the house that long, don't do it. How can people afford 10% mortgage? Buying a house they can afford, taking into consideration the entire payment+interest. It should be a reasonable amount of your monthly income - generally 25% or less. Note that this is much less than you will be 'approved' for by most lenders. Don't let good rates suck you into a deal you will regret. Make sure you have the margin to purchase and maintain a home. Consider where you want to be living in 5 years. Don't leave so little financial breathing room that any bump will place you at risk of foreclosure. That said, home ownership is great! I highly recommend it.",
"title": ""
}
] |
fiqa
|
3cf6c4632425c6e2fd8b50ca41837e80
|
Small investing for spending money?
|
[
{
"docid": "638e5dffc189949a5b4ba471ef3f81ab",
"text": "First thing to know about investing is that you make money by taking risks. That means the possibility of losing money as well as making it. There are low risk investments that pretty much always pay out but they don't earn much. Making $200 a month on $10,000 is about 26% per year. That's vastly more than you are going to earn on low risk assets. If you want that kind of return, you can invest in a diversified portfolio of equities through an equity index fund. Some years you may make 26% or more. Other years you may make nothing or lose that much or more. On average you may earn maybe 7%-10% hopefully. Overall, investing is a game of making money over long horizons. It's very useful for putting away your $10k now and having hopefully more than that when it comes time to buy a house or retire or something some years into the future. You have to accept that you might also end up with less than $10K in the end, but you are more likely to make money than to use it. What you describe doesn't seem like a possible situation. In developed markets, you can't reliably expect anything close to the return you desire from assets that are unlikely to lose you money. It might be time to re-evaluate your financial goals. Do you want spending money now, or do you want to invest for use down the road?",
"title": ""
},
{
"docid": "129bdb80fca89317d965a8135a162d36",
"text": "\"Congrats on saving the money but unfortunately, you're looking for a 24% annual rate of return and that's not \"\"reasonable\"\" to expect. $200 per month, is $2,400 per year. $2,400/$10,000 is 24%. In a 1% savings account with spending of $200 per month spending you'll have about $7,882 at the end of the year. You'll earn about $90 of interest over the course of the year. I'm sure other people will have more specific opinions about the best way to deploy that money. I'd open a brokerage account (not an IRA, just a regular plain vanilla brokerage account), break off $5,000 and put it in to a low fee no commission S&P index fund; which CAN lose value. Put the rest in a savings account/checking account and just spend wisely.\"",
"title": ""
},
{
"docid": "64cff02e47a8f96bc2e6b0f27a7b48b0",
"text": "\"The existing answers are good, I justed wanted to provide a simpler answer to your question: Would I be able to invest this in a reasonable way that it would provide me with say $200 spending money per month over the school year? No. There is no way to invest $10,000 to reliably get $200 every month. Any way that you invest it that has even the possibility of getting that much will have a significant possibility of losing a lot of money. If you want to get \"\"free\"\" spending money out without risk of losing money, you're unlikely to be able to find an investment that will give you more than a couple dollars per month.\"",
"title": ""
},
{
"docid": "7b2b5680166af921079718e37b719cb9",
"text": "Just to offer another alternative, consider Certificates of Deposit (CDs) at an FDIC insured bank or credit union for small or short-term investments. If you don't need access to the money, as stated, and are not willing to take much risk, you could put money into a number of CDs instead of investing it in stocks, or just letting it sit in a regular savings/checking account. You are essentially lending money to the bank for a guaranteed length of time (anywhere from 3 to 60 months), and therefore they can give you a better rate of return than a savings account (which is basically lending it to them with the condition that you could ask for it all back at any time). Your rate of return in CDs is lower a typical stock investment, but carries no risk at all. CD rates typically increase with the length of the CD. For example, my credit union currently offers a 2.3% APY on a 5-year CD, but only 0.75% for 12 month CDs, and a mere 0.1% APY on regular savings/checking accounts. Putting your full $10K deposit into one or more CDs would yield $230 a year instead of a mere $10 in their savings account. If you go this route with some or all of your principal, note that withdrawing the money from a CD before the end of the deposit term will mean forfeiting the interest earned. Some banks may let you withdraw just a portion of a CD, but typically not. Work around this by splitting your funds into multiple CDs, and possibly different term lengths as well, to give you more flexibility in accessing the funds. Personally, I have a rolling emergency fund (~6 months living expenses, separate from all investments and day-to-day income/expenses) split evenly among 5 CDs, each with a 5-year deposit term (for the highest rate) with evenly staggered maturity dates. In any given year, I could close one of these CDs to cover an emergency and lose only a few months of interest on just 20% of my emergency fund, instead of several years interest on all of it. If I needed more funds, I could withdraw more of the CDs as needed, in order of youngest deposit age to minimize the interest loss - although that loss would probably be the least of my worries by then, if I'm dipping deeply into these funds I'll be needing them pretty badly. Initially I created the CDs with a very small amount and differing term lengths (1 year increments from 1-5 years) and then as each matured, I rolled it back into a 5 year CD. Now every year when one matures, I add a little more principal (to account for increased living expenses), and roll everything back in for another 5 years. Minimal thought and effort, no risk, much higher return than savings, fairly liquid (accessible) in an emergency, and great peace of mind. Plus it ensures I don't blow the money on something else, and that I have something to fall back on if all my other investments completely tanked, or I had massive medical bills, or lost my job, etc.",
"title": ""
}
] |
[
{
"docid": "7edfda479cd3187bb936a5557781d157",
"text": "I think it's great idea. Many large brokerages give customers access to a pretty sizable list of zero commission, zero load funds. In this list of funds will certainly be an S&P 500 index. So you can open your account for free, deposit your $1,000 for free and invest it in an S&P index for no cost. You'll pay a very negligible amount in annual expense fees and you'll owe taxes on your gain if you have to use the money. I don't follow the school of thought that all investment money should be in retirement account jail. But I think if you have your spending under control, you have your other finances in order and just want to place money somewhere, you're on the right track with this idea.",
"title": ""
},
{
"docid": "0f61c2688a2b82bdbad6909bab943faf",
"text": "\"Yes, definitely. Many municipalities and local governments issue bonds to fund various projects (schools, hospitals, infrastructure, etc). You can buy these bonds and in that way invest in these things. In the US these kinds of bonds are tax-free, i.e.: the income they provide is not taxed (by the US government, may be taxed by your State, check local tax laws). There are also dedicated mutual funds that that is all they invest in, if you don't want to deal with picking individual bonds. As to mom-and-pop stores - that would not be as easy, as mom-and-pop stores are by definition family owned and you can invest in them only if you are personally acquainted with them. Instead, you can invest in small regional/local chains, that while not being mom-and-pop, still small enough to be considered \"\"local\"\", but are publicly traded so that you can easily invest in them. You'll have to look for these. You can also use social lending platforms, like Lending Club, which I reviewed on my blog, or others, where you can participate in a lending pool to other people. You can invest in a credit union by opening an account there. Credit unions are owned by their account holders.\"",
"title": ""
},
{
"docid": "bec55c44ea141f5e27b7fa29ede776dd",
"text": "A questoin that I deal with almost every day. Like most investments it comes down to.....What is the purpose for this money? If it is truly a rainy day savings account that you may need in the short term, then fixed income investments like savings accounts, GIC's, Bonds, Bond funds and Fixed Income ETF's are ideal as they are taxed very inefficiently outside of any registered plan (therefore tax free in here). However if you have a plan in place that has all your short term needs covered elsewhere, I believe this is the place that you should be the most aggressive in your overall portfolio. If that mining stock goes up by 1000% wouldn't it be nice to put all of that gain in your pocket?",
"title": ""
},
{
"docid": "bdcbdebfa75cc61181f0c0a5d5767a76",
"text": "I think small sums invested regularly over long-term can do good for you, things to consider: I would go with an index fund and contribute there there regularly.",
"title": ""
},
{
"docid": "a9a364385b7cd1efc9c1bbe8b0eb5ff3",
"text": "I recommend you two things: I like these investments because they are not high risk. I hope this helps.",
"title": ""
},
{
"docid": "2c367ceba9490ae54dce5a02b9fc2171",
"text": "\"You're talking about money in a savings account, and avoiding the risks posed by an ongoing crisis, and avoiding risk. If you are risk-averse, and likely to need your money in the short term, you should not put your money in the stock market, even in \"\"safe\"\" stocks like P&G/Coca-Cola/etc. Even these safe stocks are at risk of wild price swings in the short- to intermediate-term, especially in the event of international crises such as major European debt defaults and the like. These stocks are suitable for long-term growth objectives, but they are not as a replacement for a savings account. Coca-Cola lost a third of its value between 2007 and 2009. (It's recovered, and is currently doing better than ever.) P&G went from $74/share to $46/share. (It's partially recovered and back at $63). On the other hand, these stocks may indeed be suitable as long-term investments to protect you against local currency inflation. And yes, they even pay dividends. If you're after this investment, a good option is probably a sector-specific exchange-traded fund, such as a consumer-staples ETF. It will likely be more diversified and safer than anything you could come up with using a list of individual stocks. You can also investigate recommendations that show up when you search for a \"\"defensive ETF\"\". If you do not wish to buy the ETF directly, you can also look at listings of the ETF's holdings. Read the prospectus for an idea of the risks associated with these funds. You can buy these funds with any brokerage that gives you access to US stock exchanges.\"",
"title": ""
},
{
"docid": "9ae3c180c24bbb830bac3a984e41a824",
"text": "Not really reasonable because you can't hold a gift card in your IRA, but clever idea none the less. I'm sure a few smaller investors would take advantage of that in a taxable account if it was remotely possible.",
"title": ""
},
{
"docid": "a6a908e79622930b75bd84c3ed3768c8",
"text": "Peer to peer lending such as Kiva, Lending Club, Funding Circle(small business), SoFi(student loans), Prosper, and various other services provide you with access to the 'basic form' of investing you described in your question. Other funds: You may find the documentary '97% Owned' fascinating as it provides an overview of the monetary system of England, with parallels to US, showing only 3% of money supply is used in exchange of goods and services, 97% is engaged in some form of speculation. If speculative activities are of concern, you may need to denounce many forms of currency. Lastly, be careful of taking the term addiction too lightly and deeming something unethical too quickly. You may be surprised to learn there are many people like yourself working at 'unethical' companies changing them within.",
"title": ""
},
{
"docid": "328af1fc9fc26ca75a554bcdcf4e1973",
"text": "Compound interest. Next time you buy a 100$ toy realize that if you save it - in x years that 100$ you saved and invested could potentially be more than 100$ where as most likely whatever you're buying will be worth much less.",
"title": ""
},
{
"docid": "992d568e9fb89ec12d5ec9d42554e089",
"text": "What is your investing goal? And what do you mean by investing? Do you necessarily mean investing in the stock market or are you just looking to grow your money? Also, will you be able to add to that amount on a regular basis going forward? If you are just looking for a way to get $100 into the stock market, your best option may be DRIP investing. (DRIP stands for Dividend Re-Investment Plan.) The idea is that you buy shares in a company (typically directly from the company) and then the money from the dividends are automatically used to buy additional fractional shares. Most DRIP plans also allow you to invest additional on a monthly basis (even fractional shares). The advantages of this approach for you is that many DRIP plans have small upfront requirements. I just looked up Coca-cola's and they have a $500 minimum, but they will reduce the requirement to $50 if you continue investing $50/month. The fees for DRIP plans also generally fairly small which is going to be important to you as if you take a traditional broker approach too large a percentage of your money will be going to commissions. Other stock DRIP plans may have lower monthly requirements, but don't make your decision on which stock to buy based on who has the lowest minimum: you only want a stock that is going to grow in value. They primary disadvantages of this approach is that you will be investing in a only a single stock (I don't believe that can get started with a mutual fund or ETF with $100), you will be fairly committed to that stock, and you will be taking a long term investing approach. The Motley Fool investing website also has some information on DRIP plans : http://www.fool.com/DRIPPort/HowToInvestDRIPs.htm . It's a fairly old article, but I imagine that many of the links still work and the principles still apply If you are looking for a more medium term or balanced investment, I would advise just opening an online savings account. If you can grow that to $500 or $1,000 you will have more options available to you. Even though savings accounts don't pay significant interest right now, they can still help you grow your money by helping you segregate your money and make regular deposits into savings.",
"title": ""
},
{
"docid": "68c2ed7fd4fb4f18c56d58438d284b64",
"text": "Investing in the stock market early is a good thing. However, it does have a learning curve, and that curve can, and eventually will, cost you. One basic rule in investing is that risk and reward are proportional. The greater the reward, the higher the risk that you either (a) won't get the reward, or (b) lose your money instead. Given that, don't invest money you can't afford to lose (you mentioned you're on a student budget). If you want to start with short but sercure investments, try finding a high-interest savings account or CD. For example, the bank I use has an offer where the first $500 in your account gets ~6% interest - certainly not bad if you only put $500 in the account. Unfortunately, most banks are offering a pittance for savings rates or CDs. If you're willing to take more risk, you could certainly put money into the stock market. Before you do, I would recommend spending some time learning about how the stock market works, it's flows and ebbs, and how stock valuations work. Don't buy a stock because you hear about it a lot; understand why that stock is being valued as such. Also consider buying index funds (such as SPY) which is like a stock but tracks an entire index. That way if a specific company suddenly drops, you won't be nearly as affected. On the flip side, if only 1 company goes up, but the market goes down, you'll miss out. But consider the odds of having picked that 1 company.",
"title": ""
},
{
"docid": "3b0134576ad94f597841f155d16001d1",
"text": "Aside from what everyone else has said about your money (saving, investing, etc.), I'd like to comment on what else you could spend it on: Spend it all on small/stupid things that, while stupid, would make me happier. For example take taxis more often, eat often in nice restaurants, buy designer clothes, etc. I'll be young only one time. You could also put the money towards something more... productive? Like a home project. Convert a room in your living space into an office or a theater-like room. Install hardwood floors yourself. Renovate a bathroom. Plant a garden of things you would enjoy eating later. Something that you would enjoy having or doing and can look back at and be proud of putting your money towards something that you accomplished.",
"title": ""
},
{
"docid": "2e963a985a9bfcb61d6590bd0e46d14d",
"text": "Try something like this: http://www.halifax.co.uk/sharedealing/our-accounts/fantasy-trader/ Virtual or fantasy trading is a great way to immerse yourself in that world and not lose your money whilst you make basic mistakes. Once real money is involved, there are some online platforms that are cheaper for lower amount investing than others. This article is a good, recent starting point for you: http://www.thisismoney.co.uk/money/diyinvesting/article-1718291/Pick-best-cheapest-investment-Isa-platform.html Best of luck in the investment casino! (And only risk money you can afford to lose - as with any form of investment, gambling, etc)",
"title": ""
},
{
"docid": "301bfdde2a9a2b9e9e1161c2eb7aba16",
"text": "You can't both enforce saving and have access to the money -- from what you say, it's clear that if you can access the money you will spend it. Can you find an account that allows one withdrawal every six months but no more, which should help to cut down on the impulse buys but still let you get at your money in an emergency?",
"title": ""
},
{
"docid": "9a837dc409208f2fa5f1fa6cf016495b",
"text": "\"I worked for a company a few years back that insisted all of us were \"\"non-supervised exempt technical workers,\"\" and they wanted 45 hours out of each person. No matter to them that that was a 12.5% cut in hourly pay. Unfortunately, they did no research and didn't bother to actually apply for any exemptions. One of the analysts got sick of it, found another job, then turned over his timecards to the labor department. Said company had to write him a check for $10k, as well as write smaller checks for every other person working there.\"",
"title": ""
}
] |
fiqa
|
d1665db18a4670bdef8ac399b3c9d0ed
|
Where can I find a company's earnings history for free?
|
[
{
"docid": "a931863acc83ad4edff1752ec43df94f",
"text": "www.earnings.com is helpful thinkorswim's thinkDesktop platform has a lot of earnings information tied with flags on their charts they are free.",
"title": ""
},
{
"docid": "69f9d5693b4f56f1267dc8b9b370a998",
"text": "Regulators? SEC, in the US. Its public records for public companies.",
"title": ""
},
{
"docid": "82c2ef3a0f37dfd65929f13ca4d90f18",
"text": "I was going to comment above, but I must have 50 reputation to comment. This is a question that vexes me, and I've given it some thought in the past. Morningstar is a good choice for simple, well-organized financial histories. It has more info available for free than some may realize. Enter the ticker symbol, and then click either the Financials or the Key Ratios tab, and you will get 5-10 years of some key financial stats. (A premium subscription is $185 per year, which is not too outrageous.) The American Association of Individual Investors (AAII) provides some good histories, and a screener, for a $29 annual fee. Zacks allows you to chart a metric like EPS going back a long ways, and so you can then click the chart in order to get the specific number. That is certainly easier than sorting through financial reports from the SEC. (A message just popped up to say that I'm not allowed to provide more than 2 links, so my contribution to this topic will end here. You can do a search to find the Zacks website. I love StackExchange and usually consult it for coding advice. It just happens to be an odd coincidence that this is my first answer. I might even have added that aside in a comment, but again, I can't comment as of yet.) It's problem, however, that the universe of free financial information is a graveyard of good resources that no longer exist. It seems that eventually everyone who provides this information wants to cash in on it. littleadv, above, says that someone should be paid to organize all this information. However, think that some basic financial information, organized like normal data (and, hey, this is not rocket science, but Excel 101) should be readily available for free. Maybe this is a project that needs to happen. With a mission statement of not selling people out later on. The closest thing out there may be Quandl (can't link; do a search), which provides a lot of charts for free, and provides a beautiful and flexible API. But its core US fundamental data, provided by Sharadar, costs $150 per quarter. So, not even a basic EPS chart is available there for free. With all of the power that corporations have over our society, I think they could be tabulating this information for us, rather than providing it to us in a data-dumb format that is the equivalent of printing a SQL database as a PDF! A company that is worth hundreds of billions on the stock market, and it can't be bothered to provide us with a basic Excel chart that summarizes its own historical earnings? Or, with all that the government does to try to help us understand all of these investments, they cannot simply tabulate some basic financial information for us? This stuff matters a great deal to our lives, and I think that much of it could and should be available, for free, to all of us, rather than mainly to financial professionals and those creating glossy annual reports. So, I disagree that yet another entity needs to be making money off providing the BASIC transparency about something as simple as historical earnings. Thank you for indulging that tangent. I know that SE prides itself on focused answers. A wonderful resource that I greatly appreciate.",
"title": ""
}
] |
[
{
"docid": "668cecf9dd78bc8eeb8ac981a1655342",
"text": "Take a look at http://en.wikipedia.org/wiki/Comparison_of_accounting_software, in particular the rows with a market focus of 'personal'. This is probably one of the more complete lists available, and shows if they are web-based (like Mint) or standalone (like Quicken or Microsoft Money).",
"title": ""
},
{
"docid": "06b31c6a2e973cc2679cd67547f3934c",
"text": "I don't know of any free API's for these data, but I'll provide what information I can. Compiling all of this information from the EDGAR system and exposing an interface to it requires a fair amount of work and maintenance, so it's usually market data companies that have the motivation and resources to provide such interfaces. I know of a few options that may or may not be close to what you're looking for. The SEC provides FTP access to the EDGAR system. You could download and parse the text files they provide. Yahoo Finance provides summary files of financial statements (e.g., GOOG) as well as links to the full statements in the EDGAR system. Once again, parsing may be your only option for these data. Xignite, a proprietary market data provider, provides a financial statement API. If you need these data for a commercial application, you could contact them and work something out. (Frankly, if you need these data for a commercial application, you're probably better off paying for the data) The Center for Research into Security Prices provides data from financial statements. I believe it's also exposed through several of their API's. As with most financial data, CRSP is sort of a gold standard, although I haven't personally used their API to fetch data from financial statements, so I can't speak for it specifically. This answer on StackOverflow mentions the quantmod R package and mergent. I can't vouch for either of those options personally. Unfortunately, you'll probably have to do some parsing unless you can find a paid data provider that's already compiled this information in a machine-readable format.",
"title": ""
},
{
"docid": "2f06e5113e47302d55798c67dc6474c7",
"text": "I would look on http://seekingalpha.com/currents/earnings. You can also get copies of the conference calls for each company you are looking at. What you referred to is the conference call. The people who usually ask questions are professional analysts. I would recommend getting the transcript as it is easier to highlight and keep records of. I hope that helps",
"title": ""
},
{
"docid": "125865bceb315212e78e50f6a3ccd6f5",
"text": "The cause of incomplete/inaccurate financial data's appearing on free sites is that it is both complicated and expensive to obtain and parse these data. Even within a single country, different pieces of financial data are handled by different authorities. In the US, for example, there is one generally recognized authority for stock prices and volumes (CQS), but a completely different authority for corporate earnings data (SEC). For futures and options data the only authority is each individual exchange. Each of these sources might have a vastly different interface to their data; some may have websites, others may have FTPs, others may have TCP datastreams to which you must subscribe, etc. Now throw in the rest of the world and all their exchanges and regulatory agencies, and you can see how it's a difficult job to gather all this information, parse it on a daily (or more frequent) basis, and check it all for errors. There are some companies (e.g. Bloomberg) whose entire business model is to do the above. They spend tens of millions of dollars per year to support the infrastructure and manpower required to keep such a complex system working, and they charge their consumers a pretty penny in return. Do Google/Yahoo pay for Bloomberg data access just to display information that we then consume for free? Maybe. Maybe they pay for some less expensive reduced data set. Or a data set that is less rigorously checked for errors. Even if they pay for the best data available, there's no guarantee that a company's last earnings report didn't have a glitch in it, or that Bloomberg's latest download from the Canadian Agency for Corporate Dividends and Moose Census-Taking didn't get cut off in the middle, or that the folks at Yahoo built a robust system that can handle a particular file's not arriving on time. Bloomberg has dozens or even hundreds of employees focused on just this one task; Yahoo probably has 5. Moral: If you really need the best available data you must go to the source(s), or you must pay a provider to whom you can then complain when something is wrong. With free data you get what you pay for.",
"title": ""
},
{
"docid": "c4358d19edb2a53d219d633e838d8e96",
"text": "There are multiple places where you can see this. Company house website On any financial news website, if you have access e.g. TESCO on FT On any 3rd party website which supply information on companies e.g. TESCO on Companycheck An observation though, FT lists down more shareholders for me than Companycheck as I pay for FT.",
"title": ""
},
{
"docid": "9a7afcb4763f4edcd1270b845dbbf94d",
"text": "In all fairness, I have turned opportunities from their site into my own personal cash machine, so this is quid pro quo to me. It is my personal rolodex that self updates. I perceive value in the site. Where else can I click a few buttons and find out who I know or have connections to at a given company for business purposes? For free? I'm trying to reconcile this with why I don't mind them yet I dislike facebook so much.",
"title": ""
},
{
"docid": "902596c59a47fa18569e3dfee25ff68c",
"text": "Depends on the exchange, and it's usually not going to be free. I use IB's API, and I've heard good things about IQFeed. You can get some free book data from Bats, but again you probably won't see your own transactions go by. http://batstrading.com/market_data/",
"title": ""
},
{
"docid": "dc2b1071dc0a591bb00427ba3c3f5688",
"text": "If it is Texas company, you can try doing a taxable entity search on the Texas Comptroller website.",
"title": ""
},
{
"docid": "cff3f36f2120e361ca04e52d14060b0a",
"text": "Mint.com does a pretty good job at this, for a free service, but it's mostly for personal finance. It looks at all of your transactions and tries to categorize them, and also allows you to create your own categories and filters. For example, when I started using it, it imported the last three months of my transactions and detected all of my 'coffee house' transactions. This is how I learned that I was spending about $90 a month going to Starbucks, rather than the $30 I had estimated. I know it's not a 'system' like an accounting outfit might use, but most accounting offices I've worked with have had their own home-brewed system.",
"title": ""
},
{
"docid": "f88af7a8167c5d60b1d44913022efb1f",
"text": "Ya, that's a lot of data - especially considering your relative lack of experience and the likely fact that you have no idea what to do with what you're given. How do you even know you need minute or tick-based bid-ask data? You can get a lot more than OHLC/V/Split/Dividend. You can get: * Book Value; * Dividend information (Amount, yield, ex date, pay date); * EBITDA; * EPS (current AND estimates); * Price/sales ratio; * Price/book value; * Price/earnings ratio; * PEG ratio; * Short ratio; * Market cap. Among other things, all for free.",
"title": ""
},
{
"docid": "47d2401e8c9dcd835a24ea517a73bda6",
"text": "I've seen this tool. I'm just having a hard time finding where I can just get a list of all the companies. For example, you can get up to 100 results at a time, if I just search latest filings for 10-K. This isn't really an efficient way to go about what I want.",
"title": ""
},
{
"docid": "7a4c992ed6dc741496581a54d8651f19",
"text": "\"http://annualcreditreport.com gives you free access to your 3 credit bureau records. (Annual, not \"\"free\"\". The \"\"free\"\" guys will try to sell you something.)\"",
"title": ""
},
{
"docid": "73ba7fddc5657098f06a536c734a6205",
"text": "Yes, past option prices are available for many options, but as far as I know not for free. You can get them from, for example, OptionMetrics. Probably there are other providers as well, which may be cheaper for an individual or small institution. OptionMetrics data comes from the National Best Bid and Offer. Probably there are some over-the-counter options that are not included here, but for someone asking this question, OptionMetrics will most likely have the option you are interested in.",
"title": ""
},
{
"docid": "b81c09b50251d6d8eced07aaaa835e6e",
"text": "Well, kind of XD. I usually just look through Business Week for the ADRs that are on the OTC market. I don't do anything major, but why I love them is that they have a greater reach than just ADRs on the NYSE or NASDAQ. Like for instance, if I wanted to own Thai or European stocks, many of the larger, more reputable firms are listed on the OTC market. Having said that, most other sites don't have earnings reports laid out for you. Business Week does. The only fancy thing I am interested in are options and options on futures, and Bar Chart is good for the latter.",
"title": ""
},
{
"docid": "dc791ff7f4a2e648915913f2f2bc62ae",
"text": "Yup. What I wanted to know was where they are pulling it up from. Have casually used Google finance for personal investments, but they suck at corp actions. Not sure if they provide free APIs, but that would probably suck too! :D",
"title": ""
}
] |
fiqa
|
07bce1f2ae698230962d0da011cc3a6a
|
Do I need to own all the funds my target-date funds owns to mimic it?
|
[
{
"docid": "96d0479db259b1d1bbc57b467acf8cf2",
"text": "\"If you read Joel Greenblatt's The Little Book That Beats the Market, he says: Owning two stocks eliminates 46% of the non market risk of owning just one stock. This risk is reduced by 72% with 4 stocks, by 81% with 8 stocks, by 93% with 16 stocks, by 96% with 32 stocks, and by 99% with 500 stocks. Conclusion: After purchasing 6-8 stocks, benefits of adding stocks to decrease risk are small. Overall market risk won't be eliminated merely by adding more stocks. And that's just specific stocks. So you're very right that allocating a 1% share to a specific type of fund is not going to offset your other funds by much. You are correct that you can emulate the lifecycle fund by simply buying all the underlying funds, but there are two caveats: Generally, these funds are supposed to be cheaper than buying the separate funds individually. Check over your math and make sure everything is in order. Call the fund manager and tell him about your findings and see what they have to say. If you are going to emulate the lifecycle fund, be sure to stay on top of rebalancing. One advantage of buying the actual fund is that the portfolio distributions are managed for you, so if you're going to buy separate ETFs, make sure you're rebalancing. As for whether you need all those funds, my answer is a definite no. Consider Mark Cuban's blog post Wall Street's new lie to Main Street - Asset Allocation. Although there are some highly questionable points in the article, one portion is indisputably clear: Let me translate this all for you. “I want you to invest 5pct in cash and the rest in 10 different funds about which you know absolutely nothing. I want you to make this investment knowing that even if there were 128 hours in a day and you had a year long vacation, you could not possibly begin to understand all of these products. In fact, I don’t understand them either, but because I know it sounds good and everyone is making the same kind of recommendations, we all can pretend we are smart and going to make a lot of money. Until we don’t\"\" Standard theory says that you want to invest in low-cost funds (like those provided by Vanguard), and you want to have enough variety to protect against risk. Although I can't give a specific allocation recommendation because I don't know your personal circumstances, you should ideally have some in US Equities, US Fixed Income, International Equities, Commodities, of varying sizes to have adequate diversification \"\"as defined by theory.\"\" You can either do your own research to establish a distribution, or speak to an investment advisor to get help on what your target allocation should be.\"",
"title": ""
},
{
"docid": "a68a6190f8f1909ef9cf515c36ca5e0d",
"text": "\"The goal of the single-fund with a retirement date is that they do the rebalancing for you. They have some set of magic ratios (specific to each fund) that go something like this: Note: I completely made up those numbers and asset mix. When you invest in the \"\"Mutual-Fund Super Account 2025 fund\"\" you get the benefit that in 2015 (10 years until retirement) they automatically change your asset mix and when you hit 2025, they do it again. You can replace the functionality by being on top of your rebalancing. That being said, I don't think you need to exactly match the fund choices they provide, just research asset allocation strategies and remember to adjust them as you get closer to retirement.\"",
"title": ""
},
{
"docid": "52a68e315eefe0325f56476761a2d3ea",
"text": "Over time, fees are a killer. The $65k is a lot of money, of course, but I'd like to know the fees involved. Are you doubling from 1 to 2%? if so, I'd rethink this. Diversification adds value, I agree, but 2%/yr? A very low cost S&P fund will be about .10%, others may go a bit higher. There's little magic in creating the target allocation, no two companies are going to be exactly the same, just in the general ballpark. I'd encourage you to get an idea of what makes sense, and go DIY. I agree 2% slices of some sectors don't add much, don't get carried away with this.",
"title": ""
}
] |
[
{
"docid": "78324133f5ee24f7ae0dc6de65f65c25",
"text": "I strongly suggest you go to www.investor.gov as it has excellent information regarding these types of questions. A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates. When you buy shares of a mutual fund you're buying it at NAV, or net asset value. The NAV is the value of the fund’s assets minus its liabilities. SEC rules require funds to calculate the NAV at least once daily. Different funds may own thousands of different stocks. In order to calculate the NAV, the fund company must value every security it owns. Since each security's valuation is changing throughout the day it's difficult to determine the valuation of the mutual fund except for when the market is closed. Once the market has closed (4pm eastern) and securities are no longer trading, the company must get accurate valuations for every security and perform the valuation calculations and distribute the results to the pricing vendors. This has to be done by 6pm eastern. This is a difficult and, more importantly, a time consuming process to get it done right once per day. Having worked for several fund companies I can tell you there are many days where companies are getting this done at the very last minute. When you place a buy or sell order for a mutual fund it doesn't matter what time you placed it as long as you entered it before 4pm ET. Cutoff times may be earlier depending on who you're placing the order with. If companies had to price their funds more frequently, they would undoubtedly raise their fees.",
"title": ""
},
{
"docid": "f87db8d477d31f9aafafbeeae7a91cd3",
"text": "\"One approach is to invest in \"\"allocation\"\" mutual funds that use various methods to vary their asset allocation. Some examples (these are not recommendations; just to show you what I am talking about): A good way to identify a useful allocation fund is to look at the \"\"R-squared\"\" (correlation) with indexes on Morningstar. If the allocation fund has a 90-plus R-squared with any index, it probably isn't doing a lot. If it's relatively uncorrelated, then the manager is not index-hugging, but is making decisions to give you different risks from the index. If you put 10% of your portfolio in a fund that varies allocation to stocks from 25% to 75%, then your allocation to stocks created by that 10% would be between 2.5% to 7.5% depending on the views of the fund manager. You can use that type of calculation to invest enough in allocation funds to allow your overall allocation to vary within a desired range, and then you could put the rest of your money in index funds or whatever you normally use. You can think of this as diversifying across investment discipline in addition to across asset class. Another approach is to simply rely on your already balanced portfolio and enjoy any downturns in stocks as an opportunity to rebalance and buy some stocks at a lower price. Then enjoy any run-up as an opportunity to rebalance and sell some stocks at a high price. The difficulty of course is going through with the rebalance. This is one advantage of all-in-one funds (target date, \"\"lifecycle,\"\" balanced, they have many names), they will always go through with the rebalance for you - and you can't \"\"see\"\" each bucket in order to get stressed about it. i.e. it's important to think of your portfolio as a whole, not look at the loss in the stocks portion. An all-in-one fund keeps you from seeing the stocks-by-themselves loss number, which is a good way to trick yourself into behaving sensibly. If you want to rebalance \"\"more aggressively\"\" then look at value averaging (search for \"\"value averaging\"\" on this site for example). A questionable approach is flat-out market-timing, where you try to get out and back in at the right times; a variation on this would be to buy put options at certain times; the problem is that it's just too hard. I think it makes more sense to buy an allocation fund that does this for you. If you do market time, you want to go in and out gradually, and value averaging is one way to do that.\"",
"title": ""
},
{
"docid": "830b49fbf6cee0a1daf7ab15d3d6d535",
"text": "I think we resolved this via comments above. Many finance authors are not fans of target date funds, as they have higher fees than you'd pay constructing the mix yourself, and they can't take into account your own risk tolerance. Not every 24 year old should have the same mix. That said - I suggest you give thought to the pre-tax / post tax (i.e. traditional vs Roth) mix. I recently wrote The 15% solution, which attempts to show how to minimize your lifetime taxes by using the split that's ideal for your situation.",
"title": ""
},
{
"docid": "d1015ffe029820bd6079017d96a071be",
"text": "Like an S&P 500 ETF? So you're getting in some cash inflow each day, cash outflows each day. And you have to buy and sell 500 different stocks, at the same time, in order for your total fund assets to match the S&P 500 index proportions, as much as possible. At any given time, the prices you get from the purchase/sale of stock is probably going to be somewhat different than the theoretical amounts you are supposed to get to match, so it's quite a tangle. This is my understanding of things. Some funds are simpler - a Dow 30 fund only has 30 stocks to balance out. Maybe that's easier, or maybe it's harder because one wonky trade makes a bigger difference? I'm not sure this is how it really operates. The closest I've gotten is a team that has submitted products for indexing, and attempted to develop funds from those indexes. Turns out finding the $25-50 million of initial investments isn't as easy as anyone would think.",
"title": ""
},
{
"docid": "80923207a6f183be4e8cc88ae83b06f9",
"text": "Here is a simple example of how daily leverage fails, when applied over periods longer than a day. It is specifically adjusted to be more extreme than the actual market so you can see the effects more readily. You buy a daily leveraged fund and the index is at 1000. Suddenly the market goes crazy, and goes up to 2000 - a 100% gain! Because you have a 2x ETF, you will find your return to be somewhere near 200% (if the ETF did its job). Then tomorrow it goes back to normal and falls back down to 1000. This is a fall of 50%. If your ETF did its job, you should find your loss is somewhere near twice that: 100%. You have wiped out all your money. Forever. You lose. :) The stock market does not, in practice, make jumps that huge in a single day. But it does go up and down, not just up, and if you're doing a daily leveraged ETF, your money will be gradually eroded. It doesn't matter whether it's 2x leveraged or 8x leveraged or inverse (-1x) or anything else. Do the math, get some historical data, run some simulations. You're right that it is possible to beat the market using a 2x ETF, in the short run. But the longer you hold the stock, the more ups and downs you experience along the way, and the more opportunity your money has to decay. If you really want to double your exposure to the market over the intermediate term, borrow the money yourself. This is why they invented the margin account: Your broker will essentially give you a loan using your existing portfolio as collateral. You can then invest the borrowed money, increasing your exposure even more. Alternatively, if you have existing assets like, say, a house, you can take out a mortgage on it and invest the proceeds. (This isn't necessarily a good idea, but it's not really worse than a margin account; investing with borrowed money is investing with borrowed money, and you might get a better interest rate. Actually, a lot of rich people who could pay off their mortgages don't, and invest the money instead, and keep the tax deduction for mortgage interest. But I digress.) Remember that assets shrink; liabilities (loans) never shrink. If you really want to double your return over the long term, invest twice as much money.",
"title": ""
},
{
"docid": "582d3445c75e76dd671a28f85595a0fc",
"text": "It is true that this is possible, however, it's very remote in the case of the large and reputable fund companies such as Vanguard. FDIC insurance protects against precisely this for bank accounts, but mutual funds and ETFs do not have an equivalent to FDIC insurance. One thing that does help you in the case of a mutual fund or ETF is that you indirectly (through the fund) own actual assets. In a cash account at a bank, you have a promise from the bank to pay, and then the bank can go off and use your money to make loans. You don't in any sense own the bank's loans. With a fund, the fund company cannot (legally) take your money out of the fund, except to pay the expense ratio. They have to use your money to buy stocks, bonds, or whatever the fund invests in. Those assets are then owned by the fund. Legally, a mutual fund is a special kind of company defined in the Investment Company Act of 1940, and is a separate company from the investment advisor (such as Vanguard): http://www.sec.gov/answers/mfinvco.htm Funds have their own boards, and in principle a fund board can even fire the company advising the fund, though this is not likely since boards aren't usually independent. (a quick google found this article for more, maybe someone can find a better one: http://www.marketwatch.com/story/mutual-fund-independent-board-rule-all-but-dead) If Vanguard goes under, the funds could continue to exist and get a new adviser, or could be liquidated with investors receiving whatever the assets are worth. Of course, all this legal stuff doesn't help you with outright fraud. If a fund's adviser says it bought the S&P 500, but really some guy bought himself a yacht, Madoff-style, then you have a problem. But a huge well-known ETF has auditors, tons of different employees, lots of brokerage and exchange traffic, etc. so to me at least it's tough to imagine a risk here. With a small fund company with just a few people - and there are lots of these! - then there's more risk, and you'd want to carefully look at what independent agent holds their assets, who their auditors are, and so forth. With regular mutual funds (not ETFs) there are more issues with diversifying across fund companies: With ETFs, there probably isn't much downside to diversifying since you could buy them all from one brokerage account. Maybe it even happens naturally if you pick the best ETFs you can find. Personally, I would just pick the best ETFs and not worry about advisor diversity. Update: maybe also deserving a mention are exchange-traded notes (ETNs). An ETN's legal structure is more like the bank account, minus the FDIC insurance of course. It's an IOU from the company that runs the ETN, where they promise to pay back the value of some index. There's no investment company as with a fund, and therefore you don't own a share of any actual assets. If the ETN's sponsor went bankrupt, you would indeed have a problem, much more so than if an ETF's sponsor went bankrupt.",
"title": ""
},
{
"docid": "cce033f385da61f67b0c492443451b1d",
"text": "\"It's easy for me to look at an IRA, no deposits or withdrawal in a year, and compare the return to some index. Once you start adding transactions, not so easy. Here's a method that answers your goal as closely as I can offer: SPY goes back to 1993. It's the most quoted EFT that replicates the S&P 500, and you specifically asked to compare how the investment would have gone if you were in such a fund. This is an important distinction, as I don't have to adjust for its .09% expense, as you would have been subject to it in this fund. Simply go to Yahoo, and start with the historical prices. Easy to do this on a spreadsheet. I'll assume you can find all your purchases inc dates & dollars invested. Look these up and treat those dollars as purchases of SPY. Once the list is done, go back and look up the dividends, issues quarterly, and on the dividend date, add the shares it would purchase based on that day's price. Of course, any withdrawals get accounted for the same way, take out the number of SPY shares it would have bought. Remember to include the commission on SPY, whatever your broker charges. If I've missed something, I'm sure we'll see someone point that out, I'd be happy to edit that in, to make this wiki-worthy. Edit - due to the nature of comments and the inability to edit, I'm adding this here. Perhaps I'm reading the question too pedantically, perhaps not. I'm reading it as \"\"if instead of doing whatever I did, I invested in an S&P index fund, how would I have performed?\"\" To measure one's return against a benchmark, the mechanics of the benchmarks calculation are not needed. In a comment I offer an example - if there were an ETF based on some type of black-box investing for which the investments were not disclosed at all, only day's end pricing, my answer above still applies exactly. The validity of such comparisons is a different question, but the fact that the formulation of the EFT doesn't come into play remains. In my comment below which I removed I hypothesized an ETF name, not intending it to come off as sarcastic. For the record, if one wishes to start JoesETF, I'm ok with it.\"",
"title": ""
},
{
"docid": "6241d19ae4f4a34d2000f940bf82e549",
"text": "The issue is the time frame. With a one year investment horizon the only way for a fund manager to be confident that they are not going to lose their shirt is to invest your money in ultra conservative low volatility investments. Otherwise a year like 2008 in the US stock market would break them. Note if you are willing to expand your payback time period to multiple years then you are essentially looking at an annuity and it's market loss rider. Of course those contacts are always structured such that the insurance company is extremely confident that they will be able to make more in the market than they are promising to pay back (multiple decade time horizons).",
"title": ""
},
{
"docid": "18ba65edf360c23887d0043f4696facb",
"text": "Now, if I'm not mistaken, tracking a value-weighted index is extremely easy - just buy the shares in the exact amount they are in the index and wait. Yes in theory. In practise this is difficult. Most funds that track S&P do it on sample basis. This is to maintain the fund size. Although I don't have / know the exact number ... if one wants to replicate the 500 stocks in the same %, one would need close to billion in fund size. As funds are not this large, there are various strategies adopted, including sampling of companies [i.e. don't buy all]; select a set of companies that mimic the S&P behaviour, etc. All these strategies result in tracking errors. There are algorithms to reduce this. The only time you would need to rebalance your holdings is when there is a change in the index, i.e. a company is dropped and a new one is added, right? So essentially rebalance is done to; If so, why do passive ETFs require frequent rebalancing and generally lose to their benchmark index? lets take an Index with just 3 companies, with below price. The total Market cap is 1000 The Minimum required to mimic this index is 200 or Multiples of 200. If so you are fine. More Often, funds can't be this large. For example approx 100 funds track the S&P Index. Together they hold around 8-10% of Market Cap. Few large funds like Vangaurd, etc may hold around 2%. But most of the 100+ S&P funds hold something in 0.1 to 0.5 range. So lets say a fund only has 100. To maintain same proportion it has to buy shares in fraction. But it can only buy shares in whole numbers. This would then force the fund manager to allocate out of proportion, some may remain cash, etc. As you can see below illustrative, there is a tracking error. The fund is not truly able to mimic the index. Now lets say after 1st April, the share price moved, now this would mean more tracking error if no action is taken [block 2] ... and less tracking error if one share of company B is sold and one share of company C is purchased. Again the above is a very simplified view. Tracking error computation is involved mathematics. Now that we have the basic concepts, more often funds tracking S&P; Thus they need to rebalance.",
"title": ""
},
{
"docid": "745af972c291ab920e3b2690a6d0ef9d",
"text": "Yes, it depends on the fund it's trying to mirror. The ETF for the S&P that's best known (in my opinion) is SPY and you see the breakdown of its holdings. Clearly, it's not an equal weighted index.",
"title": ""
},
{
"docid": "e710be66cacaa43a6b7e4b7df6033b02",
"text": "Yes, each of Vanguard's mutual funds looks only at its own shares when deciding to upgrade/downgrade the shares to/from Admiral status. To the best of my knowledge, if you hold a fund in an IRA as well as a separate investment, the shares are not totaled in deciding whether or not the shares are accorded Admiral shares status; each account is considered separately. Also, for many funds, the minimum investment value is not $10K but is much larger (used to be $100K a long time ago, but recently the rules have been relaxed somewhat).",
"title": ""
},
{
"docid": "aa0ef326df4465ff87ce2aea2d17493a",
"text": "What is your time horizon? Over long horizons, you absolutely want to minimise the expense ratio – a seemingly puny 2% fee p.a. can cost you a third of your savings over 35 years. Over short horizons, the cost of trading in and trading out might matter more. A mutual fund might be front-loaded, i.e. charge a fixed initial percentage when you first purchase it. ETFs, traded daily on an exchange just like a stock, don't have that. What you'll pay there is the broker commission, and the bid-ask spread (and possibly any premium/discount the ETF has vis-a-vis the underlying asset value). Another thing to keep in mind is tracking error: how closely does the fond mirror the underlying index it attempts to track? More often than not it works against you. However, not sure there is a systematic difference between ETFs and funds there. Size and age of a fund can matter, indeed - I've had new and smallish ETFs that didn't take off close down, so I had to sell and re-allocate the money. Two more minor aspects: Synthetic ETFs and lending to short sellers. 1) Some ETFs are synthetic, that is, they don't buy all the underlying shares replicating the index, actually owning the shares. Instead, they put the money in the bank and enter a swap with a counter-party, typically an investment bank, that promises to pay them the equivalent return of holding that share portfolio. In this case, you have (implicit) credit exposure to that counter-party - if the index performs well, and they don't pay up, well, tough luck. The ETF was relying on that swap, never really held the shares comprising the index, and won't necessarily cough up the difference. 2) In a similar vein, some (non-synthetic) ETFs hold the shares, but then lend them out to short sellers, earning extra money. This will increase the profit of the ETF provider, and potentially decrease your expense ratio (if they pass some of the profit on, or charge lower fees). So, that's a good thing. In case of an operational screw up, or if the short seller can't fulfil their obligations to return the shares, there is a risk of a loss. These two considerations are not really a factor in normal times (except in improving ETF expense ratios), but during the 2009 meltdown they were floated as things to consider. Mutual funds and ETFs re-invest or pay out dividends. For a given mutual fund, you might be able to choose, while ETFs typically are of one type or the other. Not sure how tax treatment differs there, though, sorry (not something I have to deal with in my jurisdiction). As a rule of thumb though, as alex vieux says, for a popular index, ETFs will be cheaper over the long term. Very low cost mutual funds, such as Vanguard, might be competitive though.",
"title": ""
},
{
"docid": "5e1a32fd89b6eb8df2bf94f74df763da",
"text": "\"First of all, it's great you're now taking full advantage of your employer match – i.e. free money. Next, on the question of the use of a life cycle / target date fund as a \"\"hedge\"\": Life cycle funds were introduced for hands-off, one-stop-shopping investors who don't like a hassle or don't understand. Such funds are gaining in popularity: employers can use them as a default choice for automatic enrollment, which results in more participation in retirement savings plans than if employees had to opt-in. I think life cycle funds are a good innovation for that reason. But, the added service and convenience typically comes with higher fees. If you are going to be hands-off, make sure you're cost-conscious: Fees can devastate a portfolio's performance. In your case, it sounds like you are willing to do some work for your portfolio. If you are confident that you've chosen a good equity glide path – that is, the initial and final stock/bond allocations and the rebalancing plan to get from one to the other – then you're not going to benefit much by having a life cycle fund in your portfolio duplicating your own effort with inferior components. (I assume you are selecting great low-cost, liquid index funds for your own strategy!) Life cycle are neat, but replicating them isn't rocket science. However, I see a few cases in which life cycle funds may still be useful even if one has made a decision to be more involved in portfolio construction: Similar to your case: You have a company savings plan that you're taking advantage of because of a matching contribution. Chances are your company plan doesn't offer a wide variety of funds. Since a life cycle fund is available, it can be a good choice for that account. But make sure fees aren't out of hand. If much lower-cost equity and bond funds are available, consider them instead. Let's say you had another smaller account that you were unable to consolidate into your main account. (e.g. a Traditional IRA vs. your Roth, and you didn't necessarily want to convert it.) Even if that account had access to a wide variety of funds, it still might not be worth the added hassle or trading costs of owning and rebalancing multiple funds inside the smaller account. There, perhaps, the life cycle fund can help you out, while you use your own strategy in your main account. Finally, let's assume you had a single main account and you buy partially into the idea of a life cycle fund and you find a great one with low fees. Except: you want a bit of something else in your portfolio not provided by the life cycle fund, e.g. some more emerging markets, international, or commodity stock exposure. (Is this one reason you're doing it yourself?) In that case, where the life cycle fund doesn't quite have everything you want, you could still use it for the bulk of the portfolio (e.g. 85-95%) and then select one or two specific additional ETFs to complement it. Just make sure you factor in those additional components into the overall equity weighting and adjust your life cycle fund choice accordingly (e.g. perhaps go more conservative in the life cycle, to compensate.) I hope that helps! Additional References:\"",
"title": ""
},
{
"docid": "f50a77edeff46066dd58bbd93707a0f4",
"text": "Here are the specific Vanguard index funds and ETF's I use to mimic Ray Dalio's all weather portfolio for my taxable investment savings. I invest into this with Vanguard personal investor and brokerage accounts. Here's a summary of the performance results from 2007 to today: 2007 is when the DBC commodity fund was created, so that's why my results are only tested back that far. I've tested the broader asset class as well and the results are similar, but I suggest doing that as well for yourself. I use portfoliovisualizer.com to backtest the results of my portfolio along with various asset classes, that's been tremendously useful. My opinionated advice would be to ignore the local investment advisor recommendations. Nobody will ever care more about your money than you, and their incentives are misaligned as Tony mentions in his book. Mutual funds were chosen over ETF's for the simplicity of auto-investment. Unfortunately I have to manually buy the ETF shares each month (DBC and GLD). I'm 29 and don't use this for retirement savings. My retirement is 100% VSMAX. I'll adjust this in 20 years or so to be more conservative. However, when I get close to age 45-50 I'm planning to shift into this allocation at a market high point. When I approach retirement, this is EXACTLY where I want to be. Let's say you had $2.7M in your retirement account on Oct 31, 2007 that was invested in 100% US Stocks. In Feb of 2009 your balance would be roughly $1.35M. If you wanted to retire in 2009 you most likely couldn't. If you had invested with this approach you're account would have dropped to $2.4M in Feb of 2009. Disclaimer: I'm not a financial planner or advisor, nor do I claim to be. I'm a software engineer and I've heavily researched this approach solely for my own benefit. I have absolutely no affiliation with any of the tools, organizations, or funds mentioned here and there's no possible way for me to profit or gain from this. I'm not recommending anyone use this, I'm merely providing an overview of how I choose to invest my own money. Take or leave it, that's up to you. The loss/gain incured from this is your responsibility, and I can't be held accountable.",
"title": ""
},
{
"docid": "0b13393accc83213c5973089554b85d3",
"text": "\"A budget that you both agree on is a great goal. X% to charity, y% to savings, $z a month to a reserve for house repairs, and so on. Your SO is likely to agree with this, especially if you say it like this: I know you're concerned that I might want to give too much to charity. Why don't we go through the numbers and work out a cap on what I can give away each year? Like, x% of our gross income or y% of our disposable income? Work out x and y in advance so you say real percentages in this \"\"meeting request\"\", but be prepared to actually end up at a different x and y later. Perhaps even suggest an x and y that are a little lower than you would really wish for. If your SO thinks you earn half what you really do, then mental math if you say 5% will lead to half what you want to donate, but don't worry about that at the moment. That could even work in your favour if you've already said you want to give $5000 (or $50,000) a year and mental math with the percentage leads your SO to $2500 (or $25,000), (s)he might think \"\"yes, if we have this meeting I can rein in that crazy generosity.\"\" Make sure your budget is complete. You don't want your SO worrying that if the furnace wears out or the roof needs to be replaced, the money won't be there because you gave it away. Show how these contingencies, and your retirement, will all be taken care of. Show how much you are setting aside to spend on vacations, and so on. That will make it clear that there is room to give to those who are not as fortunate as you. If your SO's motivations are only worry that there won't be money when it's needed, you will not only get permission to donate, you'll get a happier SO. (For those who don't know how this can happen, I knew a woman just like this. The only income she believed they had was her husband's pension. He had several overseas companies and significant royalty income, but she never accounted for that when talking of what they could afford. Her mental image of their income was perhaps a quarter of what it really was, leading to more than one fight about whether they could take a trip, or give a gift, that she thought was too extravagant. For her own happiness I wish he had gone through the budget with her in detail.)\"",
"title": ""
}
] |
fiqa
|
223e805f1a3509b1d2781572dad8d41d
|
Extended family investment or pay debt and save
|
[
{
"docid": "5757acae7e1624d29020368571f4543e",
"text": "I would suggest, both as an investor and as someone who has some experience with a family-run trust (not my own), that this is probably not something you should get involved with, unless the money is money you're not worried about - money that otherwise would turn into trips to the movies or something like that. If you're willing to treat it as such, then I'd say go for it. First off, this is not a short or medium term investment. This sort of thing will not be profitable right away, and it will take quite a few years to become profitable to the point that you could take money out of it - if ever. Your money will be effectively, if not actually, locked up for years, and be nearly entirely illiquid. Second, it's not necessarily a good investment even considering that. Real estate is something people tend to feel like it should be an amazing investment that just makes you money, and is better than risky things like the stock market; except it's really not. It's quite risky, vulnerable to things like the 2008 crash, but also to things like a local market being a bit down, or having several months with no renter. The amount your fund will have in it (at most $100x15/month) won't be enough to buy even one property for years ($1500/month means you're looking at what, 100-150 months before you have enough?), and as such won't have enough to buy multiple properties for even longer, which is where you reach some stability. Having a washing machine break down or a roof leak is a big deal when you only have one property to manage; having five or six properties spreads out the risk significantly. You won't get tax breaks from this, of course, and that's where the real issue is for you. You would be far better off putting your money in a Roth IRA (or a regular IRA, but based on your career choice and current income, I'd strongly consider a Roth). You'll get tax free growth, less risky than this fund AND probably faster growing - but regardless of both of those, tax free. That 15-25% that Uncle Sam is giving you back is a huge, huge deal, greater than any return a fund is going to give you (and if they promise that high, run far and fast). Finally, as someone who's watched a family trust work at managing itself - it's a huge, huge headache, and not something I'd recommend at least (unless it comes with money, in which case it's of course a different story). You won't agree on investments, inevitably, and you'll end up spending huge amounts of time trying to convince each other to go with your idea - and it will likely end up being fairly stagnant and conservative, because that's what everyone will be able to at least not object to. It might be something you all enjoy doing, in which case good luck - but definitely not my cup of tea.",
"title": ""
},
{
"docid": "b9e2e5af3b25ea0472a59dbe5a50c385",
"text": "Here's a little different perspective. I'm not going to talk about the quality of the investment, the expected return, or any of the other things you normally talk about when evaluating investments. This is about family, and the most important thing here is the relationships. What you need to do here is look at the different possible scenarios and figure out how each of these would make you feel. Only you can evaluate this. For example, here are some questions to ask yourself: I know how I would answer these questions, but that wouldn't help you any. But the advice I would give you is, assuming you have this money to lose, and are also investing elsewhere, evaluate this solely on the basis of the effect on your family relationships. The only other piece of advice I would give you is to knock out that student loan and car loan debt as fast as you possibly can. Minimize your investments until that debt is gone, so you can get rid of it even faster.",
"title": ""
},
{
"docid": "3983e3a420f7ce2847715700541fc85b",
"text": "It's a matter of opinion. As a general rule, my advice is to take charge of your own investments. Sending money to someone else to have them invest it, though it is a common practice, seems unwise to me. This particular fund seems especially risky to me, because there is no known portfolio. Normally, real estate investment trusts (REITs) have a specific portfolio of known properties, or at least a property strategy that you know going in. Simply handing money over to someone else with no known properties, or specific strategy is buying a pig in a poke.",
"title": ""
}
] |
[
{
"docid": "578ff589a1e623f1b93e026614a3c2e6",
"text": "Oh, don't expect us to take sides, we love both our parents the same! As to the pragmatic decision making - simple math. The disagreement is whether to pay off the HELOC or to invest into the mutual fund instead. Well, check the yield of the fund, compare to the costs of keeping the HELOC balance, and see which one makes more sense. Just compare the expected payments and gains for each of the scenarios and you'll get your answer.",
"title": ""
},
{
"docid": "7f4660e81b6cac0d44cedec2044272b9",
"text": "My recommendation would be to pay off your student loan debt as soon as possible. You mention that the difference between your student loan and the historical, long-term return on the stock market is one-half percent. The problem is, the 7% return that you are counting on from the stock market is not guaranteed. You might get 7% over the next few years, but you also might do much worse. The 6.4% interest that you will save by aggressively paying off your debt is guaranteed. You are concerned about the opportunity cost of paying your debt early. However, this cost is only temporary. By drawing out your debt payments, you have a long-term opportunity cost. By this, I mean that 4 years from now, you could still have 6 years of debt payments hanging over your head, or you could be debt free with all of your income available to save, spend, or invest as you see fit. In my opinion, prolonging debt just to try to come out 0.5% ahead is not worth the hassle or risk.",
"title": ""
},
{
"docid": "40e63eabd78c2e65995082762ec7900d",
"text": "\"There are a great number of financial obligations that should be considered more urgent than student loan debt. I'll go ahead and assume that the ones that can land people in jail aren't an issue (unpaid fines, back taxes, etc.). I cannot stress this enough, so I'll say it again: setting money aside for emergencies is so much more important than paying off student loans. I've seen people refer to saving as \"\"paying yourself\"\" if that helps justify it in your mind. My wife and I chose to aggressively pay down debt we had stupidly accrued during college, and I got completely blindsided by a layoff during the downturn. Guess what happened to all those credit cards we'd paid off and almost paid off? Guess what happened to my 401k? If all we had left were student loans, then I still wouldn't prioritize paying those off. There are income limits to Roth IRAs, so if you're in a field where you'll eventually make too much to contribute, then you'll lose that opportunity forever. If you're young and you don't feel like learning too much about investing, plop 100% of your contributions into the low-fee S&P 500 index fund and forget it until you get closer to retirement. Don't get suckered into their high-fee \"\"Retirement 20XX\"\" managed funds. Anyway, sure, if you have at least three months of income replacement in savings, have maximized your employer 401k match, have maximized your Roth IRA contributions for the year, and have no other higher interest debt, then go ahead and knock out those student loans.\"",
"title": ""
},
{
"docid": "6ff686a1b505bc0321186daa6657e650",
"text": "\"From a purely financial standpoint (psychology aside) the choice between paying off debt and investing on risky investments boils down to a comparison of risk and reward. Yes, on average the stock market has risen an average of 10% (give or take) per year, but the yearly returns on the S&P 500 have ranged from a high of 37.6% in 1995 to a low of -37% in 2008. So there's a good chance that your investment in index funds will get a better return than the guaranteed return of paying off the loan, but it's not certain, and you might end up much worse. You could even calculate a rough probability of coming out better with some reasonable assumptions (e.g. if you assume that returns are normally distributed, which historically they're not), but your chances are probably around 30% that you'll end up worse off in one year (your odds are better the longer your investment horizon is). If you can tolerate (meaning you have both the desire and the ability to take) that risk, then you might come out ahead. The non-financial factors, however - the psychology of debt, the drain on discretionary cash flow, etc. cannot be dismissed as \"\"irrational\"\". Paying off debt feels good. Yes, finance purists disagree with Dave Ramsey and his approaches, but you cannot deny the problems that debt causes millions of households (both consumer debt and student loan debt as well). If that makes them mindless \"\"minions\"\" because they follow a plan that worked for them then so be it. (disclosure - I am a listener and a fan but don't agree 100% with him)\"",
"title": ""
},
{
"docid": "2bf9265a495665f7f97313f95b46b42f",
"text": "\"Investing the money is only wise if the return on the investment outpaces your highest interest debt. Otherwise, you are making less than is going out. Given that you are in your late 50's, High risk investments are probably a poor idea. If you're truly worried about having enough to retire, I would take 15% of that money and put it toward your emergency fund. Then the rest I would use to pay down your highest interest credit line. You are short on funds right now so I would avoid using the HELOC. Your HELOC is available now, but if times get tight, the bank can decide to freeze your credit line. Instead, if you need a line of credit, look into a personal line of credit. The interest rate wont be as good as your HELOC but it's more stable. If you haven't already, I would pickup \"\"The Richest Man in Babylon\"\". Read the lessons in it and see if you can use the tools it provides to tighten your situation up. The lessons mostly apply to people in the first half of life, but they are fundamentals regardless. Good Luck! (Information on the HELOC was stolen from Jasper's answer here... HELOC with no first mortgage (for liquidity--no plans to spend it) )\"",
"title": ""
},
{
"docid": "0e18a477fd77394ef56f7c56879824f1",
"text": "There is no right answer here, one has to make the choice himself. Its best to have an emergency fund before you start to commit funds to other reasons. The plan looks good. Keep following it and revise the plan often.",
"title": ""
},
{
"docid": "556d779950d628f3bdb98b63bbbf4757",
"text": "If you can get a rate of savings that is higher than your debt, you save. If you can't then you pay off your debt. That makes the most of the money you have. Also to think about: what are you goals? Do you want to own a home, start a family, further your education, move to a new town? All of these you would need to save up for. If you can do these large transactions in cash you will be better off. If it were me I would do what I think is a parroting of Dave Ramsay's advice Congratulations by the way. It isn't easy to do what you have accomplished and you will lead a simpler life if you don't have to worry about money everyday.",
"title": ""
},
{
"docid": "005db9a6ec7f3421984f8cbc462239c8",
"text": "\"My biggest concern with this plan is that there's no going back should you decide that it is not going to work, either due to the strain on the relationship or for some other reason. If you were borrowing from a relative in place of a mortgage or a car loan, you can always refinance, and might just pay a little more interest or closing costs from a bank. Student loans are effectively unsecured, so your only option for a \"\"refinance\"\" would be to get a personal, unsecured loan (or borrow against existing collateral if you have it). You are going to have a tough time getting another 50k unsecured personal loan at anywhere near student-loan rates. The other negative aspects (overall risk of borrowing from family, loss of possible tax deduction) make this plan a no-go for me. (I'm NOT saying that it's always a good idea to borrow from family for homes or cars, only that there's at least an exit plan should you both decide it was a bad idea).\"",
"title": ""
},
{
"docid": "d7523341fb1046ff65e5a90e8538285c",
"text": "An extra payment on a loan is, broadly speaking, a known-return, risk-free investment. (That the return on the investment is in reduced costs going forward instead of increased revenue is basically immaterial, assuming you have sufficient cash flow to handle either situation.) We can't know what the interest rates will be like going forward, but we can know what they are today, because you gave us those numbers in your question. Quick now: Given the choice between a known return of 3.7% annually and a known return of 7% annually, with identical (and extremely low) risk, where would you invest your money? By putting the $15k toward the $14k loan, you free up $140 per month and have $1k left that you can put toward the $30k loan, which will reduce your payment term by $1k / $260/month or about 4 months. You will be debt free in 14 years 8 months. You pay $14,000 instead of $16,800 on the $14,000 loan, reducing the total cost of the loan by $2,800, and reduce the cost of the $30,000 loan by four months' worth of interest which is about $175 (so the $30,000 loan ends up costing you something like $46,600 instead of $46,800). By putting the $15k toward the $30k loan, you cut the principal of that one in half. Assuming that you keep paying the same amount each month, you will reduce the payment term by 7 ½ years, and will be debt free in 10 years (because the $14,000 10-year loan now has the longer term). Instead of paying $46,800 for the $30k loan, you end up paying $23,400 plus the $15,000 = $38,400, reducing the total cost of the $30,000 loan by $8,400 while doing nothing to reduce the cost of the $14,000 loan. To a first order estimate, using the $15,000 to pay off the $14,000 loan in full will improve your cash flow in the short term, but putting the money toward the $30,000 loan will give you a three-fold better return on investment over the term of both loans and nearly halve the total loan term, assuming unchanged monthly payments and unchanged interest rates. That's how powerful compounding interest is.",
"title": ""
},
{
"docid": "19c26e583dfc96d882f76601e33e82f5",
"text": "According to Dave Ramsey you should pay off the house. What I've found is that I'm willing to work a lot harder at saving money to put toward the house when I have that specific goal in mind. If I were to put the money in the market instead then I would be less likely to make as many sacrifices and would inevitability end up putting less money away.",
"title": ""
},
{
"docid": "839709aa6287a3c0bdadf5e399de228d",
"text": "I would recommend against loans from family members. But if you decide to go down that path take care of the basics: This is a business decision so treat it like one. I would add that the situation you describe sounds extremely generous to your family member. I'd look at standard loan agreements (ie. in the marketplace) and model your situation more on them - if you do this, even with you paying a premium, you'd never come up with something as generous as what you have described.",
"title": ""
},
{
"docid": "7e6110b72db7be0364dfa70f0f2309bf",
"text": "\"Condensed to the essence: if you can reliably get more income from investing the cost of the house than the mortgage is costing you, this is the safest leveraged investment you'll ever make. There's some risk, of course, but there is risk in any financial decision. Taking the mortgage also leaves you with far greater flexibility than if you become \"\"house- rich but cash-poor\"\". (Note that you probably shouldn't be buying at all if you may need geographic flexibility in the next five years or so; that's another part of the liquidity issue.) Also, it doesn't have to be either/or. I borrowed half and paid the rest in cash, though I could have taken either extreme, because that was the balance of certainty vs.risk that I was comfortable with. I also took a shorter mortgage than I might have, again trading off risk and return; I decided I would rather have the house paid off at about the same time that I retire.\"",
"title": ""
},
{
"docid": "3414a9831fe266b28d86c9ca5e4cadd5",
"text": "I've read the answers and respect the thought behind them. I'd like to focus on (a) the magnitude of the emergency, and (b) the saving rate of the people affected. 3-6 months is interesting. It's enough not just to fix the car, repair the A/C, etc, but more than enough to lose one's job and recover. (Let's avoid the debate of how long it take to find a job, no amount of 'emergency savings' can solve that.) If one is spending below their means, any unexpected expense that can paid off within, say 3 months, doesn't really need to tap emergency funds (EF). And, at some level of income and retirement savings, one can more easily run a much lower EF. My own situation - I had 9mo worth of expenses saved as EF. We were living well beneath our means, and I was looking at the difference between our mortgage (6%+) vs bank interest (near 0%). I used the funds to pay down principal, refinanced to a lower rate, and at the same closing got a HELOC. The psychology of this is tough, it then appears that for simple expenses, I'd be borrowing from my HELOC. On the other hand, the choice was between a known cost, the $5K/year the money was costing by sitting there plus the lower rate by going to a non-jumbo loan at the time, vs the risk of using 3% money from the HELOC. In the end, the HELOC was never tapped for more than a small portion of its line, and I never regretted the decision. Ironically, it's the person who isn't saving much that need the EF most. If you are a saver, you need to judge how long it would take to replace the funds. I offer the above not as a recommendation, but as devil's advocate to the other excellent advice here. All cash flows are a choice, $100 going here, can't go there. I'd slip in a warning that one should capture matching 401(k) contributions, if offered, before funding the EF. And pay down any high interest debt. After that, the decision of how liquid to be is a personal choice, what worked for my wife and me may not be for everyone.",
"title": ""
},
{
"docid": "4f6ed8bf407fec3f473e98f309f972ee",
"text": "The breakeven amount isn't at 8 years. You calculated how many years of paying $500 it would take to break even with one year of paying $4000. 8 x 10 years = 80 years. So by paying $500/year it will take you 80 years to have spent the same amount ($40000 total) as you did in 10 years. At this point it may seem obvious what the better choice is. Consider where you'll be after 10 years: In scenario #1 you've spent $5000 ($500*10) and have to continue spending $500/year indefinitely. In scenario #2 you've spent $40000 ($4000*10) and don't have to pay any more, but you currently have $35000 ($40000 - $5000) less than you did in scenario #1. If you had stayed with scenario #1 you could invest that $35000 at a measly 1.43% annual return and cover the $500 payments indefinitely without ever dipping into your remaining $35000. Most likely over the long term you'll do better than 1.43% per year and come out far ahead.",
"title": ""
},
{
"docid": "de786917a9584835bf7c24d2ad3ed4be",
"text": "\"I did a rough model and in terms of total $$ paid (interest + penalty - alternative investment income) both options are almost the same with the \"\"paying it all upfront\"\" being perhaps a $300 or so better ($9200 vs $8900) However, that doesn't factor in inflation or tax considerations. Personally I'd go with the \"\"no-penalty\"\" scenario since you have more flexibility and can adjust along the way if anything else comes up in the meantime.\"",
"title": ""
}
] |
fiqa
|
408e73014cc33a6eb567117eefbf974f
|
What bonds do I keep and which do I cash, why is the interest so different
|
[
{
"docid": "00a6879d475fe122dafc7c66deee27c9",
"text": "Bonds released at the same time have different interest rates because they have different levels of risks and liquidity associated. Risk will depend on the company / country / municipality that offers the bond: their financial position, and their resulting ability to make future payments & avoid default. Riskier organizations must offer higher interest rates to ensure that investors remain willing to loan them money. Liquidity depends on the terms of the loan - principal-only bonds give you minimal liquidity, as there are no ongoing interest payments, and nothing received until the bond's maturity date. All bonds provide lower liquidity if they have longer maturity dates. Bonds with lower liquidity must have higher returns to compensate for the fact that you will have to give up your cash for a longer period of time. Bonds released at different times will have different interest rates because of what the general 'market rate' for interest was in those periods. ie: if a bond is released in 2016 with interest rates approaching 0%, even a high risk bond would have a lower interest rate than a bond released in the 1980s, when market rates were approaching 20%. Some bonds offer variable interest tied to some market indicator - those will typically have higher interest at the time of issuance, because the bondholder bears some risk that the prevailing market rate will drop. Note regarding sale of bonds after market rates have changed: The value of your bonds will fluctuate with the market. If a bond was offered with 1% interest, and next year interest rates go up and a new identical bond is offered for 2% interest, when you sell your old bond you will take a loss, because the market won't want to pay full price for it anymore. Whether you should sell lower-interest rate bonds depends on how you feel about the factors above - do you want junk bonds that have stock-like levels of returns but high risks of default, maturing in 30 years? Or do you want AAA+ Bonds that have essentially 0% returns maturing in 30 days? If you are paying interest on debt, it is quite likely that you could achieve a net income benefit by selling the bonds, and paying off debt [assuming your debt has a higher interest rate than your low-rate bonds]. Paying off debt is sometimes referred to as a 'zero risk return', because essentially there is no real risk that your lender would otherwise go bankrupt. That is, you will owe your bank the car loan until you pay it, and paying it is the only thing you can do to reduce it. However, some schools of thought suggest that maintaining savings + liquid investments makes sense even if you have some debt, because cash + liquid investments can cover you in some emergencies that credit cards can't help you with. ie: if you lose your job, perhaps your credit could be pulled and you would have nothing except for your liquid savings to tide you over. How much you should save in this way is a matter of opinion, but often repeated numbers are either 3 months or 6 months worth [which is sometimes taken as x months of expenses, and sometimes as x months of after-tax income]. You should look into this issue further; there are many questions on this site that discuss it, I'm sure.",
"title": ""
}
] |
[
{
"docid": "c792b0ad91138ee36099aef622b3d59c",
"text": "\"The answer to almost all questions of this type is to draw a diagram. This will show you in graphical fashion the timing of all payments out and payments received. Then, if all these payments are brought to the same date and set equal to each other (using the desired rate of return), the equation to be solved is generated. In this case, taking the start of the bond's life as the point of reference, the various amounts are: Pay out = X Received = a series of 15 annual payments of $70, the first coming in 1 year. This can be brought to the reference date using the formula for the present value of an ordinary annuity. PLUS Received = A single payment of $1000, made 15 years in the future. This can be brought to the reference date using the simple interest formula. Set the pay-out equal to the present value of the payments received and solve for X I am unaware of the difference, if any, between \"\"current rate\"\" and \"\"rate to maturity\"\" Finding the rate for such a series of payments would start out the same as above, but solving the resulting equation for the interest rate would be a daunting task...\"",
"title": ""
},
{
"docid": "d9ff22fad222bb44d548c34d3f973584",
"text": "Yes, the interest rate on a Treasury does change as market rates change, through changes in the price. But once you purchase the instrument, the rate you get is locked in. The cashflows on a treasury are fixed. So if the market rate increase, the present value of those future cashflows decreases, so the price of the treasury decreases. If you buy the bond after this happens, you would pay a lower price for the same fixed cashflows, hence you will receive a higher rate. Note that once you purchase the treasury instrument, your returns are locked in and guaranteed, as others have mentioned. Also note that you should distinguish between Treasury Bills and Treasury Bonds, which you seem to use interchangeably. Straight from the horse's mouth, http://www.treasurydirect.gov/indiv/products/products.htm: Treasury Bills are short term securities with maturity up to a year, Treasury Notes are medium term securities with maturity between 1 and 10 years, and Treasury Bonds are anything over 10 years.",
"title": ""
},
{
"docid": "2aaca1bc531b6eef0e29db9a819bcf72",
"text": "Bonds can increase in price, if the demand is high and offer solid yield if the demand is low. For instance, Russian bond prices a year ago contracted big in price (ie: fell), but were paying 18% and made a solid buy. Now that the demand has risen, the price is up with the yield for those early investors the same, though newer investors are receiving less yield (about 9ish percent) and paying higher prices. I've rarely seen banks pay more variable interest than short term treasuries and the same holds true for long term CDs and long term treasuries. This isn't to say it's impossible, just rare. Also variable is different than a set term; if you buy a 10 year treasury at 18%, that means you get 18% for 10 years, even if interest rates fall four years later. Think about the people buying 30 year US treasuries during 1980-1985. Yowza. 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. Less likely? I don't know about your bank, but my bank doesn't owe $19 trillion.",
"title": ""
},
{
"docid": "2b49a84cc6307004df52a8092a033866",
"text": "\"You are asking multiple questions here, pieces of which may have been addressed in other questions. A bond (I'm using US Government bonds in this example, and making the 'zero risk of default' assumption) will be priced based on today's interest rate. This is true whether it's a 10% bond with 10 years left (say rates were 10% on the 30 yr bond 20 years ago) a 2% bond with 10 years, or a new 3% 10 year bond. The rate I use above is the 'coupon' rate, i.e. the amount the bond will pay each year in interest. What's the same for each bond is called the \"\"Yield to Maturity.\"\" The price adjusts, by the market, so the return over the next ten years is the same. A bond fund simply contains a mix of bonds, but in aggregate, has a yield as well as a duration, the time-and-interest-weighted maturity. When rates rise, the bond fund will drop in value based on this factor (duration). Does this begin to answer your question?\"",
"title": ""
},
{
"docid": "102958f9f7eb224d49a0ecd63eb3d7da",
"text": "I see three ways to do this. Note that I kept saying interest. I assumed for this answer you were only considering money being saved in a savings account. Money that is to be invested for the long term (college fund, retirement) have much different rules for contributions, use, deductibility, age rules: that they would tend not to be mixed within the same account.",
"title": ""
},
{
"docid": "03b1b1ff2669c5a7655dfae34ee02e90",
"text": "You only pay tax on the capital gain of the bond, not the principal, unless the source of the money for the principal was gain from another investment, if that makes sense. In other words, if you bought the bond with income earned from your job, that money was already taxed as income, so it isn't subject to taxation again when you redeem the bond. On the other hand, if you cashed out of one investment and used those proceeds to buy a bond, then the entire amount might be taxable.",
"title": ""
},
{
"docid": "a6aecffc3c71bd06b5b146360decb004",
"text": "The key word is 'After-Tax' money - you started with after-tax money, so you already paid taxes on it. Everything else is just moving it from freely available into ROTH, which locks it away a bit, but makes the interest tax-free.",
"title": ""
},
{
"docid": "07853fa175f861e90859a420391f7217",
"text": "\"You get paid interest on deposits because banks only keep a fraction of the deposits on-hand. The rest is put to other uses, such as loaning money to others. If you deposit money and yield 1% interest, the bank is able to fund an auto loan, at 5%. By saving, you are actually making more capital available in the marketplace. \"\"Fixed\"\" or \"\"durable\"\" assets like gold, real property, or durable goods are different -- their value is based on attributes such as demand (gold, oil) or location (real property). If you bought an apartment in Manhattan in 1975, it appreciated greatly in value over the course of 30 years... but it did so because demand for apartments in New York City grew, while the supply of apartments grew more slowly. The government prints money for two core reasons: Think of it this way: Money is valuable because it is money.\"",
"title": ""
},
{
"docid": "4bb5850e3ec9206f48e198dc9fef59bc",
"text": "If the market rate and coupon were equal, the bond would be valued at face value, by definition. (Not 100% true, but this is an exercise, and that would be tangent to this discussion). Since the market rate is higher than the coupon rate, the value I am willing to pay drops a bit, so my return is the same as the market rate. This can be done by hand, a time value of money calculation for each payment. Discount by the years till received at the market rate to get the present value for each payment, and sum up the numbers. The other way is to use a finance calculator and solve for rate. The final payment of $10,000 (ignore final coupon just now) is $10,000/(1.1^5). In other words, that single chunk of cash is worth 10% less if it's one year away, (1.1)^2 if 2 years away, etc. Draw a timetable with each payment and divide by 1.1 for each year it's away from present. If the 9% coupon is really 4.5% twice a year, it's $450 in 6 month intervals, and each 6 mo interval is really 5% you discount. Short durations like this can be done by hand, a 30 year bond with twice a year payments is a pain. Welcome to Money.SE.",
"title": ""
},
{
"docid": "f5f224b6fc38f1c0aa1c127dc0e0c132",
"text": "If I invest X each month, where does X go - an existing (low yield) bond, or a new bond (at the current interest rate)? This has to be viewed in a larger context. If the fund has outflows greater than or equal to inflows then chances are there isn't any buying being done with your money as that cash is going to those selling their shares in the fund. If though inflows are greater than outflows, there may be some new purchases or not. Don't forget that the new purchase could be an existing bond as the fund has to maintain the duration of being a short-term, intermediate-term or long-term bond fund though there are some exceptions like convertibles or high yield where duration isn't likely a factor. Does that just depend on what the fund manager is doing at the time (buying/selling)? No, it depends on the shares being created or redeemed as well as the manager's discretion. If I put Y into a fund, and leave it there for 50 years, where does Y go when all of the bonds at the time I made the purchase mature? You're missing that the fund may buy and sell bonds at various times as for example a long-term bond fund may not have issues nearing maturity because of what part of the yield curve it is to mimic. Does Y just get reinvested in new bonds at the interest rate at that time? Y gets mixed with the other money in the fund that may increase or decrease in value over time. This is part of the risk in a bond fund where NAV can fluctuate versus a money market mutual fund where the NAV is somewhat fixed at $1/share.",
"title": ""
},
{
"docid": "e1609c2ac8dec0f9dfee7fde2165d057",
"text": "Okay let's try this a different way. Completely forget about what the bond is with. Here is how a bond works: * You get paid interest for holding the bond (5% interest means a coupon of $50 assuming one coupon a year) * At the end of the bond term (maturity) you get paid $1000. In your scenario, you get paid the $50 as an interest payment and the $1000 final payment. If you only had the bond for one year, your total payment will be $1050. Try drawing a timeline to visualise it a bit better",
"title": ""
},
{
"docid": "77f2fb35a2beff9e1f1c485393fb6fd7",
"text": "\"Hey guys I have a quick question about a financial accounting problem although I think it's not really an \"\"accounting\"\" problem but just a bond problem. Here it goes GSB Corporation issued semiannual coupon bonds with a face value of $110,000 several years ago. The annual coupon rate is 8%, with two coupons due each year, six months apart. The historical market interest rate was 10% compounded semiannually when GSB Corporation issued the bonds, equal to an effective interest rate of 10.25% [= (1.05 × 1.05) – 1]. GSB Corporation accounts for these bonds using amortized cost measurement based on the historical market interest rate. The current market interest rate at the beginning of the current year on these bonds was 6% compounded semiannually, for an effective interest rate of 6.09% [= (1.03 × 1.03) – 1]. The market interest rate remained at this level throughout the current year. The bonds had a book value of $100,000 at the beginning of the current year. When the firm made the payment at the end of the first six months of the current year, the accountant debited a liability for the exact amount of cash paid. Compute the amount of interest expense on these bonds for the last six months of the life of the bonds, assuming all bonds remain outstanding until the retirement date. My question is why would they give me the effective interest rate for both the historical and current rate? The problem states that the firm accounts for the bond using historical interest which is 10% semiannual and the coupon payments are 4400 twice per year. I was just wondering if I should just do the (Beginning Balance (which is 100000 in this case) x 1.05)-4400=Ending Balance so on and so forth until I get to the 110000 maturity value. I got an answer of 5474.97 and was wondering if that's the correct approach or not.\"",
"title": ""
},
{
"docid": "60c7a63fe5895530895d65fd191b7bab",
"text": "The 10yr bond pays coupons semi annually. The yield % is what you would get annually if you hold the bond to full term. The coupon payment won't be exactly 1.65%/2 because of how bond pricing and yields work. The yield commonly quoted does not tell you how much each interest payment is. You have to look at the price and coupon of a specific individual bond. The rate you see is the market equilibrium yield at the present. Example, I offer two different people two different bonds. Joe buys a 10yr bond paying 5% coupons semi annually at a par value of $1000. I charge him $1000. Bob wants to buy a 10yr bond paying 10% coupons semi annually at a par value of $1000. I charge him $1500 for this. The yield is similar between the two (not equal due to math details but lets assume). So at the end of 10 yrs, the two have roughly the same total amount of $. Bob's paid more each year but he paid more up front. This is why the federal govt can issue bonds with diff coupons and the market prices them so the yield rises/falls to the market clearing yield.",
"title": ""
},
{
"docid": "1828d0f73127846d23d4eaf92134d5fc",
"text": "Different stakeholders receive cash flows at different times. The easiest way for me to remember is if you're a debt holder vs equity owner on an income statement. Interest payments are made before net income, so debt holders are repaid before any residual cash flows go to equity owners.",
"title": ""
},
{
"docid": "9f6eb9bab6cfd828e5f156662dbcbb2a",
"text": "Imagine that the existing interest rate is 5%. So on a bond with face value of 100, you would be getting a $5 coupon implying a 5% yield. Now, if let's say the interest rates go up to 10%, then a new bond issued with a face value of 100 will give you a coupon of $10 implying a 10% yield. If someone in the bond market buys your bond after interest price adjustment, in order to make the 10% yield (which means that an investor typically targets at least the risk-free rate on his investments) he needs to buy your bond at $50 so that a $5 coupon can give a 10% yield. The reverse happens when interest rates go down. I hope this somewhat clears the picture. Yield = Coupon/Investment Amount Update: Since the interest rate of the bond does not change after its issuance, the arbitrage in the interest rate is reflected in the market price of the bond. This helps in bringing back the yields of old bonds in-line with the freshly issued bonds.",
"title": ""
}
] |
fiqa
|
db65c4c8edca0b8834e47cbf8cbdc790
|
When the market crashes, should I sell bonds and buy equities for the inevitable recovery?
|
[
{
"docid": "f5f8e55a69c763efd9c32592762998ef",
"text": "When the market moves significantly, you should rebalance your investments to maintain the diversification ratios you have selected. That means if bonds go up and stocks go down, you sell bonds and buy stocks (to some degree), and vice versa. Sell high to buy low, and remember that over the long run most things regress to the mean.",
"title": ""
},
{
"docid": "bae2ad702ebc1440fa3a7f006e568fe8",
"text": "\"The problem with the proposed plan is the word \"\"inevitable\"\". There is no such thing as a recovery that is guaranteed (though we may wish it to be so), and even if there was there is no telling how long it will take for a recovery to occur to a sufficient degree. There are also no foolproof ways to determine when you have hit the bottom. For historical examples, consider the Nikkei. In 2000 the value fell from 20000 to 15000 in a single year. Had you bought then, you would have found the market still fell and didn't get back to 15k until 2005...where it went up and down for years, when in 2008 it fell again and would not get back to that level again until 2014. Lest you think this was an isolated international incident, the same issues happened to the S&P in 2002, where things went up until they fell even lower in 2009 before finally climbing again. Will there be another recession at some point? Surely. Will there be a single, double, or triple dip, and at what point is the true bottom - and will it take 5, 10, or 20+ years for things to get back above when you bought? No one really knows, and we can only guess. So if you want to double down after a recession, you can, but it's important you not fool yourself into thinking you aren't greatly increasing your risk exposure, because you are.\"",
"title": ""
},
{
"docid": "2e86ea9f7bcc032c91a378bf0b83ae11",
"text": "\"In a comment you say, if the market crashes, doesn't \"\"regress to the mean\"\" mean that I should still expect 7% over the long run? That being the case, wouldn't I benefit from intentionally unbalancing my portfolio and going all in on equities? I can can still rebalance using new savings. No. Regress to the mean just tells you that the future rate is likely to average 7%. The past rate and the future rate are entirely unconnected. Consider a series: The running average is That running average is (slowly) regressing to the long term mean without ever a member of the series being above 7%. Real markets actually go farther than this though. Real value may be increasing by 7% per year, but prices may move differently. Then market prices may revert to the real value. This happened to the S&P 500 in 2000-2002. Then the market started climbing again in 2003. In your system, you would have bought into the falling markets of 2001 and 2002. And you would have missed the positive bond returns in those years. That's about a -25% annual shift in returns on that portion of your portfolio. Since that's a third of your portfolio, you'd have lost 8% more than with the balanced strategy each of those two years. Note that in that case, the market was in an over-valued bubble. The bubble spent three years popping and overshot the actual value. So 2003 was a good year for stocks. But the three year return was still -11%. In retrospect, investors should have gone all in on bonds before 2000 and switched back to stocks for 2003. But no one knew that in 2000. People in the know actually started backing off in 1998 rather than 2000 and missed out on the tail end of the bubble. The rebalancing strategy automatically helps with your regression to the mean. It sells expensive bonds and buys cheaper stocks on average. Occasionally it sells modest priced bonds and buys over-priced stocks. But rarely enough that it is a better strategy overall. Incidentally, I would consider a 33% share high for bonds. 30% is better. And that shouldn't increase as you age (less than 30% bonds may be practical when you are young enough). Once you get close to retirement (five to ten years), start converting some of your savings to cash equivalents. The cash equivalents are guaranteed not to lose value (but might not gain much). This gives you predictable returns for your immediate expenses. Once retired, try to keep about five years of expenses in cash equivalents. Then you don't have to worry about short term market fluctuations. Spend down your buffer until the market catches back up. It's true that bonds are less volatile than stocks, but they can still have bad years. A 70%/30% mix of stocks/bonds is safer than either alone and gives almost as good of a return as stocks alone. Adding more bonds actually increases your risk unless you carefully balance them with the right stocks. And if you're doing that, you don't need simplistic rules like a 70%/30% balance.\"",
"title": ""
}
] |
[
{
"docid": "638320cdc9164f1f10fc3d266a808369",
"text": "\"Nobody has a \"\"crash proof\"\" portfolio -- you can make it \"\"crash resistant\"\". You protect against a crash by diversifying and not reacting out of fear when the markets are down. Be careful about focusing on the worst possible scenario (US default) vs. the more likely scenarios. Right now, many people think that inflation and interest rates are heading up -- so you should be making sure that your bond portfolio is mostly in short-duration bonds that are less sensitive to rate risk. Another risk is opportunity cost. Many people sold all of their equities in 2008/2009, and are sitting on lots of money in cash accounts. That money is \"\"safe\"\", but those investors lost the opportunity to recoup investments or grow -- to the tune of 25-40%.\"",
"title": ""
},
{
"docid": "5b70a0767127af96e29b1b5b41b93e99",
"text": "\"I can think of a few reasons for this. First, bonds are not as correlated with the stock market so having some in your portfolio will reduce volatility by a bit. This is nice because it makes you panic less about the value changes in your portfolio when the stock market is acting up, and I'm sure that fund managers would rather you make less money consistently then more money in a more volatile way. Secondly, you never know when you might need that money, and since stock market crashes tend to be correlated with people losing their jobs, it would be really unfortunate to have to sell off stocks when they are under-priced due to market shenanigans. The bond portion of your portfolio would be more likely to be stable and easier to sell to help you get through a rough patch. I have some investment money I don't plan to touch for 20 years and I have the bond portion set to 5-10% since I might as well go for a \"\"high growth\"\" position, but if you're more conservative, and might make withdrawals, it's better to have more in bonds... I definitely will switch over more into bonds when I get ready to retire-- I'd rather have slow consistent payments for my retirement than lose a lot in an unexpected crash at a bad time!\"",
"title": ""
},
{
"docid": "fcf2b15982ae3548294ee3179cbb93b7",
"text": "It is typically possible to sell during a crash, because there are enough people that understand the mechanics behind a crash. Generally, you need to understand that you don't lose money from the crash, but from selling. Every single crash in history more than recovered, and by staying invested, you wouldn't have lost anything (this assumes you have enough time to sit it out; it could take several years to recover). On the other side of those deals are people that understand that, and make money by buying during a crash. They simply sit the crash out, and some time later they made a killing from what you panic-sold, when it recovers its value.",
"title": ""
},
{
"docid": "066948b9fc6a4f2be190196461892328",
"text": "\"First, there will always be people who think the market is about to crash. It doesn't really crash very often. When it does crash, they always say they predicted it. Well, even a blind squirrel finds a nut once in a while. You could go short (short selling stocks), which requires a margin account that you have to qualify for (typically you can only short up to half the value of your account, in the US). And if you've maxed out your margin limits and your account continues to drop in value, you risk a margin call, which would force you to cover your shorts, which you may not be able to afford. You could invest in a fund that does the shorting for you. You could also consider actually buying good investments while their prices are low. Since you cannot predict the start, or end, of a \"\"crash\"\" you should consider dollar-cost-averaging until your stocks hit a price you've pre-determined is your \"\"trigger\"\", then purchase larger quantities at the bargain prices. The equity markets have never failed to recover from crashes. Ever.\"",
"title": ""
},
{
"docid": "e06513ea6682d175b2be99e6ede27c69",
"text": "The short answer is if you own a representative index of global bonds (say AGG) and global stocks (say ACWI) the bonds will generally only suffer minimally in even the medium large market crashes you describe. However, there are some caveats. Not all bonds will tend to react the same way. Bonds that are considered higher-yield (say BBB rated and below) tend to drop significantly in stock market crashes though not as much as stock markets themselves. Emerging market bonds can drop even more as weaker foreign currencies can drop in global crashes as well. Also, if a local market crash is caused by rampant inflation as in the US during the 70s-80s, bonds can crash at the same time as markets. There hasn't been a global crash caused by inflation after countries left the gold standard, but that doesn't mean it can't happen. Still, I don't mean to scare you away from adding bond exposure to a stock portfolio as bonds tend to have low correlations with stocks and significant returns. Just be aware that these correlations can change over time (sometimes quickly) and depend on which stocks/bonds you invest in.",
"title": ""
},
{
"docid": "965faa14f779d2158cfbb2260982ea77",
"text": "\"At 50 years old, and a dozen years or so from retirement, I am close to 100% in equities in my retirement accounts. Most financial planners would say this is way too risky, which sort of addresses your question. I seek high return rather than protection of principal. If I was you at 22, I would mainly look at high returns rather than protection of principal. The short answer is, that even if your investments drop by half, you have plenty of time to recover. But onto the long answer. You sort of have to imagine yourself close to retirement age, and what that would look like. If you are contributing at 22, I would say that it is likely that you end up with 3 million (in today's dollars). Will you have low or high monthly expenses? Will you have other sources of income such as rental properties? Let's say you rental income that comes close to covering your monthly expenses, but is short about 12K per year. You have a couple of options: So in the end let's say you are ready to retire with about 60K in cash above your emergency fund. You have the ability to live off that cash for 5 years. You can replenish that fund from equity investments at opportune times. Its also likely you equity investments will grow a lot more than your expenses and any emergencies. There really is no need to have a significant amount out of equities. In the case cited, real estate serves as your cash investment. Now one can fret and say \"\"how will I know I have all of that when I am ready to retire\"\"? The answer is simple: structure your life now so it looks that way in the future. You are off to a good start. Right now your job is to build your investments in your 401K (which you are doing) and get good at budgeting. The rest will follow. After that your next step is to buy your first home. Good work on looking to plan for your future.\"",
"title": ""
},
{
"docid": "ae55727bbd50c019ffc3bba54ce4b1f7",
"text": "Although it is impossible to predict the next stock market crash, what are some signs or measures that indicate the economy is unstable? These questions are really two sides of the same coin. As such, there's really no way to tell, at least not with any amount of accuracy that would allow you time the market. Instead, follow the advice of William Bernstein regarding long-term investments. I'm paraphrasing, but the gist is: Markets crash every so often. It's a fact of life. If you maintain financial and investment discipline, you can take advantage of the crashes by having sufficient funds to purchase when stocks are on sale. With a long-term investment horizon, crashes are actually a blessing since you're in prime position to profit from them.",
"title": ""
},
{
"docid": "b901c683f6c4bbe5c0b5e43e82f77645",
"text": "\"The fact that some asset (in this case corporate bonds) has positive correlation with some other asset (equity) doesn't mean buying both isn't a good idea. Unless they are perfectly correlated, the best risk/reward portfolio will include both assets as they will sometimes move in opposite directions and cancel out each other's risk. So yes, you should buy corporate bonds. Short-term government bonds are essentially the risk-free asset. You will want to include that as well if you are very risk averse, otherwise you may not. Long-term government bonds may be default free but they are not risk free. They will make money if interest rates fall and lose if interest rates rise. Because of that risk, they also pay you a premium, albeit a small one, and should be in your portfolio. So yes, a passive portfolio (actually, any reasonable portfolio) should strive to reduce risk by diversifying into all assets that it reasonably can. If you believe the capital asset pricing model, the weights on portfolio assets should correspond to market weights (more money in bonds than stocks). Otherwise you will need to choose your weights. Unfortunately we are not able to estimate the true expected returns of risky assets, so no one can really agree on what the true optimal weights should be. That's why there are so many rules of thumb and so much disagreement on the subject. But there is little or no disagreement on the fact that the optimal portfolio does include risky bonds including long-term treasuries. To answer your follow-up question about an \"\"anchor,\"\" if by that you mean a risk-free asset then the answer is not really. Any risk-free asset is paying approximately zero right now. Some assets with very little risk will earn a very little bit more than short term treasuries, but overall there's nowhere to hide--the time value of money is extremely low at short horizons. You want expected returns, you must take risk.\"",
"title": ""
},
{
"docid": "312d9c813916aa05b71e3fdeac51bd57",
"text": "\"Yes. Bonds perform very well in a recession. In fact the safer the bond, the better it would do in a recession. Think of markets having four seasons: High growth and low inflation - \"\"growing economy\"\" High growth and high inflation - \"\"overheating economy\"\" Low growth and high inflation - \"\"stagflation\"\" Low growth and low inflation - \"\"recession\"\" Bonds are the best investment in a recession. qplum's flagship strategy had a very high allocation to bonds in the financial crisis. That's why in backtest it shows much better returns.\"",
"title": ""
},
{
"docid": "2fafdfc536de79a7ae3d9e9234c7c5d3",
"text": "Ponder this. Suppose that a reputable company or government were to come out and say hey, we are going to issue some 10 year bonds at 6.4%. Anyone interested in buying some? Assume that the company or government is financially solid and there is zero chance that they will go bankrupt. Think those bonds would sell? Would you be interested in buying such a bond? Well, I would wager that these bonds would sell like hotcakes, despite the fact that the long term stock market return beats it by a half percent. Heck, vanguard's junk bond fund is hot right now. It only yields 4.9% and those are junk bonds, not rock solid companies (see vanguard high yield corporate bond fund) Every time you make an extra principal payment on your student loan, you are effectively purchasing a investment with a rock solid, guaranteed 6.4% return for 10 years (or whatever time you have left on the loan if make no extra payments). On top of that, paying off a loan early builds your credit reputation, improves your monthly cash flow once the loan is paid, may increase your purchasing power for a house or car, and if nothing else, it frees you from being a slave to that debt payment every month. Edit Improved wording based on Ross's comment",
"title": ""
},
{
"docid": "e7777b222351bc03f73b9c5d9a640863",
"text": "Your asset mix should reflect your own risk tolerance. Whatever the ideal answer to your question, it requires you to have good timing, not once, but twice. Let me offer a personal example. In 2007, the S&P hit its short term peak at 1550 or so. As it tanked in the crisis, a coworker shared with me that he went to cash, on the way down, selling out at about 1100. At the bottom, 670 or so, I congratulated his brilliance (sarcasm here) and as it passed 1300 just 2 years later, again mentions how he must be thrilled he doubled his money. He admitted he was still in cash. Done with stocks. So he was worse off than had he held on to his pre-crash assets. For sake of disclosure, my own mix at the time was 100% stock. That's not a recommendation, just a reflection of how my wife and I were invested. We retired early, and after the 2013 excellent year, moved to a mix closer to 75/25. At any time, a crisis hits, and we have 5-6 years spending money to let the market recover. If a Japanesque long term decline occurs, Social Security kicks in for us in 8 years. If my intent wasn't 100% clear, I'm suggesting your long term investing should always reflect your own risk tolerance, not some short term gut feel that disaster is around the corner.",
"title": ""
},
{
"docid": "61c009824d600a359938973082715984",
"text": "\"There are a few major risks to doing something like that. First, you should never invest money you can't afford to lose. An emergency fund is money you can't afford to lose - by definition, you may need to have quick access to that money. If you determine that you need, for example, $3000 in emergency savings, that means that you need to have at least $3000 at all times - if you lose $500, then you now only have $2500 in emergency savings. Imagine what could've happened if you had invested your emergency savings during the 2008 crash, for example; you could easily have been in a position where you lost both your job and a good portion of your emergency savings at the same time, which is a terrible position to be in. If the car breaks down, you can't really say \"\"now's a bad time, wait until the stock market bounces back.\"\" Second, with brokerage accounts, there may be a delay before you can actually access the money or transfer it to an account that you can actually withdraw cash from or write checks against (but some of this depends on the exact arrangement you have with your bank). This can be a problem if you're in a situation where you need immediate access to the money - if your furnace breaks in the middle of winter, you probably don't want to wait a few days for the sale and transfer to go through before you can have it fixed. Third, you can be forced to sell the investments at an unfavorable price because you're not sure when you're going to need it. You'd also likely incur trading fees and/or early withdrawal penalties when you tried to withdraw the money. Think about it this way: if you buy a bond that matures in 5 years, you're effectively betting that you won't have an emergency for the next 5 years. If you do, you'll have to either sell the bond or, if you're allowed to get the money back early, you'll likely forfeit a good amount of the interest you earned in the process (which kind of kills the point of buying the bond in the first place). Edit: As @Barmar pointed out in the comments, you may also have to pay taxes on the profits if you sell at a favorable price. In the U.S. at least, capital gains on stuff held for less than a year is taxed at your ordinary income tax rate and stuff held longer than a year is taxed at the long-term capital gains tax rate. So, if you hold the investment for less than a year, you're opening yourself up to the risks of short-term stock fluctuations as well as potential tax penalties, so if you put your emergency fund in stocks you're essentially betting that you won't have an emergency that year (which by definition you can't know). The purpose of an emergency fund is just that - to be an emergency fund. Its purpose isn't really to make money.\"",
"title": ""
},
{
"docid": "e431c2f9d469ccc33da64dbcf88180e7",
"text": "Short-term to intermediate-term corporate bond funds are available. The bond fund vehicle helps manage the credit risk, while the short terms help manage inflation and interest rate risk. Corporate bond funds will have fewer Treasuries bonds than a general-purpose short-term bond fund: it sounds like you're interested in things further out along the risk curve than a 0.48% return on a 5-year bond, and thus don't care for the Treasuries. Corporate bonds are generally safer than stocks because, in bankruptcy, all your bondholders have to be paid in full before any equity-holders get a penny. Stocks are much more volatile, since they're essentially worth the value of their profits after paying all their debt, taxes, and other expenses. As far as stocks are concerned, they're not very good for the short term at all. One of the stabler stock funds would be something like the Vanguard Equity Income Fund, and it cautions: This fund is designed to provide investors with an above-average level of current income while offering exposure to the stock market. Since the fund typically invests in companies that are dedicated to consistently paying dividends, it may have a higher yield than other Vanguard stock mutual funds. The fund’s emphasis on slower-growing, higher-yielding companies can also mean that its total return may not be as strong in a significant bull market. This income-focused fund may be appropriate for investors who have a long-term investment goal and a tolerance for stock market volatility. Even the large-cap stable companies can have their value fall dramatically in the short term. Look at its price chart; 2008 was brutal. Avoid stocks if you need to spend your money within a couple of years. Whatever you choose, read the prospectus to understand the risks.",
"title": ""
},
{
"docid": "17cee3ebfdac8768670d920046c52595",
"text": "You're wise to consider mitigating risks considering your age and portfolio size, but 'in' and 'out' are so reductive and binary. Why not be both? Leave some in and let it ride, providing growth but taking risk. Put some in bonds, where it'll earn more than cash and maybe zig when stocks zag. I applaud you for calling the last two crashes, but remember: a lot of people called them. Jeremy Bentham called the dot com bubble *years* in advance - of course, he got out too early, and the investors in his funds suffered for it. Timing means getting the sell and the buy right, which very few can do. Hence my advice to hold a balanced portfolio or *if you really do have the golden touch* make use of that ability and get rich - no need to work a 9 to 5 if you can call market crashes accurately.",
"title": ""
},
{
"docid": "386d599549ca10d1935bf316265b5165",
"text": "Most of the information we get about how a company is running its business, in any market, comes from the company. If the information is related to financial statements, it is checked by an external audit, and then provided to the public through official channels. All of these controls are meant to make it very unlikely for a firm to commit fraud or to cook its books. In that sense the controls are successful, very few firms provide fraudulent information to the public compared with the thousands of companies that list in stock markets around the world. Now, there is still a handful of firms that have committed fraud, and it is probable that a few firms are committing fraud right now. But, these companies go to great lengths to keep information about their fraud hidden from both the public and the authorities. All of these factors contribute to such frauds being black swan events to the outside observer. A black swan event is an event that is highly improbable, impossible to foresee with the information available before the event (it can only be analyzed in retrospect), and it has very large impact. The classification of an event as a black swan depends on your perspective. E.g. the Enron collapse was not as unexpected to the Enron executives as it was to its investors. You cannot foresee black swan events, but there are a few strategies that allow you to insure yourself against them. One such strategy is buying out of the money puts in the stocks where you have an investment, the idea being that in the event of a crash - due to fraud or whatever other reason - the profits in your puts would offset the loses on the stock. This strategy however suffers from time and loses a little money every day that the black swan doesn't show up, thanks to theta decay. So while it is not possible to detect fraud before investing, or at least not feasible with the resources and information available to the average investor, it is possible to obtain some degree of protection against it, at a cost. Whether that cost is too high or not, is the million dollar question.",
"title": ""
}
] |
fiqa
|
c933a4e0aca37297a60630780ef79519
|
Is there anything I can do to prepare myself for the tax consequences of selling investments to buy a house?
|
[
{
"docid": "86cc49b09050e154d0e41b6e2828d838",
"text": "Don't let tax considerations be the main driver. That's generally a bad idea. You should keep tax in mind when making the decision, but don't let it be the main reason for an action. selling the higher priced shares (possibly at a loss even) - I think it's ok to do that, and it doesn't necessarily have to be FIFO? It is OK to do that, but consider also the term. Long term gain has much lower taxes than short term gain, and short term loss will be offsetting long term gain - means you can lose some of the potential tax benefit. any potential writeoffs related to buying a home that can offset capital gains? No, and anyway if you're buying a personal residence (a home for yourself) - there's nothing to write off (except for the mortgage interest and property taxes of course). selling other investments for a capital loss to offset this sale? Again - why sell at a loss? anything related to retirement accounts? e.g. I think I recall being able to take a loan from your retirement account in order to buy a home You can take a loan, and you can also withdraw up to 10K without a penalty (if conditions are met). Bottom line - be prepared to pay the tax on the gains, and check how much it is going to be roughly. You can apply previous year refund to the next year to mitigate the shock, you can put some money aside, and you can raise your salary withholding to make sure you're not hit with a high bill and penalties next April after you do that. As long as you keep in mind the tax bill and put aside an amount to pay it - you'll be fine. I see no reason to sell at loss or pay extra interest to someone just to reduce the nominal amount of the tax. If you're selling at loss - you're losing money. If you're selling at gain and paying tax - you're earning money, even if the earnings are reduced by the tax.",
"title": ""
},
{
"docid": "d1472c65dc003b8301b259da45632449",
"text": "Have you changed how you handle fund distributions? While it is typical to re-invest the distributions to buy additional shares, this may not make sense if you want to get a little cash to use for the home purchase. While you may already handle this, it isn't mentioned in the question. While it likely won't make a big difference, it could be a useful factor to consider, potentially if you ponder how risky is it having your down payment fluctuate in value from day to day. I'd just think it is more convenient to take the distributions in cash and that way have fewer transactions to report in the following year. Unless you have a working crystal ball, there is no way to definitively predict if the market will be up or down in exactly 2 years from now. Thus, I suggest taking the distributions in cash and investing in something much lower risk like a money market mutual fund.",
"title": ""
},
{
"docid": "a9dbe7f5f0b136736a208fcb32b3c391",
"text": "\"If you need less than $125k for the downpayment, I recommend you convert your mutual fund shares to their ETF counterparts tax-free: Can I convert conventional Vanguard mutual fund shares to Vanguard ETFs? Shareholders of Vanguard stock index funds that offer Vanguard ETFs may convert their conventional shares to Vanguard ETFs of the same fund. This conversion is generally tax-free, although some brokerage firms may be unable to convert fractional shares, which could result in a modest taxable gain. (Four of our bond ETFs—Total Bond Market, Short-Term Bond, Intermediate-Term Bond, and Long-Term Bond—do not allow the conversion of bond index fund shares to bond ETF shares of the same fund; the other eight Vanguard bond ETFs allow conversions.) There is no fee for Vanguard Brokerage clients to convert conventional shares to Vanguard ETFs of the same fund. Other brokerage providers may charge a fee for this service. For more information, contact your brokerage firm, or call 866-499-8473. Once you convert from conventional shares to Vanguard ETFs, you cannot convert back to conventional shares. Also, conventional shares held through a 401(k) account cannot be converted to Vanguard ETFs. https://personal.vanguard.com/us/content/Funds/FundsVIPERWhatAreVIPERSharesJSP.jsp Withdraw the money you need as a margin loan, buy the house, get a second mortgage of $125k, take the proceeds from the second mortgage and pay back the margin loan. Even if you have short term credit funds, it'd still be wiser to lever up the house completely as long as you're not overpaying or in a bubble area, considering your ample personal investments and the combined rate of return of the house and the funds exceeding the mortgage interest rate. Also, mortgage interest is tax deductible while margin interest isn't, pushing the net return even higher. $125k Generally, I recommend this figure to you because the biggest S&P collapse since the recession took off about 50% from the top. If you borrow $125k on margin, and the total value of the funds drop 50%, you shouldn't suffer margin calls. I assumed that you were more or less invested in the S&P on average (as most modern \"\"asset allocations\"\" basically recommend a back-door S&P as a mix of credit assets, managed futures, and small caps average the S&P). Second mortgage Yes, you will have two loans that you're paying interest on. You've traded having less invested in securities & a capital gains tax bill for more liabilities, interest payments, interest deductions, more invested in securities, a higher combined rate of return. If you have $500k set aside in securities and want $500k in real estate, this is more than safe for you as you will most likely have a combined rate of return of ~5% on $500k with interest on $500k at ~3.5%. If you're in small cap value, you'll probably be grossing ~15% on $500k. You definitely need to secure your labor income with supplementary insurance. Start a new question if you need a model for that. Secure real estate with securities A local bank would be more likely to do this than a major one, but if you secure the house with the investment account with special provisions like giving them copies of your monthly statements, etc, you might even get a lower rate on your mortgage considering how over-secured the loan would be. You might even be able to wrap it up without a down payment in one loan if it's still legal. Mortgage regulations have changed a lot since the housing crash.\"",
"title": ""
}
] |
[
{
"docid": "c8a32bd41ce337dbffc94eb86141d43a",
"text": "In response to one of the comments you might be interested in owning the new home as a rental property for a year. You could flip this thinking and make the current home into a rental property for a period of time (1 year seems to be the consensus, consult an accountant familiar with real estate). This will potentially allow for a 1031 exchange into another property -- although I believe that property can't then be a primary residence. All potentially not worth the complication for the tax savings, but figured I'd throw it out there. Also, the 1031 exchange defers taxes until some point in the future in which you finally sell the asset(s) for cash.",
"title": ""
},
{
"docid": "e45082ebd31646e9466456f04258ad79",
"text": "\"Please declare everything you earn in India as well as the total amount of assets (it's called FBAR). The penalties for not declaring is jail time no matter how small the amount (and lots of ordinary people every 2-3 years are regularly sent to jail for not declaring such income). It's taken very seriously by the IRS - and any Indian bank who has an office in the US or does business here, can be asked by IRS to provide any bank account details for you. You will get deductions for taxes already paid to a foreign country due to double taxation, so there won't be any additional taxes because income taxes in US are on par or even lower than that in India. Using tricks (like transferring ownership to your brother) may not be worth it. Note: you pay taxes only when you realize gains anyway - both in India or here, so why do you want to take such hassles. If you transfer to your brother, it will be taxed only until you hold them. Make sure you have exact dates of gains between the date you came to US and the date you \"\"gifted\"\" to your brother. As long as you clearly document that the stocks transferred to your brother was a gift and you have no more claims on them, it should be ok, but best to consult a CPA in the US. If you have claims on them, example agreement that you will repurchase them, then you will still continue to pay taxes. If you sell your real estate investments in India, you have to pay tax on the gains in the US (and you need proof of the original buying cost and your sale). If you have paid taxes on the real estate gains in India, then you can get deduction due to double tax avoidance treaty. No issues in bringing over the capital from India to US.\"",
"title": ""
},
{
"docid": "d129de5049e0ce307a46337a8462b5c2",
"text": "To your first question: YES. Capital gains and losses on real-estate are treated differently than income. Note here for exact IRS standards. The IRS will not care about percentage change but historical (recorded) amounts. To your second question: NO Are you taxed when buying a new stock? No. But be sure to record the price paid for the house. Note here for more questions. *Always consult a CPA for tax advice on federal tax returns.",
"title": ""
},
{
"docid": "985b9e21c615e3610c4f8c94212c7da3",
"text": "You can withdraw the contributions you made to Roth IRA tax free. Any withdrawals from Roth IRA count first towards the contributions, then conversions, and only then towards the gains which are taxable. You can also withdraw up to $10000 of the taxable portion penalty free (from either the Traditional IRA or the Roth IRA, or the combination of both) if it is applied towards the purchase of your first primary residence (i.e.: you don't own a place yet, and you're buying your first home, which will become your primary residence). That said, however, I cannot see how you can buy a $250K house. You didn't say anything about your income, but just the cash needed for the down-payment will essentially leave you naked and broke. Consider what happens if you have an emergency, out of a job for a couple of months, or something else of that kind. It is generally advised to have enough cash liquid savings to keep you afloat for at least half a year (including mortgage payments, necessities and whatever expenses you need to spend to get back on track - job searching, medical, moving, etc). It doesn't look like you're anywhere near that. Remember, many bankruptcies are happening because of the cash-flow problem, not the actual ability to repay debts on the long run.",
"title": ""
},
{
"docid": "b3371f553b12a1b7800b33aa60fbd97b",
"text": "Yes (most likely). If you are exchanging investments for cash, you will have to pay tax on that - disregarding capital losses, capital loss carryovers, AGI thresholds, and other special rules (which there is no indication of in your question). You will have to calculate the gain on Schedule D, and report that as income on your 1040. This is the case whether you buy different or same stocks.",
"title": ""
},
{
"docid": "c470b81e98a85a192222aefeb2d08363",
"text": "yes. you can take out 500,000 form your paid of house. you pay back 500,000 at 3.5. percent. you do get a tax break for not owning your house. it is less then 3.5 you are paying back the back. about one forth of that, BUT you take the 500,000 in invest. Now cd low 1 percent, stock is risky. You can do REIT, with are about 8 to 12 every year. so even at 8 - tax 1.5 is 6.5 - 3.5 bank loan. that 3 percent on your 500,000 thousand, plus tax break, but that only at 8 percent. or 500,000 and buy a apartment building, again about 7 to 10 percent, so that 2 to 3 percent profit, but the building goes up over years.",
"title": ""
},
{
"docid": "8394b41dc5e16d17c616139c687e014c",
"text": "If it is US, you need to take tax implications into account. Profit taken from sale of your home is taxable. One approach would be to take the tax hit, pay down the student loans, rent, and focus any extra that you can on paying off the student loans quickly. The tax is on realized gains when you sell the property. I think that any equity under the original purchase price is taxed at a lower rate (or zero). Consult a tax pro in your area. Do not blindly assume buying is better than renting. Run the numbers. Rent Vs buy is not a question with a single answer. It depends greatly on the real estate market where you are, and to a lesser extent on your personal situation. Be sure to include maintenance and HOA fees, if any, on the ownership side. Breakeven time on a new roof or a new HVAC unit or an HOA assessment can be years, tipping the scales towards renting. Include the opportunity cost by including the rate of return on the 100k on the renting side (or subtracting it on the ownership side). Be sure to include the tax implications on the ownership side, especially taxes on any profits from the sale. If the numbers say ownership in your area is better, then try for as small of a mortgage as you can get in a growing area. Assuming that the numbers add up to buying: buy small and live frugally, focus on increasing discretionary spending, and using it to pay down debt and then build wealth. If they add up to renting, same thing but rent small.",
"title": ""
},
{
"docid": "76dbbced33adaccadc525e0a0ba9e288",
"text": "\"The ultimate purpose of Case-Schiller is to build contracts that you can use to stop worrying about this, for a price. You or your lender might buy cash settled put options based on the index, and hope that if your home falls in value, the your options become \"\"in the money\"\" to make up the shortfall. The major problem that I can see with this is finding people to take the other side of that contract. Renters would be the primary candidates, but Americans are on average so overweight in real estate that there really isn't anyone underexposed to real estate who would benefit from diversification, and the tax advantage will give people far cheaper avenues address this. Viewed in this light, your question has a sort of obvious answer: Case-Schiller is historical data, and you need to know about the future historical data. Case-Schiller can't do it alone, but you can use futures markets to predict it. Problem you'll have is that the market itself will optimize this temporal trade: if there's a market drop anticipated, the market will charge you more for market drop insurance.\"",
"title": ""
},
{
"docid": "04cfc11786b1d6c8709679a6c244060f",
"text": "Assuming that you have capital gains, you can expect to have to pay taxes on them. It might be short term, or long term capital gains. If you specify exactly which shares to sell, it is possible to sell mostly losers, thus reducing or eliminating capital gains. There are separate rules for 401K and other retirement programs regarding down payments for a house. This leads to many other issues such as the hit your retirement will take.",
"title": ""
},
{
"docid": "b240bf3f322d93678d50fc93a1738b58",
"text": "Capital losses from the sale of stocks can be used to offset capital gains from the sale of a house, assuming that house was a rental property the whole time. If it was your principal residence, the capital gains are not taxed. If you used it as both a rental and a principal residence, then it gets more complicated: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/rsdnc/menu-eng.html",
"title": ""
},
{
"docid": "7581bf8f1cb7cf427aacac0e7886d54e",
"text": "\"This answer is based on Australian tax, which is significantly different. I only offer it in case others want to compare situations. In Australia, a popular tax reduction technique is \"\"Negative Gearing\"\". Borrow from a bank, buy an investment property. If the income frome the new property is not enough to cover interest payments (plus maintenance etc) then the excess each year is a capital loss - which you claim each year, as an offset to your income (ie. pay less tax). By the time you reach retirement, the idea is to have paid off the mortgage. You then live off the revenue stream in retirement, or sell the property for a (taxed) lump sum.\"",
"title": ""
},
{
"docid": "b53f7aa9e406ea773a4b45621660c971",
"text": "Your first home can be up to £450,000 today. But that figure is unlikely to stay the same over 40 years. The government would need to raise it in line with inflation otherwise in 40 years you won't be able to buy quite so much with it. If inflation averages 2% over your 40 year investment period say, £450,000 would buy you roughly what £200,000 would today. Higher rates of inflation will reduce your purchasing power even faster. You pay stamp duty on a house. For a house worth £450,000 that would be around £12,500. There are also estate agent's fees (typically 1-2% of the purchase price, although you might be able to do better) and legal fees. If you sell quickly you'd only be able to access the balance of the money less all those taxes and fees. That's quite a bit of your bonus lost so why did you tie your money up in a LISA for all those years instead of investing in the stock market directly? One other thing to note is that you buy a LISA from your post tax income. You pay into a pension using your pre-tax income so if you're investing for your retirement then a pension will start with a 20% bonus if you're a lower rate taxpayer and a whopping 40% bonus if you're a higher rate taxpayer. If you're a higher rate taxpayer a pension is much better value.",
"title": ""
},
{
"docid": "c8e90732e325599af6175216e695a35f",
"text": "It would be better for you to sell yourself and pay capital gains tax than to transfer to your parents and pay the gift tax. Also, sham transfer (you transfer to your mother only so that she could sell and transfer back to you without you paying taxes) will be probably categorized as tax evasion, which is a criminal offense that could lead to your deportation. What the US should or should not claim you can take to your congressman, but the fact is that the US does claim tax on capital gains even if you bought the asset before becoming US tax resident, and that's the current law.",
"title": ""
},
{
"docid": "18709a398b2b7066a205463a07181a42",
"text": "There's a couple issues to consider: When you sell your primary home, the IRS gives you a $500k exemption (married, filing jointly) on gain. If you decide not to sell your current house now, and you subsequently fall outside the ownership/use tests, then you may owe taxes on any gains when you sell the house. Rather than being concerned about your net debt, you should be concerned about your monthly debt payments. Generally speaking, you cannot have debt payments of more than 36% of your monthly income. If you can secure a renter for your current property, then you may be able to reach this ratio for your next (third) property. Also, only 75% of your expected monthly rental income is considered for calculating your 36% number. (This is not an exhaustive list of risks you expose yourself to). The largest risk is if you or your spouse find yourself without income (e.g. lost job, accident/injury, no renter), then you may be hurting to make your monthly debt payments. You will need to be confident that you can pay all your debts. A good rule that I hear is having the ability to pay 6 months worth of debt. This may not necessarily mean having 6 months worth of cash on hand, but access to that money through personal lines of credit, borrowing against assets, selling stocks/investments, etc. You also want to make sure that your insurance policies fully cover you in the event that a tenant sues you, damages property, etc. You also don't want to face a situation where you are sued because of discrimination. Hiring a property management company to take care of these things may be a good peace-of-mind.",
"title": ""
},
{
"docid": "aae1e5e2604e7ef112e1abe3a414971f",
"text": "IBAN is enough within SEPA and it should be so for your bank as well. Tell them to join our decade, or change bank. I received bank transfers from other continents to my SEPA account in the past and I don't remember ever needing to say more than my IBAN and BIC. Banks can ask all sorts of useless information, but if your bank doesn't have a standard (online) form for the operation then it probably means you're going to spend a lot.",
"title": ""
}
] |
fiqa
|
e8bbcf91ae40d415a585146e1ca3f8db
|
How can I profit on the Chinese Real-Estate Bubble?
|
[
{
"docid": "7f827721412df38aabe25fe0136f47c0",
"text": "\"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.\"",
"title": ""
},
{
"docid": "0432509d0463cf57dfe90785b82f0d78",
"text": "Create, market and perform seminars advising others how to get rich from the Chinese Real-Estate Bubble. Much more likely to be profitable; and you can do it from the comfort of your own country, without currency conversions.",
"title": ""
}
] |
[
{
"docid": "133154f62f8331a8df866bfc4aab2f0b",
"text": "\"The trade-off seems to be quite simple: \"\"How much are you going to get if you sell it\"\" against \"\"How much are you going to get if you rent it out\"\". Several people already hinted that the rental revenue may be optimistic, I don't have anything to add to this, but keep in mind that if someone pays 45k for your apartment, the net gains for you will likely be lower as well. Another consideration would be that the value of your apartment can change, if you expect it to rise steadily you may want to think twice before selling. Now, assuming you have calculated your numbers properly, and a near 0% opportunity cost: 45,000 right now 3,200 per year The given numbers imply a return on investment of 14 years, or 7.1%. Personal conclusion: I would be surprised if you can actually get a 3.2k expected net profit for an apartment that rents out at 6k per year, but if you are confident the reward seems to be quite nice.\"",
"title": ""
},
{
"docid": "2827cf778c230ac62baa016936a44c42",
"text": "Serious answer: If 7 banks owned the vast majority of houses for sale -- that is, on their balance sheet, at the peak of the housing bubble -- there would be. These 7 LCD companies produced the majority of LCDs globally. Real estate is far more decentralized, and in many times the bank merely provided financing for a third-party sale (from the builder, from any one of a hundred or so real estate companies, etc). (But I am assuming you probably weren't looking for a factual answer, anyway.)",
"title": ""
},
{
"docid": "5af78f8ae516b739e9b1687d9f881c08",
"text": "The right time to buy real estate is easy to spot. It's when it is difficult to get loans or when real estate agents selling homes are tripping over each other. It's the wrong time to buy when houses are sold within hours of the sign going up. The way to profit from equities over time is to dollar-cost average a diversified portfolio over time, while keeping cash reserves of 5-15% around. When major corrections strike, buy a little extra. You can make money at trading. But it requires that you exert a consistent effort and stay up to date on your investments and future prospects.",
"title": ""
},
{
"docid": "1d3076b1b2a9e936b239cfe2cddfc971",
"text": "It is worth noting first that Real Estate is by no means passive income. The amount of effort and cost involved (maintenance, legal, advertising, insurance, finding the properties, ect.) can be staggering and require a good amount of specialized knowledge to do well. The amount you would have to pay a management company to do the work for you especially with only a few properties can wipe out much of the income while you keep the risk. However, keshlam's answer still applies pretty well in this case but with a lot more variability. One million dollars worth of property should get you there on average less if you do much of the work yourself. However, real estate because it is so local and done in ~100k chunks is a lot more variable than passive stocks and bonds, for instance, as you can get really lucky or really unlucky with location, the local economy, natural disasters, tenants... Taking out loans to get you to the million worth of property faster but can add a lot more risk to the process. Including the risk you wouldn't have any money on retirement. Investing in Real Estate can be a faster way to retirement than some, but it is more risky than many and definitely not passive.",
"title": ""
},
{
"docid": "5bf3487c2e9cffeaedd48bd6196fafaa",
"text": "\"China's regulators, it seems, are on the attack. Guo Shuqing, chairman of the China Banking Regulatory Commission, announced recently that he'd resign if he wasn't able to discipline the banking system. Under his leadership, the CBRC is stepping up scrutiny of the role of trust companies and other financial institutions in helping China's banks circumvent lending restrictions. The People's Bank of China has also been on the offensive. It has recently raised the cost of liquidity, attacked riskier funding structures among smaller banks, and discontinued a program that effectively monetized one-fifth of last year's increase in lending. Are the regulators finally getting serious about reining in credit creation? The answer is an easy one: Yes if they're willing to allow economic growth to slow substantially, probably to 3 percent or less, and no if they aren't. inRead invented by Teads This is because there's a big difference between China's sustainable growth rate, based on rising demand driven by household consumption and productive investment, and its actual GDP growth rate, which is boosted by massive lending to fund investment projects that are driven by the need to generate economic activity and employment. Economists find it very difficult to formally acknowledge the difference between the two rates, and many don't even seem to recognize that it exists. Yet this only shows how confused economists are about gross domestic product more generally. The confusion arises because a country's GDP is not a measure of the value of goods and services it creates but rather a measure of economic activity. In a market economy, investment must create enough additional productive capacity to justify the expenditure. If it doesn't, it must be written down to its true economic value. This is why GDP is a reasonable proxy in a market economy for the value of goods and services produced. But in a command economy, investment can be driven by factors other than the need to increase productivity, such as boosting employment or local tax revenue. What's more, loss-making investments can be carried for decades before they're amortized, and insolvency can be ignored. This means that GDP growth can overstate value creation for decades. That's what has happened in China. In the first quarter of 2017, China added debt equal to more than 40 percentage points of GDP -- an amount that has been growing year after year. In 2011, the World Economic Forum predicted that China's debt would increase by a worrying $20 trillion by 2020. By 2016, it had already increased by $22 trillion, according to the most conservative estimates, and at current rates it will increase by as much as $50 trillion by 2020. These numbers probably understate the reality. If all this debt hasn't boosted China's GDP growth to substantially more than its potential growth rate, then what was the point? And why has it proven so difficult for the government to rein it in? It has promised to do so since 2012, yet credit growth has only accelerated, reaching some of the highest levels ever seen for a developing country. The answer is that credit creation had to accelerate to boost GDP growth above the growth rate of productive capacity. Much, if not most, of China's 6.5 percent GDP growth is simply an artificial boost in economic activity with no commensurate increase in the capacity to create goods and services. It must be fully reversed once credit stops growing. To make matters worse, if high debt levels generate financial distress costs for the economy -- as already seems to be happening -- the amount that must be reversed will substantially exceed the original boost. Once credit is under control, China will have lower but healthier GDP growth rates. If the economy rebalances, most Chinese might not even notice: It would require that household income -- which has grown much more slowly than GDP for nearly three decades -- now grow faster, so that the sharp slowdown in economic growth won't be matched by an equivalent slowdown in wage growth. Clear thinking from leading voices in business, economics, politics, foreign affairs, culture, and more. Share the View Enter your email Sign Up But to manage this rebalancing requires substantial transfers of wealth from local governments to ordinary households to boost consumption. This is why China hasn't been able to control credit growth in the past. The central government has had to fight off provincial \"\"vested interests,\"\" who oppose any substantial transfer of wealth. Without these transfers, slower GDP growth would mean higher unemployment. Whether regulators can succeed in reining in credit creation this time is ultimately a political question, and depends on the central government's ability to force through necessary reforms. Until then, as long as China has the debt capacity, GDP growth rates will remain high. But to see that as healthy is to miss the point completely.\"",
"title": ""
},
{
"docid": "cdc8ee4b63ae9ac426fd4dad8942a239",
"text": "Huh, well it's working for me. I've got 3 properties and am a little over 25% of my goal to never work again. How would you suggest one get rich? I assume you have a better plan than he does?",
"title": ""
},
{
"docid": "cd0b25899dfe8a0d7965310d6cfc769b",
"text": "Playing the markets is simple...always look for the sucker in the room and outsmart him. Of course if you can't tell who that sucker is it's probably you. If the strategy you described could make you rich, cnbc staff would all be billionaires. There are no shortcuts, do your research and decide on a strategy then stick to it in all weather or until you find a better one.",
"title": ""
},
{
"docid": "e0b589d58e89dc2487eaf6e429674240",
"text": "\"Americans are snapping, like crazy. And not only Americans, I know a lot of people from out of country are snapping as well, similarly to your Australian friend. The market is crazy hot. I'm not familiar with Cleveland, but I am familiar with Phoenix - the prices are up at least 20-30% from what they were a couple of years ago, and the trend is not changing. However, these are not something \"\"everyone\"\" can buy. It is very hard to get these properties financed. I found it impossible (as mentioned, I bought in Phoenix). That means you have to pay cash. Not everyone has tens or hundreds of thousands of dollars in cash available for a real estate investment. For many Americans, 30-60K needed to buy a property in these markets is an amount they cannot afford to invest, even if they have it at hand. Also, keep in mind that investing in rental property requires being able to support it - pay taxes and expenses even if it is not rented, pay to property managers, utility bills, gardeners and plumbers, insurance and property taxes - all these can amount to quite a lot. So its not just the initial investment. Many times \"\"advertised\"\" rents are not the actual rents paid. If he indeed has it rented at $900 - then its good. But if he was told \"\"hey, buy it and you'll be able to rent it out at $900\"\" - wouldn't count on that. I know many foreigners who fell in these traps. Do your market research and see what the costs are at these neighborhoods. Keep in mind, that these are distressed neighborhoods, with a lot of foreclosed houses and a lot of unemployment. It is likely that there are houses empty as people are moving out being out of job. It may be tough to find a renter, and the renters you find may not be able to pay the rent. But all that said - yes, those who can - are snapping.\"",
"title": ""
},
{
"docid": "1695261b4ee40cb33966686a30309dac",
"text": "Well, Taking a short position directly in real estate is impossible because it's not a fungible asset, so the only way to do it is to trade in its derivatives - Investment Fund Stock, indexes and commodities correlated to the real estate market (for example, materials related to construction). It's hard to find those because real estate funds usually don't issue securities and rely on investment made directly with them. Another factor should be that those who actually do have issued securities aren't usually popular enough for dealers and Market Makers to invest in it, who make it possible to take a short position in exchange for some spread. So what you can do is, you can go through all the existing real estate funds and find out if any of them has a broker that let's you short it, in other words which one of them has securities in the financial market you can buy or sell. One other option is looking for real estate/property derivatives, like this particular example. Personally, I would try to computationally find other securities that may in some way correlate with the real estate market, even if they look a bit far fetched to be related like commodities and stock from companies in construction and real estate management, etc. and trade those because these have in most of the cases more liquidity. Hope this answers your question!",
"title": ""
},
{
"docid": "99c930926902e10d8b135a90ddfbcc9a",
"text": "THANK YOU so much! That is exactly what I was looking for. Unfortunately I'm goign to be really busy for 7 days but I'd love to tear through some of this material and ask you some questions if you don't mind. What do you do for a living now? Still in real estate? Did you go toward the brokerage side or are you still consulting? What's the atmosphere/day-to-day like?",
"title": ""
},
{
"docid": "51efd4c92fe5580c043a1793767c9e62",
"text": "No, there is no linkage to the value of real estate and inflation. In most of the United States if you bought at the peak of the market in 2006, you still haven't recovered 7+ years later. Also real estate has a strong local component to the price. Pick the wrong location or the wrong type of real estate and the value of your real estate will be dropping while everybody else sees their values rising. Three properties I have owned near Washington DC, have had three different price patterns since the late 80's. Each had a different starting and ending point for the peak price rise. You can get lucky and make a lot, but there is no way to guarantee that prices will rise at all during the period you will own it.",
"title": ""
},
{
"docid": "001ad7f8030aa55b992aab75c2bd3b7d",
"text": "This is one way in which the scheme could work: You put your own property (home, car, piece of land) as a collateral and get a loan from a bank. You can also try to use the purchased property as security, but it may be difficult to get 100% loan-to-value. You use the money to buy a property that you expect will rise in value and/or provide rent income that is larger than the mortgage payment. Doing some renovations can help the value rise. You sell the property, pay back the loan and get the profits. If you are fast, you might be able to do this even before the first mortgage payment is due. So yeah, $0 of your own cash invested. But if the property doesn't rise in value, you may end up losing the collateral.",
"title": ""
},
{
"docid": "3fe13b33eb0c57418a1a75e14034bc8e",
"text": "I know there are a lot of papers on bubbles already, but I was always interested in how many were retail/individually driven vs institutionally driven bubbles - at least who plays a larger role. The American pension crisis is also another interesting topic that may be fun to write about. With everyone calling doomsday on them, maybe you can shed some light on some (if any) of the bs or touch on what options they may actually have to survive. Topics on investor behaviour is always a safe bet - potential returns lost due to home bias, investment behaviour of millennials, bla bla bla. The dangers of the rise of passive investments (ETFs) if any & if it actually generates more room to capture alpha since there may be greater inefficiencies. Also the impact of a stock's return relative to the amount of ETFs it is a constituent of So many things - pls advise what you end up deciding to choose and post the paper when the time comes!",
"title": ""
},
{
"docid": "1372eca98843f33d82d53e28b69a5f0b",
"text": "\"No, it can really not. Look at Detroit, which has lost a million residents over the past few decades. There is plenty of real estate which will not go for anything like it was sold. Other markets are very risky, like Florida, where speculators drive too much of the price for it to be stable. You have to be sure to buy on the downturn. A lot of price drops in real estate are masked because sellers just don't sell, so you don't really know how low the price is if you absolutely had to sell. In general, in most of America, anyway, you can expect Real Estate to keep up with inflation, but not do much better than that. It is the rental income or the leverage (if you buy with a mortgage) that makes most of the returns. In urban markets that are getting an influx of people and industry, however, Real Estate can indeed outpace inflation, but the number of markets that do this are rare. Also, if you look at it strictly as an investment (as opposed to the question of \"\"Is it worth it to own my own home?\"\") there are a lot of additional costs that you have to recoup, from property taxes to bills, rental headaches etc. It's an investment like any other, and should be approached with the same due diligence.\"",
"title": ""
},
{
"docid": "9183b4c1428a12698926e2e6ad9e4e91",
"text": "A possibility could be real estate brokerage firms such as Realogy or Prudential. Although a brokerage commission is linked to the sale prices it is more directly impacted by sales volume. If volume is maintained or goes up a real estate brokerage firm can actually profit rather handsomely in an up market or a down market. If sales volume does go up another option would be other service markets for real estate such as real estate information and marketing websites and sources i.e. http://www.trulia.com. Furthermore one can go and make a broad generalization such as since real estate no longer requires the same quantity of construction material other industries sensitive to the price of those commodities should technically have a lower cost of doing business. But be careful in the US much of the wealth an average american has is in their home. In this case this means that the economy as a whole takes a dive due to consumer uncertainty. In which case safe havens could benefit, may be things like Proctor & Gamble, gold, or treasuries. Side Note: You can always short builders or someone who loses if the housing market declines, this will make your investment higher as a result of the security going lower.",
"title": ""
}
] |
fiqa
|
24664055060a6aaa6c505fc8e2b5477b
|
What is a trust? What are the different types of trusts?
|
[
{
"docid": "9d859a3bcad74bed5feaf81ba543dc81",
"text": "Trusts are a way of holding assets with a specific goal in mind. At its simplest, a trust can be used to avoid probate, a sometimes lengthy process in which a will is made public along with the assets bequeathed. A trust allows for fast transfer and no public disclosure. Depending on the current estate tax laws (the death tax) a trust can help preserve an estate exemption. e.g. Say the law reverts back to a $1M exemption. Note, this is $1M per deceased person, not per beneficiary. My wife and I happened to have assets of exactly $2M, and I die tomorrow. Now she has $2M, and when she passes, the estate has that $2M and estate taxes are based on this total, $1M fully taxed. But - If we set up trusts, that first million can be put into trust on my death, the interest and some principal going to the surviving spouse each year, but staying out of the survivor's estate. Second spouse dies, little or no tax due. This is known as a bypass trust. Another example is a spendthrift trust. Say, hypothetically, my sister in law can't save a nickel to save her life. Spends every dime and then some. So the best thing my mother in law can do to provide for her is to leave her estate in trust with specific instructions on how to distribute some percent each year. This is not a tax dodge of any kind, it's strictly to protect the daughter from her own irresponsibility. A medical needs trust is a variant of the above. It can provide income to a disabled person without impacting their government benefits adversely. This scratches the surface, illustrating how trusts can be used, there are more variation on this, but I believe it covers the basics. With the interest in this topic, I'm adding another issue where the trust can be useful. In my article On my Death, Please, Take a Breath I described how an inherited IRA was destroyed by ignorance. The beneficiary, fearing the stock market, withdrew it all and was nailed by taxes. He was on social security and no other income, so by taking small withdrawals each year would have had nearly no tax due. (and could have avoided 'market' risk by selling within the IRA and buying treasuries or CDs.) He didn't need a trust of course, just education. The deceased, his sister, might have used a Trust to manage the IRA and enforce limited withdrawals. Mixing IRAs and trust is complex, but the choice between a $2000 expense to create a trust or the $40K tax bill he got is pretty clear to me. He took pride in having sold out as the market soon tanked, but he could have avoided the tax loss as well. He was confusing the account (In this case an IRA, but it could have been a 401(k) or other retirement account) with the investments it contained. One can, and should, keep the IRA in tact, and simply adjust the allocation according to one's comfort level. Note - Inheritance tax laws change frequently, and my answer above was an attempt to be generic. The current (2014) code allows $5.34M to be left by one decedent with no estate tax.",
"title": ""
},
{
"docid": "d54c82ed709c7099785a447c4bbbc930",
"text": "\"From a more technical point of view, a trust is a legal relationship between 3 parties: Trusts can take many forms. People setup trusts to ensure that property is used in a specific way. Owning a home with a spouse is a form of a trust. A pension plan is a trust. Protecting land from development often involves placing it in trust. Wealthy people use trusts for estate planning for a variety of reasons. There's no \"\"better\"\" or \"\"best\"\" trust on a general level... it all depends on the situation that you are in and the desired outcome that you are looking for.\"",
"title": ""
},
{
"docid": "4980192c3f779c441f64ac1c8d84fc17",
"text": "A trust is a financial arrangement to put aside money over a period of time (typically years), for a specific purpose to benefit someone. Two purposes of trusts are 1) providing for retirement and 2) providing for a child or minor. There are three parties to a trust: 1) A grantor, the person who establishes and funds a trust. 2) A beneficiary, a person who receives the benefits. 3) a trustee, someone who acts in a fiduciary capacity between the grantor and beneficiary. No one person can be all three parties. A single person can be two of out those three parties. A RETIREMENT trust is something like an IRA (individual retirement account). Here, a person can be both the grantor (contributor) to the IRA, and the beneficiary (a withdrawer after retirement). But you need a bank or a broker to act as a fiduciary, and to handle the reporting to the IRS (Internal Revenue Service). Pension plans have employers as grantors, employees as beneficiaries, and (usually) a third party as trustee. A MINORS' trust can be established under a Gift to the Minors' Act, or other trust mechanisms, such as a Generation Skipping Trust. Here, a parent may be both grantor and trustee (although usually a third party is a trustee). A sum of money is put aside over a period of years for the benefit of a minor, for a college education, or for the minor's attaining a certain age: a minimum of 18, sometimes 21, possibly 25 or even older, depending on when the grantor feels that the minor is responsible enough to handle the money.",
"title": ""
}
] |
[
{
"docid": "3a97262d6ff24db07098eec81b46e354",
"text": "CDS is the spread you pay in order to get protection in the event of a bond defaulting. I.e., eliminating your credit risk. Contrast this with ASW/OAS/Z-spread/Spread-to-bench which looks at the excess risk of a bond over the benchmark curve/yield. It's essentially looking at the same idea but derived differently. Theoretically they move in the same direction but divergence can be an opportunity. Look up CDS basis.",
"title": ""
},
{
"docid": "7488478ce920b35c3d40540eac3f9dfc",
"text": "Most modern bank accounts can be set up to automatically pay bills for anyone, even someone who has no control over the account. This account would be in a trustee's name for the untrustworthy party. An automatic transfer could be set up from the source account to the irresponsible party's bank account to pay their allowance. It would be wise to remove all overdraft capability from the recipients account, but the whole system might help them learn some responsibility. There are more formal legal structures for forming a long term care-taking trust (with spendthrift provisions to protect the trust from legal action). The trust would need to be maintained by a trustee, resulting in maintenance fees on the principle. It might also help to know if there are legally recognized factors that impair the beneficiaries ability to take care of themselves (substance abuse, depression, age, mental impairment, etc.), but depending on state law, trusts can be designed very flexibly to cover the lifetime of an heir and even their heirs.",
"title": ""
},
{
"docid": "35225d0a370f3f2150e1a2577173389d",
"text": "\"I am not a lawyer, and I am assuming trusts in the UK work similar to the way they work in the US... A trust is a legally recognized entity that can act in business transactions much the same way as a person would (own real property, a business, insurance, investments, etc.). The short answer is the trust is the owner of the property. The trust is established by a Grantor who \"\"funds\"\" the trust by transferring ownership of items from him or herself (or itself, if another trust or business entity like a corporation) to the trust. A Trustee is appointed (usually by the Grantor) to manage the trust according to the conditions and terms specified in the trust. A Trustee would be failing in their responsibility (their fiduciary duty) if they do not act in accordance with the purposes of the trust. (Some trusts are written better than others, and there may or may not be room for broad interpretation of the purposes of the trust.) The trust is established to provide some benefit to the Beneficiary. The beneficiary can be anyone or anything, including another trust. In the US, a living trust is commonly used as an estate planning tool, where the Grantor, Trustee, and Beneficiary are the same person(s). At some point, due to health or other reasons, a new trustee can be appointed. Since the trust is a separate entity from the grantor and trustee, and it owns the assets, it can survive the death of the grantor, which makes it an attractive way to avoid having to probate the entire estate. A good living trust will have instructions for the Trustee on what to do with the assets upon the death of the Grantor(s).\"",
"title": ""
},
{
"docid": "a0a18cc899a00d5fae3a6011f519d2c1",
"text": "\"A REIT is a real estate investment trust. It is a company that derives most of its gross income from and holds most of its assets in real estate investments, which, in this case, include either real property, mortgages, or both. They provide a way for investors to get broad exposure in a real estate market without going to buy a bunch of properties themselves. It also provides diversification within the real estate segment since REITs will often (but not necessarily) have either way more properties than an individual could get or have very large properties (like a few resorts) that would be too expensive for any one investor. By law, they must pay at least 90% of their taxable income as dividends to investors, so they typically have a good dividend rate (possibly but not necessarily) at the expense of growth of the stock price. Some of those dividends may be tax advantaged and some will not. An MLP is a master limited partnership. These trade on the exchange like corporations, but they are not corporations. (Although often used in common language as synonyms, corporation and company are not the same thing. Corporation is one way to organize a company under the law.) They are partnerships, and when you buy a share you become a partner in the company. This is an alternative form of ownership to being a shareholding. In this case you are a limited partner, which means that you have limited liability as with stock. The shares may appreciate or not, just like a stock, and you can generally sell them back to the market for a capital gain or loss under the same rules as a stock. The main difference here from a practical point of view is taxes: Partnerships (of any type) do no pay tax - Instead their income and costs are passed to the individual partners, who must then include it on their personal returns (Form 1040, Schedule E). The partnership will send each shareholder a Schedule K-1 form at tax time. This means you may have \"\"phantom income\"\" that is taxable even though cash never flowed through your hands since you'll have to account for the income of the partnership. Many partnerships mitigate this by making cash distributions during the year so that the partners do actually see the cash, but this is not required. On the other hand, if it does happen, it's often characterized as a return of capital, which is not taxable in the year that you receive it. A return of capital reduces your cost basis in the partnership and will eventually result in a larger capital gain when you sell your shares. As with any investment, there are pros and cons to each investment type. Of the two, the MLP is probably less like a \"\"regular\"\" stock since getting the Schedule K-1 may require some extra work at tax time, especially if you've never seen one before. On the other hand, that may be worth it to you if you can find one that's appreciating in value and still returning capital at a good rate since this could be a \"\"best of everything\"\" situation where you defer tax and - when you eventually do pay, you pay at favorable capital gains rates - but still manage to get your cash back in hand before you sell. (In case not clear, my comments about tax are specific to the US. No idea how this is treated elsewhere.) By real world example, I guess you meant a few tickers in each category? You can find whole lists online. I just did a quick search (\"\"list of MLP\"\" and \"\"list of REIT\"\"), found a list, and have provided the top few off of the first list that I found. The lists were alphabetical by company name, so there's no explicit or implicit endorsement of these particular investments. Examples of REIT: Examples of MLP:\"",
"title": ""
},
{
"docid": "a2384963ed3c4bc5234386ab8f6ff4ab",
"text": "An investment trust is quoted just like a share. You just compare what you paid (your book cost) with its current share price, not the NAV, as a trust's price can be at a premium greater than the actual share price or a discount.",
"title": ""
},
{
"docid": "82e4a219be65afcddb94527e7ceb52fb",
"text": "\"What is a 403b? A 403(b) plan is a tax-advantaged retirement savings plan available for public education organizations, some non-profit employers (only US Tax Code 501(c)(3) organizations), cooperative hospital service organizations and self-employed ministers in the United States. Kind of a rare thing. A bit more here: http://www.sec.gov/investor/pubs/teacheroptions.htm under investment options Equity Indexed Annuities are a special type of contract between you and an insurance company. During the accumulation period — when you make either a lump sum payment or a series of payments — the insurance company credits you with a return that is based on changes in an equity index, such as the S&P 500 Composite Stock Price Index. The insurance company typically guarantees a minimum return. Guaranteed minimum return rates vary. After the accumulation period, the insurance company will make periodic payments to you under the terms of your contract, unless you choose to receive your contract value in a lump sum. For more information, please see our \"\"Fast Answer\"\" on Equity Indexed Annuities, and read FINRA's investor alert entitled Equity-Indexed Annuitiies — A Complex Choice. So perhaps \"\"equity indexed annuities\"\" is the more correct thing to search for and not \"\"insurance funds\"\"?\"",
"title": ""
},
{
"docid": "c1c4dca07594fa3b2c1b7bc039462dd7",
"text": "\"My teacher always says the property interest the beneficiary \"\"holds\"\" or \"\"possesses\"\" is an equitable interest. I might just seem out of place here because it's a legal term and probably not commonplace outside that sphere. But the beneficiaries equitable interest is possessed or held in that regard. From this equitable interest is the income stream. If that just seems like a bunch of gibberish to you than don't mind me, just trying to learn the ins and outs of trusts not the world of finance generally.\"",
"title": ""
},
{
"docid": "c784b0db568df3696e51b61a9ba75c06",
"text": "\"They pretty much already have what you are looking for. They are called Unit Investment Trusts. The key behind these is (a) the trust starts out with a fixed pool of securities. It is completely unmanaged and there is no buying or selling of the securities, (b) they terminate after a fixed period of time, at which time all assets are distributed among the owners. According to Investment Company Institute, \"\"securities in a UIT are professionally selected to meet a stated investment objective, such as growth, income, or capital appreciation.\"\" UITs sell a fixed number of units at one-time public offering. Securities in a UIT do not trade actively, rather, UITs use a strategy known as buy-and-hold. The UIT purchases a certain amount of securities and holds them until its termination date. Holdings rarely change throughout the life of the trust so unit holders know exactly what they're investing in, and the trust lists all securities in its prospectus. Unit trusts normally sell redeemable units - this obligates the trust to re-purchase investor's units at their net asset value at the investors request.\"",
"title": ""
},
{
"docid": "4ff798af431d6755b22dcf6694af8ed0",
"text": "\"Ditto to MD-Tech, but from a more \"\"philosophical\"\" point of view: When you buy stock, you own it, just like you own a cell phone or a toaster or a pair of socks that you bought. The difference is that a share of stock means that you own a piece of a corporation. You can't physically take possession of it and put it in your garage, because if all the stock-holders did that, then all the company's assets would be scattered around all the stock-holder's garages and the company couldn't function. Like if you bought a 1/11 share in a football team, you couldn't take one of the football players home and keep him in your closet, because then the team wouldn't be able to function. (I might want to take one of the cheerleaders home, but that's another subject ...) In pre-electronic times, you could get a piece of paper that said, \"\"XYZ Corporation - 1 share\"\". You could take physical possession of this piece of paper and put it in your filing cabinet. I'm not sure if you can even get such certificates any more; I haven't seen one in decades. These days it's just recorded electronically. That doesn't mean that you don't own it. It just means that someone else is keeping the records for you. It's like leaving your car in a parking lot. It's still your car. The people who run the parking lot doesn't own it. They are keeping it for you, but just because they have physical possession doesn't make it theirs.\"",
"title": ""
},
{
"docid": "730426820d883cc22c2fb9d03728ceba",
"text": "\"This is the biggest blunder I see in money handling. \"\"Oh I'm a good person and everyone knows my intentions are good. And they're really happy with me right now, so it'll stay that way forever, right? So I can just do anything and they'll trust me.\"\" And then in hindsight 10 years later, the person realizes \"\"wow, I was really stubborn and selfish to just assume that. No wonder it blew up.\"\" Anyway, to that end, your requirement that all the money be in one account and \"\"this will simplify taxes\"\" is horsepuckey. No one will believe a legitimate financial advisor needs that, but it's exactly what a swindler would do. And that's the problem. If anything goes wrong, their trust in you will be forgotten, some will say you intended to scam all along, and the structure will be the first thing to convict you. Money makes everyone mistrusting. Ironically, the concept is called a \"\"trust\"\", and there's a wide body of law and practice for Person X responsibly handling the money of Person Y. The classic example is Person Y is a corporation (say, a charity) and Person X is on the Board of Directors. It's the same basic thing. The doctrine is:\"",
"title": ""
},
{
"docid": "70eaee756023e7ed25ab28a43bd36cf4",
"text": "This isn't a DIY area. You should talk to a lawyer about setting up a trust. Also, does the irresponsible person acknowledge that they are irresponsible? Are the legally competent? Or are you looking at a 20 year old with a big check coming down?",
"title": ""
},
{
"docid": "cd2eafb19f2a67c46acbf9df9ef82df9",
"text": "\"I remember in the 19th and early 20th century was the problem of Trusts set up by the wealthy to avoid taxes (hence the term \"\"Anti-Trust\"\") That's not what antitrust means. The trusts in that case were monopolies that used their outsized influence to dominate customers and suppliers. They weren't for tax evasion purposes. Trusts were actually older than a permanent income tax. Antitrust law was passed around the same time as a permanent income tax becoming legal. Prior to that income taxes were temporary taxes imposed to pay for wars. The primary ways to evade taxes was to move expenses out of the personal and into businesses or charities. The business could pay for travel, hotels, meals, and expenses. Or a charity could pay for a trip as a promotion activity (the infamous safari to Africa scheme). Charities can pay salaries to employees, so someone could fund a charity (tax deductible) and then use that money to pay people rather than giving gifts. If you declare your house as a historical landmark, a charity could maintain it. Subscribe to magazines at the office and set them in the waiting room after you read them. Use loyalty program rewards from business expenses for personal things. Sign up for a benefit for all employees at a steep discount and pay everyone a little less as a result. Barter. You do something for someone else (e.g. give them a free car), and they return the favor. Call it marketing or promotion (\"\"Trump is carried away from his eponymous Tower in a sparkling new Mercedes Benz limousine.\"\"). Another option is to move income and expenses to another tax jurisdiction that has even fewer laws about it. Where the United States increasingly cracked down on personal expenses masquerading as business expenses, many jurisdictions would be happy just to see the money flow through and sit in their banks briefly. Tax policy is different now than it was then. Many things that would have worked then wouldn't work now. The IRS is more aggressive about insisting that some payments be considered income even if the organization writes the check directly to someone else. It's unclear what would happen if United States tax rates went back to the level they had in the fifties or even the seventies. Would tax evasion become omnipresent again? Or would it stay closer to current levels. The rich actually pay a higher percentage of the overall income taxes now than they did in the forties and fifties. And the rich in the United States pay a higher percentage of the taxes paid than the rich in other countries with higher marginal rates. Some of this may be more rich people in the US than other countries, but tax policy is part of that too. High income taxes make it hard to become rich.\"",
"title": ""
},
{
"docid": "22a58bb6f1803e7765a19450e6a9a536",
"text": "\"Well the People's Trust's IPO prospectus is now (2017-09-08) available for all to read (or there's a smaller \"\"information leaflet\"\"). (May need some disclaimers to be clicked to get access). Both have a \"\"highlights\"\" bullet-point list: Coverage here has a comment thread with some responses by the founder attempting to answer the obvious objection that there's other multi-manager trusts on a discount (e.g Alliance Trust on ~ -5.5%), so why would you buy this one on a (very small) premium? (Update: There's also another recent analysis here.) Personally, I'm thinking the answer to the original question \"\"How is The People's Trust not just another Investment Trust?\"\" is pretty much: \"\"it's just another Investment Trust\"\" (albeit one with its own particular quirks and goals). But good luck to them.\"",
"title": ""
},
{
"docid": "4180907c599dd5750e521afdc53f7aec",
"text": "\"This is the textbook for the course. Probably a little excessive for a casual purchase lol but it literally has everything you would ever need to know about trusts and is like ~1500 pages. Even goes into tax and what isn't a trust relationship for example corporation's assets and other interesting stuff. https://www.amazon.com/Loring-Rounds-Trustees-Handbook-2017/dp/145487158X/ref=sr_1_2?ie=UTF8&qid=1507755967&sr=8-2&keywords=trusts+charles+rounds As far as other sources go I don't really think I am in a position to recommend much as I am still learning. This website: https://www.quimbee.com/activity ; covers a bunch of basic law school courses in general. but again, its a paid subscription but I think it is only like $15 a month. I use it all the time to help me practice and learn the concepts better for various subjects. I'm a 3L now and that website has helped me and also a ton of my friends and has videos which I find much more helpful than just reading walls and walls of legal text. If you did the \"\"Wills, Trusts, and Estates\"\" section, that alone is probably worth the $15 monthly fee. I can even refer you and get a $25 amazon giftcard apparently lol\"",
"title": ""
},
{
"docid": "796b43b97f737d12f389d6b75da86f48",
"text": "\"According to what little information is available currently, this fund is most akin to an actively managed exchange traded fund rather than an investment trust. An investment trust is an actively managed, closed-end fund that is tradeable on the stock market. \"\"Closed-end\"\" means that there are a fixed number of shares available for trading, so if you wish to buy or sell shares in a closed-end fund you need to find someone willing to sell or buy shares. \"\"Actively managed\"\" means that the assets are selected by the fund managers in the belief that they will perform well. This is in contrast to a \"\"passively managed\"\" fund which simply tracks an underlying index. The closed-end nature of investment trusts means that the share price is not well correlated to the value of the underlying assets. Indeed, almost all UK investment trusts trade at a significant discount to their net asset value. This reflects their historic poor performance and relatively weak liquidity. Of course there are some exceptions to this. Examples of open-end funds are unit trust (US = mutual funds) and ETFs (exchange traded funds). They are \"\"open-end\"\" funds in the sense that the number of shares/units available will change according to demand. Most importantly, the price of a share/unit will be strongly correlated to the net asset value of the underlying portfolio. In general, for an open-end fund, if the net asset value of the fund is X and there are Y shares/units outstanding, then the price of a share/unit will be X/Y. Historic data shows that passively managed funds (index trackers) \"\"always\"\" outperform actively managed funds in the long term. One of the big issues with actively managed funds is they have relatively high management fees. The Peoples Trust will be charging about 1% with a promise that this should come down over time. Compare this to a fee of 0.05% on a large, major market index tracking ETF. Further, the 1% headline fee being touted by Peoples Trust is a somewhat misleading, since they are paying their employees bonuses with shares in the fund. This will cause dilution of the net asset value per share and can be read as addition management fees by proxy. Since competent fund managers will demand high incomes, bonus shares could easily double the management fees, depending on the size of the fund. In summary, history has shown that the promises of active fund managers rarely (if ever) come to fruition. Personally, I would not consider this to be an attractive investment and would look more towards a passively managed major market index ETF with low management fees.\"",
"title": ""
}
] |
fiqa
|
493466c15ce59179f1c7127f7dc3c59c
|
Basic index fund questions
|
[
{
"docid": "189960f9f192a13e5477662a6ef48f0f",
"text": "\"There are no guarantees in the stock market. The index fund can send you a prospectus which shows what their results have been over the past decade or so, or you can find that info on line, but \"\"past results are not a guarantee of future performance\"\". Returns and risk generally trade off against each other; trying for higher than average results requires accepting higher than usual risk, and you need to decide which types of investments, in what mix, balance those in a way you are comfortable with. Reinvested dividends are exactly the same concept as compounded interest in a bank account. That is, you get the chance to earn interest on the interest, and then interest on the interest on the interest; it's a (slow) exponential growth curve, not just linear. Note that this applies to any reinvestment of gains, not just automatic reinvestment back into the same fund -- but automatic reinvestment is very convenient as a default. This is separate from increase in value due to growth in value of the companies. Yes, you will get a yearly report with the results, including the numbers needed for your tax return. You will owe income tax on any dividends or sales of shares. Unless the fund is inside a 401k or IRA, it's just normal property and you can sell or buy shares at any time and in any amount. Of course the advantage of investing through those special retirement accounts is advantageous tax treatment, which is why they have penalties if you use the money before retirement. Re predicting results: Guesswork and rule of thumb and hope that past trends continue a bit longer. Really the right answer is not to try to predict precise numbers, but to make a moderately conservative guess, hope you do at least that well, and be delighted if you do better... And to understand that you can lose value, and that losses often correct themselves if you can avoid having to sell until prices have recovered. You can, of course, compute historical results exactly, since you know how much you put in when, how much you took out when, and how much is in the account now. You can either look at how rate of return varied over time, or just compute an average rate of return; both approaches can be useful when trying to compare one fund against another... I get an approximate version of this reported by my financial management software, but mostly ignore it except for amusement and to reassure myself that things are behaving approximately as expected. (As long as I'm outperforming what I need to hit my retirement goals, I'm happy enough and unwilling to spend much more time on it... and my plans were based on fairly conservative assumptions.) If you invest $3k, it grows at whatever rate it grows, and ten years later you have $3k+X. If you then invest another $10k, you now have $3k+X+10k, all of which grows at whatever rate the fund now grows. When you go to sell shares or fractional shares, your profit has to be calculated based on when those specific shares were purchased and how much you paid for them versus when they were sold and how much you sold them for; this is a more annoying bit of record keeping and accounting than just reporting bank account interest, but many/most brokerages and investment banks will now do that work for you and report it at the end of the year for your taxes, as I mentioned.\"",
"title": ""
}
] |
[
{
"docid": "979158a3361ada6e39994e1e8d9d4f5e",
"text": "\"Instead of using the actual index, use a mutual fund as a proxy for the index. Mutual funds will include dividend income, and usually report data on the value of a \"\"hypothetical $10,000 investment\"\" over the life of the fund. If you take those dollar values and normalize them, you should get what you want. There are so many different factors that feed into general trends that it will be difficult to draw conclusions from this sort of data. Things like news flow, earnings reporting periods, business cycles, geopolitical activity, etc all affect the various sectors of the economy differently.\"",
"title": ""
},
{
"docid": "aa0ef326df4465ff87ce2aea2d17493a",
"text": "What is your time horizon? Over long horizons, you absolutely want to minimise the expense ratio – a seemingly puny 2% fee p.a. can cost you a third of your savings over 35 years. Over short horizons, the cost of trading in and trading out might matter more. A mutual fund might be front-loaded, i.e. charge a fixed initial percentage when you first purchase it. ETFs, traded daily on an exchange just like a stock, don't have that. What you'll pay there is the broker commission, and the bid-ask spread (and possibly any premium/discount the ETF has vis-a-vis the underlying asset value). Another thing to keep in mind is tracking error: how closely does the fond mirror the underlying index it attempts to track? More often than not it works against you. However, not sure there is a systematic difference between ETFs and funds there. Size and age of a fund can matter, indeed - I've had new and smallish ETFs that didn't take off close down, so I had to sell and re-allocate the money. Two more minor aspects: Synthetic ETFs and lending to short sellers. 1) Some ETFs are synthetic, that is, they don't buy all the underlying shares replicating the index, actually owning the shares. Instead, they put the money in the bank and enter a swap with a counter-party, typically an investment bank, that promises to pay them the equivalent return of holding that share portfolio. In this case, you have (implicit) credit exposure to that counter-party - if the index performs well, and they don't pay up, well, tough luck. The ETF was relying on that swap, never really held the shares comprising the index, and won't necessarily cough up the difference. 2) In a similar vein, some (non-synthetic) ETFs hold the shares, but then lend them out to short sellers, earning extra money. This will increase the profit of the ETF provider, and potentially decrease your expense ratio (if they pass some of the profit on, or charge lower fees). So, that's a good thing. In case of an operational screw up, or if the short seller can't fulfil their obligations to return the shares, there is a risk of a loss. These two considerations are not really a factor in normal times (except in improving ETF expense ratios), but during the 2009 meltdown they were floated as things to consider. Mutual funds and ETFs re-invest or pay out dividends. For a given mutual fund, you might be able to choose, while ETFs typically are of one type or the other. Not sure how tax treatment differs there, though, sorry (not something I have to deal with in my jurisdiction). As a rule of thumb though, as alex vieux says, for a popular index, ETFs will be cheaper over the long term. Very low cost mutual funds, such as Vanguard, might be competitive though.",
"title": ""
},
{
"docid": "bc8f593c174368c4c817cd8ea5e13e90",
"text": "Picking yourself is just what all the fund managers are trying to do, and history shows that the majority of them fails the majority of the time to beat the index fund. That is the core reason of the current run after index funds. What that means is that although it doesn’t sound so hard, it is not easy at all to beat an index consistently. Of course you can assume that you are better than all those high-paid specialists, but I would have some doubt. You might be luckier, but then you might be not.",
"title": ""
},
{
"docid": "9ba51d2d9ec2c4cf2b1e53d4321ceaf5",
"text": "\"Funds - especially index funds - are a safe way for beginning investors to get a diversified investment across a lot of the stock market. They are not the perfect investment, but they are better than the majority of mutual funds, and you do not spend a lot of money in fees. Compared to the alternative - buying individual stocks based on what a friend tells you or buying a \"\"hot\"\" mutual fund - it's a great choice for a lot of people. If you are willing to do some study, you can do better - quite a bit better - with common stocks. As an individual investor, you have some structural advantages; you can take significant (to you) positions in small-cap companies, while this is not practical for large institutional investors or mutual fund managers. However, you can also lose a lot of money quickly in individual stocks. It pays to go slow and to your homework, however, and make sure that you are investing, not speculating. I like fool.com as a good place to start, and subscribe to a couple of their newsletters. I will note that investing is not for the faint of heart; to do well, you may need to do the opposite of what everybody else is doing; buying when the market is down and selling when the market is high. A few people mentioned the efficient market hypothesis. There is ample evidence that the market is not efficient; the existence of the .com and mortgage bubbles makes it pretty obvious that the market is often not rationally valued, and a couple of hedge funds profited in the billions from this.\"",
"title": ""
},
{
"docid": "d6d52b842cc2405c33403cbfcbd53cbb",
"text": "\"The root of the advice Bob is being given is from the premise that the market is temporarily down. If the market is temporarily down, then the stocks in \"\"Fund #1\"\" are on-sale and likely to go up soon (soon is very subjective). If the market is going to go up soon (again subjective) you are probably better in fictitious Fund #1. This is the valid logic that is being used by the rep. I don't think this is manipulative based on costs. It's really up to Bob whether he agrees with that logic or if he disagrees with that logic and to make his own decision based on that. If this were my account, I would make the decision on where to withdraw based on my target asset allocation. Bob (for good or bad reasons) decided on 2/3 Fund 1 and 1/3 Fund 2. I'd make the withdraw that returns me to my target allocation of 2/3 Fund 1 and 1/3 Fund 2. Depending on performance and contributions, that might be selling Fund 1, selling Fund 2, or selling some of both.\"",
"title": ""
},
{
"docid": "8f5425400aa00739f218859eaffbd248",
"text": "\"The argument you are making here is similar to the problem I have with the stronger forms of the efficient market hypothesis. That is if the market already has incorporated all of the information about the correct prices, then there's no reason to question any prices and then the prices never change. However, the mechanism through which the market incorporates this information is via the actors buying an selling based on what they see as the market being incorrect. The most basic concept of this problem (I think) starts with the idea that every investor is passive and they simply buy the market as one basket. So every paycheck, the index fund buys some more stock in the market in a completely static way. This means the demand for each stock is the same. No one is paying attention to the actual companies' performance so a poor performer's stock price never moves. The same for the high performer. The only thing moving prices is demand but that's always up at a more or less constant rate. This is a topic that has a lot of discussion lately in financial circles. Here are two articles about this topic but I'm not convinced the author is completely serious hence the \"\"worst-case scenario\"\" title. These are interesting reads but again, take this with a grain of salt. You should follow the links in the articles because they give a more nuanced understanding of each potential issue. One thing that's important is that the reality is nothing like what I outline above. One of the links in these articles that is interesting is the one that talks about how we now have more indexes than stocks on the US markets. The writer points to this as a problem in the first article, but think for a moment why that is. There are many different types of strategies that active managers follow in how they determine what goes in a fund based on different stock metrics. If a stocks P/E ratio drops below a critical level, for example, a number of indexes are going to sell it. Some might buy it. It's up to the investors (you and me) to pick which of these strategies we believe in. Another thing to consider is that active managers are losing their clients to the passive funds. They have a vested interest in attacking passive management.\"",
"title": ""
},
{
"docid": "f23e3365d2baf8d026f99b1755e53154",
"text": "\"Trying to \"\"time the market\"\" is usually a bad idea. People who do this every day for a living have a hard time doing that, and I'm guessing you don't have that kind of time and knowledge. So that leaves you with your first and third options, commonly called lump-sum and dollar cost averaging respectively. Which one to use depends on where your preferences lie on the risk/reward scpectrum. Dollar cost averaging (DCA) has lower risk and lower reward than lump sum investing. In my opinion, I don't like it. DCA only works better than lump sum investing if the price drops. But if you think the price is going to drop, why are you buying the stock in the first place? Example: Your uncle wins the lottery and gives you $50,000. Do you buy $50,000 worth of Apple now, or do you buy $10,000 now and $10,000 a quarter for the next four quarters? If the stock goes up, you will make more with lump-sum(LS) than you will with DCA. If the stock goes down, you will lose more with LS than you will with DCA. If the stock goes up then down, you will lose more with DCA than you will with LS. If the stock goes down then up, you will make more with DCA than you will with LS. So it's a trade-off. But, like I said, the whole point of you buying the stock is that you think it's going to go up, which is especially true with an index fund! So why pick the strategy that performs worse in that scenario?\"",
"title": ""
},
{
"docid": "5d2b124795bc36a1421cb615e4b3ab19",
"text": "\"Can you easily stomach the risk of higher volatility that could come with smaller stocks? How certain are you that the funds wouldn't have any asset bloat that could cause them to become large-cap funds for holding to their winners? If having your 401(k) balance get chopped in half over a year doesn't give you any pause or hesitation, then you have greater risk tolerance than a lot of people but this is one of those things where living through it could be interesting. While I wouldn't be against the advice, I would consider caution on whether or not the next 40 years will be exactly like the averages of the past or not. In response to the comments: You didn't state the funds so I how I do know you meant index funds specifically? Look at \"\"Fidelity Low-Priced Stock\"\" for a fund that has bloated up in a sense. Could this happen with small-cap funds? Possibly but this is something to note. If you are just starting to invest now, it is easy to say, \"\"I'll stay the course,\"\" and then when things get choppy you may not be as strong as you thought. This is just a warning as I'm not sure you get my meaning here. Imagine that some women may think when having a child, \"\"I don't need any drugs,\"\" and then the pain comes and an epidural is demanded because of the different between the hypothetical and the real version. While you may think, \"\"I'll just turn the cheek if you punch me,\"\" if I actually just did it out of the blue, how sure are you of not swearing at me for doing it? Really stop and think about this for a moment rather than give an answer that may or may not what you'd really do when the fecal matter hits the oscillator. Couldn't you just look at what stocks did the best in the last 10 years and just buy those companies? Think carefully about what strategy are you using and why or else you could get tossed around as more than a few things were supposed to be the \"\"sure thing\"\" that turned out to be incorrect like the Dream Team of Long-term Capital Management, the banks that were too big to fail, the Japanese taking over in the late 1980s, etc. There are more than a few times where things started looking one way and ended up quite differently though I wonder if you are aware of this performance chasing that some will do.\"",
"title": ""
},
{
"docid": "c0ae68ed525f07cf53970454159f26a8",
"text": "More importantly, index funds are denominated in specific currencies. You can't buy or sell an index, so it can be dimensionless. Anything you actually do to track the index involves real amounts of real money.",
"title": ""
},
{
"docid": "9a71e54c51a33edaa86448edea5040c1",
"text": "Your link is pointing to managed funds where the fees are higher, you should look at their exchange traded funds; you will note that the management fees are much lower and better reflect the index fund strategy.",
"title": ""
},
{
"docid": "a8db9d4bebfe39ff8ac28bc484923060",
"text": "... can someone explain to me why vanguard of all companies would be asking for this? If they're a company based on broad index funds, then whether or not exxon or Chevron or whoever else has climate change risk is irrelevant to that model, right?",
"title": ""
},
{
"docid": "1b108040bd2c34ec920bd9d6ec5d7bbd",
"text": "My plan is that one day I can become free of the modern day monetary burdens that most adults carry with them and I can enjoy a short life without these troubles on my mind. If your objective is to achieve financial independence, and to be able to retire early from the workforce, that's a path that has been explored before. So there's plenty of sources that you might want to check. The good news is that you don't need to be an expert on security analysis or go through dozens of text books to invest wisely and enjoy the market returns. This is the Bogleheads philosophy. It's widely accepted by people in academia, and thoroughly tested. Look into it further if you want to see the rationale behind, but, to sum it up: It doesn't matter how expert you are. The idea of beating the market, that an index fund tracks, is about 'outsmarting' the rest of investors. That would be difficult, even if it was a matter of skill, but when it comes to predicting random events we're all equally clueless. *Total Expense Ratio: It gives an idea of how expensive is a given fund in terms of fees. Actively managed funds have higher TER than indexed ones. This doesn't mean there aren't index funds with, unexplainable, high TER out there.",
"title": ""
},
{
"docid": "550a87849ede22f46d68fc8a9722b6d3",
"text": "\"You asked 3 questions here. It's best to keep them separate as these are pretty distinct, different answers, and each might already have a good detailed answer and so might be subject to \"\"closed as duplicate of...\"\" That said, I'll address the JAGLX question (1). It's not an apples to apples comparison. This is a Life Sciences fund, i.e. a very specialized fund, investing in one narrow sector of the market. If you study market returns over time, it's easy to find sectors that have had a decade or even two that have beat the S&P by a wide margin. The 5 year comparison makes this pretty clear. For sake of comparison, Apple had twice the return of JAGLX during the past 5 years. The advisor charging 2% who was heavy in Apple might look brilliant, but the returns are not positively correlated to the expense involved. A 10 or 20 year lookback will always uncover funds or individual stocks that beat the indexes, but the law of averages suggests that the next 10 or 20 years will still appear random.\"",
"title": ""
},
{
"docid": "07f7202017432ca3558e5ec9494595bc",
"text": "Current evidence is that, after you subtract their commission and the additional trading costs, actively managed funds average no better than index funds, maybe not as well. You can afford to take more risks at your age, assuming that it will be a long time before you need these funds -- but I would suggest that means putting a high percentage of your investments in small-cap and large-cap stock indexes. I'd suggest 10% in bonds, maybe more, just because maintaining that balance automatically encourages buy-low-sell-high as the market cycles. As you get older and closer to needing a large chunk of the money (for a house, or after retirement), you would move progressively more of that to other categories such as bonds to help safeguard your earnings. Some folks will say this an overly conservative approach. On the other hand, it requires almost zero effort and has netted me an average 10% return (or so claims Quicken) over the past two decades, and that average includes the dot-bomb and the great recession. Past results are not a guarantee of future performance, of course, but the point is that it can work quite well enough.",
"title": ""
},
{
"docid": "0943e45e3c60536cea418a843e1c6250",
"text": "There are at least a couple of ways you could view this to my mind: Make an Excel spreadsheet and use the IRR function to compute the rate of return you are having based on money being added. Re-invested distributions in a mutual fund aren't really an additional investment as the Net Asset Value of the fund will drop by the amount of the distribution aside from market fluctuation. This is presuming you want a raw percentage that could be tricky to compare to other funds without doing more than a bit of work in a way. Look at what is the fund's returns compared to both the category and the index it is tracking. The tracking error is likely worth noting as some index funds could lag the index by a sizable margin and thus may not be that great. At the same time there may exist cases where an index fund isn't quite measuring up that well. The Small-Growth Indexing Anomaly would be the William Bernstein article from 2001 that has some facts and figures for this that may be useful.",
"title": ""
}
] |
fiqa
|
fde84e2a1edea27e98b0863692548d47
|
Is the Yale/Swenson Asset Allocation Too Conservative for a 20 Something?
|
[
{
"docid": "1034f141e13d0ab627501a394187997c",
"text": "You can look the Vanguard funds up on their website and view a risk factor provided by Vanguard on a scale of 1 to 5. Short term bond funds tend to get their lowest risk factor, long term bond funds and blended investments go up to about 3, some stock mutual funds are 4 and some are 5. Note that in 2008 Swenson himself had slightly different target percentages out here that break out the international stocks into emerging versus developed markets. So the average risk of this portfolio is 3.65 out of 5. My guess would be that a typical twenty-something who expects to retire no earlier than 60 could take more risk, but I don't know your personal goals or circumstances. If you are looking to maximize return for a level of risk, look into Modern Portfolio Theory and the work of economist Harry Markowitz, who did extensive work on the topic of maximizing the return given a set risk tolerance. More info on my question here. This question provides some great book resources for learning as well. You can also check out a great comparison and contrast of different portfolio allocations here.",
"title": ""
},
{
"docid": "d109090ba05e855c9985aee6d8e11fed",
"text": "\"I don't think the advice to take lots more risk when young makes so much sense. The additional returns from loading up on stocks are overblown; and the rocky road from owning 75-100% stocks will almost certainly mess you up and make you lose money. Everyone thinks they're different, but none of us are. One big advantage of stocks over bonds is tax efficiency only if you buy index funds and don't ever sell them. But this does not matter in a retirement account, and outside a retirement account you can use tax-exempt bonds. Stocks have higher returns in theory but to have a reasonable guarantee of higher returns from them, you need around a 30-year horizon. That is a long, long time. Psychologically, a 60/40 stocks/bonds portfolio, or something with similar risk mixing in a few more alternative assets like Swenson's, is SO MUCH better. With 100% stocks you can spend 10 or 15 years saving money and your investment returns may get you nowhere. Think what that does to your motivation to save. (And how much you save is way more important than what you invest in.) The same doesn't happen with a balanced portfolio. With a balanced portfolio you get reasonably steady progress. You can still have a down year, but you're a lot less likely to have a down decade or even a down few years. You save steadily and your balance goes up fairly steadily. The way humans really work, this is so important. For the same kind of reason, I think it's great to buy one fund that has both stocks and bonds in there. This forces you to view the thing as a whole instead of wrongly looking at the individual asset class \"\"buckets.\"\" And it also means rebalancing will happen automatically, without having to remember to do it, which you won't. Or if you remember you won't do it when you should, because stocks are doing so well, or some other rationalization. Speaking of rebalancing, that's where a lot of the steady, predictable returns come from if you have a nice balanced portfolio. You can make money over time even if both asset classes end up going nowhere, as long as they bounce around somewhat independently, so you'll buy low and sell high when you rebalance. To me the ideal is an all-in-one fund that aims for about 60/40 stocks/bonds level of risk, somewhat more diversified than stocks/bonds is great (international stock, commodities, high yield, REIT, etc.). You can just buy that at age 20 and keep it until you retire. In beautiful ideal-world economic theory, buy 90% stocks when young. Real world with human brain involved: I love balanced funds. The steady gains are such a mental win. The \"\"target retirement\"\" funds are not a bad option, but if you buy the matching year for your age, I personally wish they had less in stocks. If you want to read more on the \"\"equity premium\"\" (how much more you make from owning stocks) here are a couple of posts on it from a blog I like: Update: I wrote this up more comprehensively on my blog,\"",
"title": ""
},
{
"docid": "dae84622294f488ae7fff5c11d07754a",
"text": "That looks like a portfolio designed to protect against inflation, given the big international presence, the REIT presence and TIPS bonds. Not a bad strategy, but there are a few things that I'd want to look at closely before pulling the trigger.",
"title": ""
},
{
"docid": "54d0a04493a4b5b0306b714af1d5f04c",
"text": "\"I think Swenson's insight was that the traditional recommendation of 60% stocks plus 40% bonds has two serious flaws: 1) You are exposed to way too much risk by having a portfolio that is so strongly tied to US equities (especially in the way it has historically been recommend). 2) You have too little reward by investing so much of your portfolio in bonds. If you can mix a decent number of asset classes that all have equity-like returns, and those asset classes have a low correlation with each other, then you can achieve equity-like returns without the equity-like risk. This improvement can be explicitly measured in the Sharpe ratio of you portfolio. (The Vanguard Risk Factor looks pretty squishy and lame to me.) The book the \"\"The Ivy Portfolio\"\" does a great job at covering the Swenson model and explains how to reasonably replicate it yourself using low fee ETFs.\"",
"title": ""
}
] |
[
{
"docid": "6e8e873ae7e17639e49b6536f6f2130d",
"text": "The range is fine. It's ~ 1-2X your annual income. First, and foremost - your comment on the 401(k), not knowing the fees, is a red flag to me. The difference between low cost options (say sub .25%) and the high fees (over .75%) has a huge impact to your long term savings, and on the advice I'd give regarding maximizing the deposits. At 26, you and your wife have about 20% of your income as savings. This is on the low side, in my opinion, but others suggest a year's salary by age 35 which implies you're not too far behind. Given your income, you are most likely in the 25% federal bracket. I'd like you to research your 401(k) expenses, and if they are reasonable, maximise the deposit. If your wife has no 401(k) at work, she can deposit to an IRA, pre-tax. It's wise to keep 6 months of expenses as liquid cash (or short term CDs) as an emergency fund in case of such things as a job layoff. They say to expect a month of job hunting for each $10K you make, so having even a year to find a new job isn't unheard of. One thing to consider is to simply kill the mortgage. Before suggesting this, I'd ask what your risk tolerance is? If you took $100K and put it right into the S&P, would you worry every time you heard the market was down today? Or would you happily leave it there for the next 40 years? If you prefer safety, or at least less risk, paying off the mortgage will free up the monthly payment, and let you dollar cost average into the new investments over time. You'll have the experience of seeing your money grow and learn to withstand the volatility. The car loan is a low rate, if you prefer to keep the mortgage for now, paying the car loan is still a guaranteed 3%, vs the near 0% the bank will give you.",
"title": ""
},
{
"docid": "0918254a089cca9fd94fee63324ec519",
"text": "\"Your bank's fund is not an index fund. From your link: To provide a balanced portfolio of primarily Canadian securities that produce income and capital appreciation by investing primarily in Canadian money market instruments, debt securities and common and preferred shares. This is a very broad actively managed fund. Compare this to the investment objective listed for Vanguard's VOO: Invests in stocks in the S&P 500 Index, representing 500 of the largest U.S. companies. There are loads of market indices with varying formulas that are supposed to track the performance of a market or market segment that they intend to track. The Russel 2000, The Wilshire 1000, The S&P 500, the Dow Industrial Average, there is even the SSGA Gender Diversity Index. Some body comes up with a market index. An \"\"Index Fund\"\" is simply a Mutual Fund or Exchange Traded Fund (ETF) that uses a market index formula to make it's investment decisions enabling an investor to track the performance of the index without having to buy and sell the constituent securities on their own. These \"\"index funds\"\" are able to charge lower fees because they spend $0 on research, and only make investment decisions in order to track the holdings of the index. I think 1.2% is too high, but I'm coming from the US investing world it might not be that high compared to Canadian offerings. Additionally, comparing this fund's expense ratio to the Vanguard 500 or Total Market index fund is nonsensical. Similarly, comparing the investment returns is nonsensical because one tracks the S&P 500 and one does not, nor does it seek to (as an example the #5 largest holding of the CIBC fund is a Government of Canada 2045 3.5% bond). Everyone should diversify their holdings and adjust their investment allocations as they age. As you age you should be reallocating away from highly volatile common stock and in to assets classes that are historically more stable/less volatile like national government debt and high grade corporate/local government debt. This fund is already diversified in to some debt instruments, depending on your age and other asset allocations this might not be the best place to put your money regardless of the fees. Personally, I handle my own asset allocations and I'm split between Large, Mid and Small cap low-fee index funds, and the lowest cost high grade debt funds available to me.\"",
"title": ""
},
{
"docid": "69e661b4e1154b9542f9d63bc5d62bbb",
"text": "So I did some queries on Google Scholar, and the term of art academics seem to use is target date fund. I notice divided opinions among academics on the matter. W. Pfau gave a nice set of citations of papers with which he disagrees, so I'll start with them. In 1969, Paul Sameulson published the paper Lifetime Portfolio Selection By Dynamic Stochaistic Programming, which found that there's no mathematical foundation for an age based risk tolerance. There seems to be a fundamental quibble relating to present value of future wages; if they are stable and uncorrelated with the market, one analysis suggests the optimal lifecycle investment should start at roughly 300 percent of your portfolio in stocks (via crazy borrowing). Other people point out that if your wages are correlated with stock returns, allocations to stock as low as 20 percent might be optimal. So theory isn't helping much. Perhaps with the advent of computers we can find some kind of empirical data. Robert Shiller authored a study on lifecycle funds when they were proposed for personal Social Security accounts. Lifecycle strategies fare poorly in his historical simulation: Moreover, with these life cycle portfolios, relatively little is contributed when the allocation to stocks is high, since earnings are relatively low in the younger years. Workers contribute only a little to stocks, and do not enjoy a strong effect of compounding, since the proceeds of the early investments are taken out of the stock market as time goes on. Basu and Drew follow up on that assertion with a set of lifecycle strategies and their contrarian counterparts: whereas a the lifecycle plan starts high stock exposure and trails off near retirement, the contrarian ones will invest in bonds and cash early in life and move to stocks after a few years. They show that contrarian strategies have higher average returns, even at the low 25th percentile of returns. It's only at the bottom 5 or 10 percent where this is reversed. One problem with these empirical studies is isolating the effect of the glide path from rebalancing. It could be that a simple fixed allocation works plenty fine, and that selling winners and doubling down on losers is the fundamental driver of returns. Schleef and Eisinger compare lifecycle strategy with a number of fixed asset allocation schemes in Monte Carlo simulations and conclude that a 70% equity, 30% long term corp bonds does as well as all of the lifecycle funds. Finally, the earlier W Pfau paper offers a Monte Carlo simulation similar to Schleef and Eisinger, and runs final portfolio values through a utility function designed to calculate diminishing returns to more money. This seems like a good point, as the risk of your portfolio isn't all or nothing, but your first dollar is more valuable than your millionth. Pfau finds that for some risk-aversion coefficients, lifecycles offer greater utility than portfolios with fixed allocations. And Pfau does note that applying their strategies to the historical record makes a strong recommendation for 100 percent stocks in all but 5 years from 1940-2011. So maybe the best retirement allocation is good old low cost S&P index funds!",
"title": ""
},
{
"docid": "56290eb39d292df78b8af33f4e308903",
"text": "Mostly you nailed it. It's a good question, and the points you raise are excellent and comprise good analysis. Probably the biggest drawback is if you don't agree with the asset allocation strategy. It may be too much/too little into stocks/bonds/international/cash. I am kind of in this boat. My 401K offers very little choices in funds, but offers Vanguard target funds. These tend to be a bit too conservative for my taste, so I actually put money in the 2060 target fund. If I live that long, I will be 94 in 2060. So if the target funds are a bit too aggressive for you, move down in years. If they are a bit too conservative, move up.",
"title": ""
},
{
"docid": "08b7eac4258132d5822ce91ed957babb",
"text": "I think not. I think a discussion of optimum mix is pretty independent of age. While a 20 year old may have 40 years till retirement, a 60 year old retiree has to plan for 30 years or more of spending. I'd bet that no two posters here would give the same optimum mix for a given age, why would anyone expect the Wall Street firms to come up with something better than your own gut suggests?",
"title": ""
},
{
"docid": "f0a717cb3d03349eff74c42a58816337",
"text": "The standard advice is that stocks are all over the place, and bonds are stable. Not necessarily true. Magazines have to write for the lowest common denominator reader, so sometimes the advice given is fortune-cookie like. And like mbhunter pointed out, the advertisers influence the advice. When you read about the wonders of Index funds, and see a full page ad for Vanguard or the Nasdaq SPDR fund, you need to consider the motivation behind the advice. If I were you, I would take advantage of current market conditions and take some profits. Put as much as 20% in cash. If you're going to buy bonds, look for US Government or Municipal security bond funds for about 10% of your portfolio. You're not at an age where investment income matters, you're just looking for some safety, so look for bond funds or ETFs with low durations. Low duration protects your principal value against rate swings. The Vanguard GNMA fund is a good example. $100k is a great pot of money for building wealth, but it's a job that requires you to be active, informed and engaged. Plan on spending 4-8 hours a week researching your investments and looking for new opportunities. If you can't spend that time, think about getting a professional, fee-based advisor. Always keep cash so that you can take advantage of opportunities without creating a taxable event or make a rash decision to sell something because you're excited about a new opportunity.",
"title": ""
},
{
"docid": "e807c92da46aa5593ceb19e23329ecb6",
"text": "Michigan's 529 plan offers a wide variety of investment options, ranging from a very conservative guaranteed investment option (currently earning 1.75% interest) to a variety of index-based funds, most of which are considered aggressive. You said that you are unhappy with the 5% you have earned the past year, and that you thought you should be able to get 8% elsewhere. But according to your comment, you have 30% of your money earning a fixed 1.75% rate, and another 40% of your money invested in one of the moderate balanced options (which includes both stocks and bonds). You've only got 30% invested in the more aggressive investments that you seem to be looking for. If you want to be invested more agressively (which is reasonable, since your daughter won't need this money for many years), you can select more aggressive investments inside the 529. Michigan's 529 offers you the ability to deduct up to $10,000 (if you are married filing jointly) of contributions off your Michigan state income tax each year. In addition, the earnings inside the 529 are federally tax-free if the money is spent on college education.",
"title": ""
},
{
"docid": "e256880a79a54701a562389d0a2fd2ab",
"text": "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.",
"title": ""
},
{
"docid": "257b39ff066fa883fd2ac3d6524a037f",
"text": "A UTMA may or may not fit your situation. The main drawbacks to a UTMA account is that it will count against your child for financial aid (it counts as the child's asset). The second thing to consider is that taxes aren't deferred like in a 529 plan. The last problem of course is that when he turns 18 he gets control of the account and can spend the money on random junk (which may or may not be important to you). A 529 plan has a few advantages over a UTMA account. The grandparents can open the account with your son as the beneficiary and the money doesn't show up on financial aid for college (under current law which could change of course). Earnings grow tax free which will net you more total growth. You can also contribute substantially more without triggering the gift tax ~$60k. Also many states provide a state tax break for contributing to the state sponsored 529 plan. The account owner would be the grandparents so junior can't spend the money on teenage junk. The big downside to the 529 is the 10% penalty if the money isn't used for higher education. The flip side is that if the money is left for 20 years you will also have additional growth from the 20 years of tax free growth which may be a wash depending on your tax bracket and the tax rates in effect over those 20 years.",
"title": ""
},
{
"docid": "2b5b90e9340e1eadbd41a2f035e6a76b",
"text": "\"Most people advocate a passively managed, low fee mutual fund that simply aims to track a given benchmark (say S&P 500). Few funds can beat the S&P consistently, so investors are often better served finding a no load passive fund. First thing I would do is ask your benefits rep why you don't have an option to invest in a Fidelity passive index fund like Spartan 500. Ideally young people would be heavy in equities and slowly divest for less risky stuff as retirement comes closer, and rebalance the portfolio regularly when market swings put you off risk targets. Few people know how to do this and actually do so. So there are mutual funds that do it for you, for a fee. These in are called \"\"lifecycle\"\" funds (The Freedom funds here). I hesitate to recommend them because they're still fairly new. If you take a look at underlying assets, these things generally just reinvest in the broker's other funds, which themselves have expenses & fees. And there's all kinds personal situations that might lead to you place a portion with a different investment.\"",
"title": ""
},
{
"docid": "927ea2518401bc61d9560f1f7bd8e97f",
"text": "\"As others are saying, you want to be a bit wary of completely counting on a defined benefit pension plan to be fulfilling exactly the same promises during your retirement that it's making right now. But, if in fact you've \"\"won the game\"\" (for lack of a better term) and are sure you have enough to live comfortably in retirement for whatever definition of \"\"comfortably\"\" you choose, there are basically two reasonable approaches: Those are all reasonable approaches, and so it really comes down to what your risk tolerance is (a.k.a. \"\"Can I sleep comfortably at night without staying up worrying about my portfolio?\"\"), what your goals for your money are (Just taking care of yourself? Trying to \"\"leave a legacy\"\" via charity or heirs or the like? Wanting a \"\"dream\"\" retirement traveling the world if possible but content to stay home if it's not?), and how confident you are in being able to calculate your \"\"needs\"\" in retirement and what your assets will truly be by then. You ask \"\"if it would be unwise at this stage of my life to create a portfolio that's too conservative\"\", but of course if it's \"\"too conservative\"\" then it would have been unwise. But I don't think it's unwise, at any stage of life, to create a portfolio that's \"\"conservative enough\"\". Only take risks if you have the need, ability, and willingness to do so.\"",
"title": ""
},
{
"docid": "52a68e315eefe0325f56476761a2d3ea",
"text": "Over time, fees are a killer. The $65k is a lot of money, of course, but I'd like to know the fees involved. Are you doubling from 1 to 2%? if so, I'd rethink this. Diversification adds value, I agree, but 2%/yr? A very low cost S&P fund will be about .10%, others may go a bit higher. There's little magic in creating the target allocation, no two companies are going to be exactly the same, just in the general ballpark. I'd encourage you to get an idea of what makes sense, and go DIY. I agree 2% slices of some sectors don't add much, don't get carried away with this.",
"title": ""
},
{
"docid": "d356e065a65de9c35e9d108e23d322f2",
"text": "2 + 20 isn't really a investment style, more of a management style. As CTA I don't have specific experience in the Hedge Fund industry but they are similar. For tech stuff, you may want to check out Interactive Brokers. As for legal stuff, with a CTA you need to have power of attorney form, disclosure documents, risk documents, fees, performance, etc. You basically want to cover your butt and make sure clients understand everything. For regulatory compliance and rules, you would have to consult your apporiate regulatory body. For a CTA its the NFA/CFTC. You should look at getting licensed to provide crediabilty. For a CTA it would be the series 3 license at the very least and I can provide you with a resource for study guides and practice test taking for ALL licenses. I can provide a brief step by step guide later on.",
"title": ""
},
{
"docid": "70423b1c3d64f05ea5ae171e3c0ca8da",
"text": "At your age, I don't think its a bad idea to invest entirely in stocks. The concern with stocks is their volatility, and at 40+ years from retirement, volatility does not concern you. Just remember that if you ever want to call upon your 401(k) for anything other than retirement, such as a down payment on a home (which is a qualified distribution that is not subject to early distribution penalties), then you should reconsider your retirement allocations. I would not invest 100% into stocks if I knew I were going to buy a house in five years and needed that money for a down payment. If your truly saving strictly for a retirement that could occur forty years in the future, first good for you, and second, put it all in an index fund. An S&P index has a ridiculously low expense ratio, and with so many years away from retirement, it gives you an immense amount of flexibility to choose what to do with those funds as your retirement date approaches closer every year.",
"title": ""
},
{
"docid": "4fb93947461cf2614b37f4ea50bbec9b",
"text": "Googling vanguard target asset allocation led me to this page on the Bogleheads wiki which has detailed breakdowns of the Target Retirement funds; that page in turn has a link to this Vanguard PDF which goes into a good level of detail on the construction of these funds' portfolios. I excerpt: (To the question of why so much weight in equities:) In our view, two important considerations justify an expectation of an equity risk premium. The first is the historical record: In the past, and in many countries, stock market investors have been rewarded with such a premium. ... Historically, bond returns have lagged equity returns by about 5–6 percentage points, annualized—amounting to an enormous return differential in most circumstances over longer time periods. Consequently, retirement savers investing only in “safe” assets must dramatically increase their savings rates to compensate for the lower expected returns those investments offer. ... The second strategic principle underlying our glidepath construction—that younger investors are better able to withstand risk—recognizes that an individual’s total net worth consists of both their current financial holdings and their future work earnings. For younger individuals, the majority of their ultimate retirement wealth is in the form of what they will earn in the future, or their “human capital.” Therefore, a large commitment to stocks in a younger person’s portfolio may be appropriate to balance and diversify risk exposure to work-related earnings (To the question of how the exact allocations were decided:) As part of the process of evaluating and identifying an appropriate glide path given this theoretical framework, we ran various financial simulations using the Vanguard Capital Markets Model. We examined different risk-reward scenarios and the potential implications of different glide paths and TDF approaches. The PDF is highly readable, I would say, and includes references to quant articles, for those that like that sort of thing.",
"title": ""
}
] |
fiqa
|
0c3fd95a0a7a6d23ed96a34390202391
|
Clarification on 529 fund
|
[
{
"docid": "2026e8b41d83bbb037d4643cd3c94844",
"text": "Yes, maybe. The 529 is pretty cool in that you can open an account for yourself, and change the beneficiary as you wish, or not. In theory, one can start a 529 for children or grandchildren yet unborn. Back to you - a 529 is not deductible on your federal return. It grows tax deferred, and tax free if used for approved education. Some states offer deductions depending on the state. There is a list of states that offer such a deduction.",
"title": ""
},
{
"docid": "c8a1f6e41f6870de191a8e56f1d19176",
"text": "You are faced with a dilemma. If you use a 529 plan to fund your education, the short timeline of a few years will limit your returns that are tax free. Most people who use a 529 plan either purchase years of tuition via lump sum, when the child is young; or they put aside money on a regular basis that will grow tax deferred/tax free. Some states do give a tax break when the contribution is made by a state taxpayer into a plan run by the state. The long term plans generally use a risk profile that starts off heavily weighted in stock when the child is young, and becomes more fixed income as the child reaches their high school years. The idea is to protect the fund from big losses when there is no time to recover. If you choose the plan with the least risk the issue is that the amount of gains that are being protected from federal tax is small. If you pick a more aggressive plan the risk is that the losses could be larger than the state tax savings. Look at some of the other tax breaks for tuition to see if you qualify Credits An education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two education credits available: the American Opportunity Tax Credit and the Lifetime Learning Credit. Who Can Claim an Education Credit? There are additional rules for each credit, but you must meet all three of the following for either credit: If you’re eligible to claim the lifetime learning credit and are also eligible to claim the American opportunity credit for the same student in the same year, you can choose to claim either credit, but not both. You can't claim the AOTC if you were a nonresident alien for any part of the tax year unless you elect to be treated as a resident alien for federal tax purposes. For more information about AOTC and foreign students, visit American Opportunity Tax Credit - Information for Foreign Students. Deductions Tuition and Fees Deduction You may be able to deduct qualified education expenses paid during the year for yourself, your spouse or your dependent. You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. The qualified expenses must be for higher education. The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. This deduction, reported on Form 8917, Tuition and Fees Deduction, is taken as an adjustment to income. This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). This deduction may be beneficial to you if, for example, you cannot take the lifetime learning credit because your income is too high. You may be able to take one of the education credits for your education expenses instead of a tuition and fees deduction. You can choose the one that will give you the lower tax.",
"title": ""
}
] |
[
{
"docid": "2efee2c5fd498c4cbb9139d8a8d79065",
"text": "\"Oddly enough, in the USA, there are enough cost and tax savings between buy-and-hold of a static portfolio and buying into a fund that a few brokerages have sprung up around the concept, such as FolioFN, to make it easier for small investors to manage numerous small holdings via fractional shares and no commission window trades. A static buy-and-hold portfolio of stocks can be had for a few dollars per trade. Buying into a fund involves various annual and one time fees that are quoted as percentages of the investment. Even 1-2% can be a lot, especially if it is every year. Typically, a US mutual fund must send out a 1099 tax form to each investor, stating that investors share of the dividends and capital gains for each year. The true impact of this is not obvious until you get a tax bill for gains that you did not enjoy, which can happen when you buy into a fund late in the year that has realized capital gains. What fund investors sometimes fail to appreciate is that they are taxed both on their own holding period of fund shares and the fund's capital gains distributions determined by the fund's holding period of its investments. For example, if ABC tech fund bought Google stock several years ago for $100/share, and sold it for $500/share in the same year you bought into the ABC fund, then you will receive a \"\"capital gains distribution\"\" on your 1099 that will include some dollar amount, which is considered your share of that long-term profit for tax purposes. The amount is not customized for your holding period, capital gains are distributed pro-rata among all current fund shareholders as of the ex-distribution date. Morningstar tracks this as Potential Capital Gains Exposure and so there is a way to check this possibility before investing. Funds who have unsold losers in their portfolio are also affected by these same rules, have been called \"\"free rides\"\" because those funds, if they find some winners, will have losers that they can sell simultaneously with the winners to remain tax neutral. See \"\"On the Lookout for Tax Traps and Free Riders\"\", Morningstar, pdf In contrast, buying-and-holding a portfolio does not attract any capital gains taxes until the stocks in the portfolio are sold at a profit. A fund often is actively managed. That is, experts will alter the portfolio from time to time or advise the fund to buy or sell particular investments. Note however, that even the experts are required to tell you that \"\"past performance is no guarantee of future results.\"\"\"",
"title": ""
},
{
"docid": "7b76aa107e70706d9be9297b0b969288",
"text": "Your friend would have only been liable for a tax penalty if he withdrew more 529 money than he reported for qualified expenses. That said, if he took the distribution in his name, it triggers a 1099-Q report to the IRS in his name rather than his beneficiaries. This will likely be flagged by the IRS, since it looks like he withdrew the money, but didn't pay taxes and penalties on it, not the beneficiary. In other words, qualified education expenses only apply to the beneficiary, not the plan owner/contributor. In this case, the IRS would request additional documentation to show that the expenses were indeed qualified. To avoid this hassle, it's easiest to make sure the distribution is payed directly to the beneficiary rather than yourself. Once he or she has the check, then have them sign the check over to you or transfer it into your account. Otherwise you trigger an IRS 1099-Q in your name rather than your beneficiary.",
"title": ""
},
{
"docid": "69973406d4fae9631a60e24bfb94d2f5",
"text": "One other advantage of a 529 versus a simple investment account (like an UGMA/UTMA) is that the treatment for the purposes of financial aid is more advantageous (FinAid.org). Even if it is a custodial account (in which the student is both the owner and beneficiary), it is treated as a parental asset when completing the FAFSA. That means the amount that will be considered available each year towards the Estimated Family Contribution (EFC) will be greatly reduced. To be sure, this does not help with all colleges (often ones that use the CSS/PROFILE in addition to the FAFSA). Some will simply assume that 25% of the 529 will be used each year.",
"title": ""
},
{
"docid": "bd6a726a6f23cd45a2d2da303a63e4fa",
"text": "I worked for a company who managed money for Braeburn. They are managed more like a foundation than a hedge fund. They invested in a fixed income separate account. Yes, they definitely try to avoid taxes as the entity was domiciled in a Ireland and their offices were in Reno. The goal of Braeburn is to maintain that huge amount of cash on the balance. avoiding taxes is an efficient way to do that.",
"title": ""
},
{
"docid": "33b68b0c17e6cb79af2134c279752faa",
"text": "Please either remove the $50 going to the 529 plan or move it into a ROTH IRA instead. You can always use your ROTH contributions to pay for college expenses in the future if you want to. I suspect you may not have enough saved up for retirement to have the luxury to help with college though.",
"title": ""
},
{
"docid": "9d53eb6e97cd4e36144f3f6406937ca0",
"text": "Thanks for the huge insight. I am still a student doing an intern and this was given as my first task, more of trying to give the IA another perspective looking at these funds rather than picking. I was not given the investors preference in terms of return and risk tolerances so it was really open-ended. However, thanks so much for the quick response. At least now I have a better idea of what I am going to deliver or at least try to show to the IA.",
"title": ""
},
{
"docid": "78655e8f9f3aebf43b475b08a8aa4e42",
"text": "First, I suggest that the route gives you the discount. You work the block with goldman and they say that if you work 20 blocks with them you get 50bps back, regardless of the issue. Also, as a hedge fund you have a very different model than an ETF or MF. That said, how exactly would that this be disclosed to the investor? Is there a standard in place for that?",
"title": ""
},
{
"docid": "6da4f2f93e76033d15a828d5afbe534e",
"text": "\"First off, leaving money in a 529 account is not that bad, since you may always change the beneficiary to most any blood relative. So if you have leftovers, you don't HAVE to pay the 10% penalty if you have a grandchild, for instance, that can use it. But if you would rather have the money out, then you need a strategy to get it out that is tax efficient. My prescription for managing a situation like this is not to pay directly out of the 529 account, but instead calculate your cost of education up-front and withdraw that money at the beginning of the school year. You can keep it in a separate account, but that's not necessary. The amount you withdraw should be equal to what the education costs, which may be estimated by taking the budget that the school publishes minus grants and scholarships. You should have all of those numbers before the first day of school. This is amount $X. During the year, write all the checks out of your regular account. At the end of the school year, you should expect to have no money left in the account. I presume that the budget is exactly what you will spend. If not, you might need to make a few adjustments, but this answer will presume you spend exactly $X during the fall and the spring of the next year. In order to get more out of the 529 without paying penalties, you are allowed to remove money without penalty, but having the gains taxed ($y + $z). You have the choice of having the 529 funds directed to the educational institution, the student, or yourself. If you direct the funds to the student, the gains portion would be taxed at the student's rate. Everyone's tax situation is different, and of course there is a linkage between the parent's taxes and student's taxes, but it may be efficient to have the 529 funds directed to the student. For instance, if the student doesn't have much income, they might not even be required to file income tax. If that's the case, they may be able to remove an amount, $y, from the 529 account and still not need to file. For instance, let's say the student has no unearned income, and the gains in the 529 account were 50%. The student could get a check for $2,000, $1,000 would be gains, but that low amount may mean the student was not required to file. Or if it's more important to get more money out of the account, the student could remove the total amount of the grants plus scholarships ($y + $z). No penalty would be due, just the taxes on the gains. And at the student's tax rate (generally, but check your own situation). Finally, if you really want the money out of the account, you could remove a check ($y + $z + $p). You'd pay tax on the gains of the sum, but penalty of 10% only on the $p portion. This answer does not include the math that goes along with securing some tax credits, so if those credits still are around as you're working through this, consider this article (which requires site sign-up). In part, this article says: How much to withdraw - ... For most parents, it will be 100% of the beneficiary’s qualified higher education expenses paid this year—tuition, fees, books, supplies, equipment, and room and board—less $4,000. The $4,000 is redirected to the American Opportunity Tax Credit (AOTC),... When to withdraw it - Take withdrawals in the same calendar year that the qualified expenses were paid. .... Designating the distributee - Since it is usually best that the Form 1099-Q be issued to the beneficiary, and show the beneficiary’s social security number, I prefer to use either option (2) or (3) [ (2) a check made out to the account beneficiary, or (3) a check made out to the educational institution] What about scholarships? - The 10 percent penalty on a non-qualified distribution from a 529 plan is waived when the excess distribution can be attributed to tax-free scholarships. While there is no direct guidance from the IRS, many tax experts believe the distribution and the scholarship do not have to match up in the same calendar year when applying the penalty waiver. If you're curious about timing (taking non-penalty grants and scholarship money out), there is this link, which says you \"\"probably\"\" are allowed to accumulate grants and scholarship totals, for tax purposes, over multiple years.\"",
"title": ""
},
{
"docid": "4c07eac84072af95d6ef2c086ba24bbf",
"text": "He has included this on Schedule D line 1a, but I don't see any details on the actual transaction. It is reported on form 8949. However, if it is fully reported in 1099-B (with cost basis), then you don't have to actually detail every position. Turbotax asked me to fill in individual stock sales with proceeds and cost basis information. ... Again, it seems to be documented on Schedule D in boxes 1a and 8a. See above. I received a 1099-Q for a 529 distribution for a family member. It was used for qualified expenses, so should not be taxable. Then there's nothing to report. I believe I paid the correct amounts based on my (possibly flawed) understanding of estimated taxes. His initial draft had me paying a penalty. I explained my situation for the year, and his next draft had the penalties removed, with no documentation or explanation. IRS assesses the penalty. If you volunteer to pay the penalty, you can calculate it yourself and pay with the taxes due. Otherwise - leave it to the IRS to calculate and assess the penalty they deem right and send you a bill. You can then argue with the IRS about that assessment. Many times they don't even bother, if the amounts are small, so I'd suggest going with what the CPA did.",
"title": ""
},
{
"docid": "d6d52b842cc2405c33403cbfcbd53cbb",
"text": "\"The root of the advice Bob is being given is from the premise that the market is temporarily down. If the market is temporarily down, then the stocks in \"\"Fund #1\"\" are on-sale and likely to go up soon (soon is very subjective). If the market is going to go up soon (again subjective) you are probably better in fictitious Fund #1. This is the valid logic that is being used by the rep. I don't think this is manipulative based on costs. It's really up to Bob whether he agrees with that logic or if he disagrees with that logic and to make his own decision based on that. If this were my account, I would make the decision on where to withdraw based on my target asset allocation. Bob (for good or bad reasons) decided on 2/3 Fund 1 and 1/3 Fund 2. I'd make the withdraw that returns me to my target allocation of 2/3 Fund 1 and 1/3 Fund 2. Depending on performance and contributions, that might be selling Fund 1, selling Fund 2, or selling some of both.\"",
"title": ""
},
{
"docid": "398e0210b897b26b43d1e3f1a3761f2f",
"text": "It says expense ratio of 0.14%. What does it mean? Essentially it means that they will take 0.14% of your money, regardless of the performance. This measures how much money the fund spends out of its assets on the regular management expenses. How much taxes will I be subject to This depends on your personal situation, not much to do with the fund (though investment/rebalancing policies may affect the taxable distributions). If you hold it in your IRA - there will be no taxes at all. However, some funds do have measures of non-taxable distributions vs dividends vs. capital gains. Not all the funds do that, and these are very rough estimates anyway. What is considered to be a reasonable expense ratio? That depends greatly on the investment policy. For passive index funds, 0.05-0.5% is a reasonable range, while for actively managed funds it can go up as much as 2% and higher. You need to compare to other funds with similar investment policies to see where your fund stands.",
"title": ""
},
{
"docid": "abb81eca56e64bedd7d51ec7bcc3fd7f",
"text": "The 2 and 20 rule is a premium arrangement that hedge funds offer and venture capital funds offer, and they also offer different variations of it. The 2 is the management fee as percent of assets under management, the 20 is the profit cut, which they only get if they are profitable. There are 0/20, 1/15, and many variations. You're assuming that nobody offers this arrangement because it isn't offered to you, but that's because nobody offers it to people that aren't wealthy enough to legally qualify for their fund. When you park 6 or 7 figure amounts in bank accounts, they'll send your information out to the funds that operate the way you wish they operated.",
"title": ""
},
{
"docid": "d1015ffe029820bd6079017d96a071be",
"text": "Like an S&P 500 ETF? So you're getting in some cash inflow each day, cash outflows each day. And you have to buy and sell 500 different stocks, at the same time, in order for your total fund assets to match the S&P 500 index proportions, as much as possible. At any given time, the prices you get from the purchase/sale of stock is probably going to be somewhat different than the theoretical amounts you are supposed to get to match, so it's quite a tangle. This is my understanding of things. Some funds are simpler - a Dow 30 fund only has 30 stocks to balance out. Maybe that's easier, or maybe it's harder because one wonky trade makes a bigger difference? I'm not sure this is how it really operates. The closest I've gotten is a team that has submitted products for indexing, and attempted to develop funds from those indexes. Turns out finding the $25-50 million of initial investments isn't as easy as anyone would think.",
"title": ""
},
{
"docid": "e807c92da46aa5593ceb19e23329ecb6",
"text": "Michigan's 529 plan offers a wide variety of investment options, ranging from a very conservative guaranteed investment option (currently earning 1.75% interest) to a variety of index-based funds, most of which are considered aggressive. You said that you are unhappy with the 5% you have earned the past year, and that you thought you should be able to get 8% elsewhere. But according to your comment, you have 30% of your money earning a fixed 1.75% rate, and another 40% of your money invested in one of the moderate balanced options (which includes both stocks and bonds). You've only got 30% invested in the more aggressive investments that you seem to be looking for. If you want to be invested more agressively (which is reasonable, since your daughter won't need this money for many years), you can select more aggressive investments inside the 529. Michigan's 529 offers you the ability to deduct up to $10,000 (if you are married filing jointly) of contributions off your Michigan state income tax each year. In addition, the earnings inside the 529 are federally tax-free if the money is spent on college education.",
"title": ""
},
{
"docid": "e6c63de816b8047de3c37367fb881676",
"text": "I found out about Google checkout today, it looks like it may meet my needs, but I'd still be interested to find out about other options.",
"title": ""
}
] |
fiqa
|
a45d0fadcfddbc11d6f7ebabc9b4b4db
|
How do you save money on clothes and shoes for your family?
|
[
{
"docid": "763ea46979f9a9ad37d83e8294dc5aee",
"text": "\"I feel the same way too! With two kids, I feel like I am spending what it would cost to run a small country just on clothes, shoes, jackets, replacing everything as it is grown out of! A few things I do: I shop in affordable places and check out sales, and look for the cutest things I can find there in a reasonable price range. If you aren't browsing in the $60 baby dresses, you aren't tempted by them. I don't go looking at $60 shirts for my son, he's five and he doesn't need a $60 shirt. I also really only shop for him two or three times a year for clothing...back to school and early spring are the big ones. For fall I got him five pairs of jeans, maybe 8 tops, new socks, etc. I'll add in a couple of heavier sweatshirts, etc as I go, but I really don't browse for him...it's too easy to find something to buy! I look for inexpensive lines for the things that don't really matter...bright T's for my son for summer that just get dirty and spilled on, sleepers, socks, pj's, etc. Joe Fresh, Walmart, Old Navy, Costco. Then I choose a few things that I know I want brand name or more stylish options for, and find ways to buy them more cheaply. These might be things like logo'd fleece tops, trendy jackets, things where the style is actually noticed. I buy jeans at Old Navy for my son when they are on sale, I buy Gusti/Genevieve LaPierre snowsuits at Sears when they are 40% off in Sept/Oct. The Childrens' Place has good quality, stylish clothing for kids and if you watch, they always have deals on their jeans or tops...then I stock up. And for younger kids, Old Navy and The Children's Place jeans have adjustable waistbands. I've already unrolled cuffs and let out the waist in my son's back to school jeans. I have friends who are starting to take in bags of too-small clothing to consignment shops...if they come away with $100, it's still $100! For preteen and teen kids who want certain brands, etc, I think it is very reasonable to say \"\"we will pay x for each pair of jeans, or x for winter boots. If you want to throw in some babysitting/birthday money and go buy something more expensive, you are welcome to do so!\"\" That way, you are still paying for basics, but they can feel like they aren't stuck wearing things they don't like. Tell them...you can buy 5 tops at $x each for back to school, or 10 tops at $x. And lastly, and most sadly of all: buy less..and stop shopping. There, I said it out loud. I try to be careful of what I buy, but I still find things I bought that were never worn. Now I keep a return basket in laundry/mudroom...if I don't love it, if it seems impractical now that I got it home, if I wanted it just in case item #1 didn't work...it goes in the basket. And I return them. I suck it up, I take it with me and go get my money back. Mistakes can be fixed if the items haven't been worn or washed.\"",
"title": ""
},
{
"docid": "920272fd41c2a32dc73f56654a9165a3",
"text": "\"I'm all for thrift stores and yard sales. When they're littler they're more into comfort, perhaps insisting on certain colors, but somewhere around 13 they start to become more fashion conscious. If you want name brand clothes for kids, hit yard sales or consignment stores in better neighborhoods. Other places are Ross's or Marshall's. Both carry name brands. It's just you never know what they'll have. Another stategy is to buy fewer clothes. If you do laundry twice a week, you just don't need as much. Aim for mix and match. Also have play clothes for rough and tumble wear and \"\"good\"\" clothes for school and church. All these help keep costs down. My sister and I maintained an informal exchange between the cousins. This helped a good deal. A church in our neighborhood has a yearly clothing giveaway. That kind of thing may be an option for you as well. Or you could request needed items on Yahoo's freecycle. I see alot of clothes being given or requested on that site. I had one son who ripped out knees. Double kneed pants were a great investment. It looked like a rather large patch of fusible interfacing attached to the inside knee area. So it might work if you tried that on exisitng pants. Hope these help.\"",
"title": ""
},
{
"docid": "84a39ac68628341d9ed01aaf95797520",
"text": "I speak as a person without kids, but I'll give this a shot anyway, using my memory of the perspective I had when I was a kid. My advice is, if the kids are young enough to not care much, don't be afraid of the thrift store. My parents got a bunch of clothes from the thrift store as I was growing up (around elementary school age) and I didn't care at all. When I got to be older, (middle school age) shopping at Target and K-mart didn't seem bad either. By the time the kids are old enough to really care beyond, they are probably old enough to get their own part-time jobs and get their own clothing. I however, am probably naive, as I still care little for such things, and judging from popular culture, most care about them a great deal.",
"title": ""
},
{
"docid": "38ba84567b3b6d74d8c9103720cf01b2",
"text": "\"I look ahead for sizes. I was at the thrift store and saw a good condition, good brand winter coat that will likely fit my daughter next year, so I bought it. I also bought a snowsuit my baby can wear when he's 6 months (~5 months pregnant now). When it starts getting cold next fall, I'll be set, rather than wasting time and money running around town trying to find winter gear. This applies for any regular stores you visit (Costco, thrift stores, kids resale stores, etc): look for clearance/discounted kids clothes in the next few sizes up, even off-season. This works especially well for basics you need lots of (PJs, socks, etc) and more expensive things where you don't want to be desperate when shopping for them. You're always \"\"buying low.\"\"\"",
"title": ""
}
] |
[
{
"docid": "1028503291e1d7182842563f9ad292d8",
"text": "\"Keep a notebook. (or spreadsheet, etc. whatever works) Start to track what things cost as few can really commit this all to memory. You'll start to find the regular sale prices and the timing of them at your supermarkets. I can't even tell you the regular price of chicken breasts, I just know the sale is $1.79-1.99/lb, and I buy enough to freeze to never pay full price. The non-perishables are easy as you don't have to worry about spoilage. Soap you catch on sale+coupon for less than half price is worth buying to the limit, and putting in a closet. Ex Dove soap (as the husband, I'm not about to make an issue of a brand preference. This product is good for the mrs skin in winter) - reg price $1.49. CVS had a whacky deal that offered a rebate on Dove purchase of $20, and in the end, I paid $10 for 40 bars of soap. 2 yrs worth, but 1/6 the price. This type of strategy can raise your spending in the first month or two, but then you find you have the high runners \"\"in stock\"\" and as you use products from the pantry or freezer, your spending drops quite a bit. If this concept seems overwhelming, start with the top X items you buy. As stated, the one a year purchases save you far less than the things you buy weekly/monthly.\"",
"title": ""
},
{
"docid": "986483aca79fc08b760992585b15ae69",
"text": "Only select items. First - I agree, beware the Goldfish Factor - any of those items may very well lead to greater consumption, which will impact your waistline worse than your bottom line. And, in this category, chips, and snacks in general, you'll typically get twice the size bag for the same price as supermarket. For a large family, this might work ok. If one is interested in saving on grocery items, the very first step is to get familiar with the unit cost (often cents per ounce) of most items you buy. Warehouse store or not, this knowledge will make you a better buyer. In general, the papergoods/toiletries are cheaper than at the store but not as cheap as the big sale/coupon cost at the supermarket or pharmacy (CVS/RiteAid). So if you pay attention you may always be stocked up from other sources. All that said, there are many items that easily cover our membership cost (for Costco). The meat, beef tenderloin, $8.99, I can pay up to $18 at the supermarket or butcher. Big shrimp (12 to the lb), $9.50/lb, easily $15 at fish dept. Funny, I buy the carrots JCarter mentioned. They are less than half supermarket price per lb, so I am ahead if we throw out the last 1/4 of the bag. More often than not, it's used up 100%. Truth is, everyone will have a different experience at these stores. Costco will refund membership up to the very end, so why not try it, and see if the visit is worth it? Last year, I read and wrote a review of a book titled The Paradox of Choice. The book's premise was the diminishing return that come with too many things to choose from. In my review, I observed how a benefit of Costco is the lack of choice, there's one or two brands for most items, not dozens. If you give this a bit of thought, it's actually a benefit.",
"title": ""
},
{
"docid": "f39eba6a37896fac2e52cb2e048b1257",
"text": "Get to now and grab your top picks rapidly! Items have just begun coming up short on stock. What's more, you won't have any desire to in any case make a miss at your end. On the off chance that it is in this way, at that point with no hesitation, be snappy and punch on purchase choice. Men footwear, ladies footwear, attire, home machines and IPHONE 7 SALE are largely accessible online at a reasonable range. Shopallitem.com is one of such online focuses where you can locate the best of items at a decent cost.",
"title": ""
},
{
"docid": "8eaab055df50d8a72ebae3594526aee2",
"text": "The best way to stop wasting food is to create a weekly plan. Every weekend, before making your grocery shopping, take 30-60 mins and plan (with your spouse if your married) for the next week's meals. It doesn't need to be too detailed, but it'll help you to approximate what you need in terms of food for the whole week and buy accordingly. I have a similar problem where I need to go out often and also work a lot. But spending some time on the weekend to create a plan helps me minimize my wastage a lot. My inspiration to do this has been from the below 2 articles from Trent in SimpleDollar http://www.thesimpledollar.com/2008/10/16/how-to-plan-ahead-for-next-weeks-meals-and-save-significant-money-a-step-by-step-guide/ http://www.thesimpledollar.com/2007/09/15/the-one-hour-project-plan-your-meals-for-one-week-in-advance/",
"title": ""
},
{
"docid": "4a600810d2d561c09f29ed87bc382643",
"text": "I think that one change you can make which can make a significant impact to your cash flow is not eating out, if you tend to do so a lot. My family used to eat out at least once a week, and we've cut it out entirely, saving about $200 a month.",
"title": ""
},
{
"docid": "7aecd12e2a8444b2412e51189811e120",
"text": "here is what I have learned with multiple close encounters with bankruptcies: ask yourself.. what if I save vs what if I spend? say you like a new shirt.. ask yourself what can you do saving $40 vs rewarding yourself/your well wishers right away? you will end up spending. just like you the other person needs money. he/she is doing a work. ask yourself what if you are in his/her situation. you would obviously want others to be happy. so spend. I think these two should be good. I must add that you should NOT be wasteful. Eg.. buying a handmade shoes vs corporation made shoes? choose handmade one because it fits above two. buying a corporate one would be more polluting and less rewarding because you just gave your money to someone who already has lots and cares least about you. in what way are you saying mortgage is good? I see that as a waste. you can pay back your mortgage only when someone takes even bigger mortgage (check with some maths before refuting)... in other words you have taken part in ponzi scheme.! I would suggest making a house vs buying one is better spending. finally spending is a best saving.. don't forget that you are getting money only because someone is spending wisely. stop feeding your money to corporates and interests and everyone will have plenty to spend.",
"title": ""
},
{
"docid": "f1765352052439e2ca03c2798aca520e",
"text": "Shopping is easy, I don't want to buy it, carry it around, store it in my home or wear it. It is just an opinion about whatever the shopping is for. When I don't want to spend the money on dining out, I just say I am broke and I will catch up next time. Since they are my friends they understand and don't get too upset. (like msemack says, if they get upset about it I don't think I would really care to spend time with them anyway) While I am a big fan or eating at home and being cheap, I also recognize that my desire to spend money and have fun can't be suppressed for too long: make a budget item for having fun and spend some of your money on a good time with your friends and family. Make a date night with your spouse or friends and control when and where you go so your can control your budget.",
"title": ""
},
{
"docid": "e30d65a9331eed60fad1b351169a52df",
"text": "\"I've seen various blog posts (mostly from Penelope Trunk) refer to \"\"optimizers\"\" versus \"\"settlers.\"\" The optimizers are the go-getters, the ones always on the move, trying to optimize their time, their life, their experience, etc. They tend to be younger, on average, live in bigger cities, and on the whole, tend to be less happy. The settlers are the ones who settle for what is, live in smaller cities, and tend to be happier, albeit \"\"less interesting\"\". Assuming that your idea of \"\"slowing down\"\" refers to moving away from that maximizer lifestyle, yes, I think you'll probably save money. Apparently it costs money to be unhappy! Going out for meals everyday, going out with friends every evening, shopping for the latest and greatest whatever, buying the newest gizmo, trading up your car every 3 years, traveling every other weekend to far-off places, making your life \"\"interesting\"\" - these all cost, and far more than their opposites. Take time to be happy with what you have - enjoy your comfortable and broken-in shoes, enjoy your paid-off car, enjoy some quiet alone time with a good (library) book, appreciate the delicate tastes of a homecooked meal over the in-your-face greasebomb of restaurant food, take a walk, shut off the latest Apple iDevice, and just be. You'll save money, find calm, and feel refreshed. *Apologies for waxing philosophical - though the connotations of \"\"slowing down\"\" sort of insist on it :).\"",
"title": ""
},
{
"docid": "4b65a7bc2e4502b2f706e84c5fc12f04",
"text": "\"As THEAO suggested, tracking spending is a great start. But how about this - Figure out the payment needed to get to zero debt in a reasonable time, 24 months, perhaps. If that's more than 15% of your income, maybe stretch a tiny bit to 30 months. If it's much less, send 15% to debt until it's paid, then flip the money to savings. From what's left, first budget the \"\"needs,\"\" rent, utilities, etc. Whatever you spend on food, try to cut back 10%. There is no budget for entertainment or clothes. The whole point is one must either live beneath their means, or increase their income. You've seen what can happen when the debt snowballs. In reality, with no debt to service and the savings growing, you'll find a way to prioritize spending. Some months you'll have to choose, dinner out, or a show. I agree with Keith's food bill, $300-$400/mo for 3 of us. Months with a holiday and large guest list throws that off, of course.\"",
"title": ""
},
{
"docid": "b131c244e5b41d0188aca3f0f93a143c",
"text": "\"In the end, this is really not a finance question. It's about changing one's habits. (One step removed, however, since you are helping a friend and not seeking advice for yourself). I've learned a simple cause & effect question - Does someone who wants (goal here) do (this current bad habit)? For example, someone with weight to lose is about to grab the chips to sit and watch TV. They should quickly ask themselves \"\"Does a healthy, energetic person sit in front of the TV eating chips?\"\" The friend needs to make a connection between the expense he'd like to save up for and his current actions. There's a conscious decision in making the takeout purchase, he'd rather spend the money on that meal than to save .5% (or whatever percent) of the trip's cost. If he is clueless in the kitchen, that opens another discussion, one in which I'd remark that on the short list of things parents should teach their kids, cooking is up there. My wife is clueless in the kitchen, I taught our daughter how to be comfortable enough to make her own meals when she wants or when she's off on her own. If this is truly your friend's issue, you might need to be a cooking spirit guide to be successful.\"",
"title": ""
},
{
"docid": "1b082b0e42603f36271a62e9c11a2b4b",
"text": "Well, I was actually just looking at my own 10-yr old. She does dance/ballet all year round and golf/tennis in the summer. Just the shoes, costumes, clubs, etc. run to about 1k. One dance lesson per week is about 1K/year (she does three). And summer golf/tennis lessons plus memberships about 1K. soccer and baseball are cheaper. but hockey is significantly more expensive - and you have to travel a lot all year round.",
"title": ""
},
{
"docid": "bf619eadd14b8b2972b677bf40bcbe6f",
"text": "\"For the most part, saving money usually depends upon having a budget and being able to stick to it. The toughest part of budgeting is usually setting it up (how much do I need for X) and sticking to it each month. In regards to sticking to it, there is software that you can use that helps figure out how much you are spending and how much you have left in a given category and they all pretty much do the same thing: track your spending and how much you have left in the category. If you are good with spreadsheets you might prefer that route (cost: free) but software that you can buy usually has value in that it can also generate reports that help you spot trends that you might not see in the spreadsheet. Sticking to a budget can be tough and a lot of what people have said already is good advice, but one thing that helps for me is having \"\"play money\"\" that can be used for whatever I want. In general this should be a fairly nominal amount ($20 or $40 a week) but it is enough that if you see a new book you want or what to go out for lunch one day you can do it without impacting the overall budget in some way. Likewise, having bigger savings goals can also be useful in that if times get tough it is easier to stop putting $100 a month to the side for a vacation than it is to cut back your grocery budget.\"",
"title": ""
},
{
"docid": "e04d9bd2f8e0286cee97e550d281ad51",
"text": "We started with our son about age 5 or so. He was at the time old enough to understand that you buy stuff using money. We don't give allowance, rather we made up a job chart that he can put checks on, and give him a small amount for each job that he does. This is meant to enforce the idea of 'work and get paid, don't work don't get paid', and associate the concept of work and money. We also try to teach him the concept of giving, spending and saving, by having envelopes with those words on them and dividing the 'commission' money between them. The give money is used for a charitable organization. The save money is used in a couple of ways - either to save for a large item that he wants, or to put into a savings account. The spend it money he is free to buy whatever he wants with. We got this plan from the Dave Ramsey Show, and it has been really good so far. The best thing about it is that when we are at the store and he sees something he wants, we can ask 'did you bring your money?' This keeps the begging down to a minimum and also helps us teach him to make a list of stuff he wants and can save for.",
"title": ""
},
{
"docid": "d4e224990a834d6a94e802252d5c6860",
"text": "\"There's no easy solution to this. Unfortunately I think you need a different approach, as you say, using software to track expenses to visualise the percentages and such hasn't helped and in my own experience this sort of money management does not work with all people. Maybe you need to look at the expenses and decide what you can cut out. Somehow we all need to make a distinction between what we need (milk, bread) and what we don't need (magazines, dvds) but still purchase every now and then. Sadly buying things for the second category quickly builds up a bill just as big as the one for the weekly shop only that it contains nothing of actual value and it just seems too easy for some to spend and equal amount of money on \"\"wants\"\" as on \"\"needs\"\" and if a substantial amount of your outgoings are in this category that's where you need to focus the discussion. If you can't find any purchases like that I suspect you need to buy less expensive food.\"",
"title": ""
},
{
"docid": "d6fb5dfeed1005cd27734739d326d854",
"text": "I have odd feet in that 80% of the shoes that are my size, don't fit unless I try them on. I can't and won't buy shoes online. Some things just do not work online. Clothing is also one of those things.",
"title": ""
}
] |
fiqa
|
61cf7f0cd16153a0ae850cd9f1ff3331
|
Is it wise to switch investment strategy frequently?
|
[
{
"docid": "a5c8705275013ea45e30d0c1aa7b95ce",
"text": "I understand you're trying to ask a narrow question, but you're basically asking whether you should time the market. You can find tons of books saying you shouldn't try it, and tons more confirming that you can. Both will have data and anecdotes to back them up. So I'll give you my own opinion. Market timing, especially in a macro sense, is a zero-sum game. Your first thought should be: I'm smarter than the average person; the average person is an idiot. However, remember that a whole lot of the money in the market is not controlled by idiots. You really need to ask yourself if you can compete with people who get paid to spend 12 hours a day trying to beat the market. Stick with a mid-range strategy for now. Your convictions aren't and shouldn't be strong enough at the moment to do otherwise. But, if you can't resist, I say go ahead and do what you feel. Regardless of what you do, your returns over the next 3 years won't be life changing. In the meantime, learn as much as you can about investing, and keep a journal of your investment activity to keep yourself honest.",
"title": ""
},
{
"docid": "6550eb8b1f267dd995068f20e63ae48f",
"text": "My super fund and I would say many other funds give you one free switch of strategies per year. Some suggest you should change from high growth option to a more balance option once you are say about 10 to 15 years from retirement, and then change to a more capital guaranteed option a few years from retirement. This is a more passive approach and has benefits as well as disadvantages. The benefit is that there is not much work involved, you just change your investment option based on your life stage, 2 to 3 times during your lifetime. This allows you to take more risk when you are young to aim for higher returns, take a balanced approach with moderate risk and returns during the middle part of your working life, and take less risk with lower returns (above inflation) during the latter part of your working life. A possible disadvantage of this strategy is you may be in the higher risk/ higher growth option during a market correction and then change to a more balanced option just when the market starts to pick up again. So your funds will be hit with large losses whilst the market is in retreat and just when things look to be getting better you change to a more balanced portfolio and miss out on the big gains. A second more active approach would be to track the market and change investment option as the market changes. One approach which shouldn't take much time is to track the index such as the ASX200 (if you investment option is mainly invested in the Australian stock market) with a 200 day Simple Moving Average (SMA). The concept is that if the index crosses above the 200 day SMA the market is bullish and if it crosses below it is bearish. See the chart below: This strategy will work well when the market is trending up or down but not very well when the market is going sideways, as you will be changing from aggressive to balanced and back too often. Possibly a more appropriate option would be a combination of the two. Use the first passive approach to change investment option from aggressive to balanced to capital guaranteed with your life stages, however use the second active approach to time the change. For example, if you were say in your late 40s now and were looking to change from aggressive to balanced in the near future, you could wait until the ASX200 crosses below the 200 day SMA before making the change. This way you could capture the majority of the uptrend (which could go on for years) before changing from the high growth/aggressive option to the balanced option. If you where after more control over your superannuation assets another option open to you is to start a SMSF, however I would recommend having at least $300K to $400K in assets before starting a SMSF, or else the annual costs would be too high as a percentage of your total super assets.",
"title": ""
},
{
"docid": "57c249bea8c7a7ebed4af1ebf4ca3ba7",
"text": "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.",
"title": ""
}
] |
[
{
"docid": "8b473900266d99d7287e105b68cc01dd",
"text": "\"You could end up with nothing, yes. I imagine those that worked at Enron years ago if their 401(k) was all in company stock would have ended up with nothing to give an example here. However, more likely is for you to end up with less than you thought as you see other choices as being better that with the benefit of hindsight you wish you had made different choices. The strategies will vary as some people will want something similar to a \"\"set it and forget it\"\" kind of investment and there may be fund choices where a fund has a targeted retirement date some years out into the future. These can be useful for people that don't want to do a lot of research and spend time deciding amongst various choices. Other people may prefer something a bit more active. In this case, you have to determine how much work do you want to do, do you want to review fund reviews on places like Morningstar, and do periodic reviews of your investments, etc. What works best for you is for you to resolve for yourself. As for risks, here are a few possible categories: Time - How many hours a week do you want to spend on this? How much time learning this do you want to do in the beginning? While this does apply to everyone, you have to figure out for yourself how much of a cost do you want to take here. Volatility - Some investments may fluctuate in value and this can cause issues for some people as it may change more than they would like. For example, if you invest rather aggressively, there may be times where you could have a -50% return in a year and that isn't really acceptable to some people. Inflation - Similarly to those investments that vary wildly there is also the risk that with time, prices generally rise and thus there is something to be said for the purchasing power of your investment. If you want to consider this in more detail consider what $1,000,000 would have bought 30 years ago compared to now. Currency risk - Some investments may be in other currencies and thus there is a risk of how different denominations may impact a return. Fees - How much do your fund's charge in the form of annual expense ratio? Are you aware of the charges being taken to manage your money here?\"",
"title": ""
},
{
"docid": "5af9d614536688e05b29550da45aeb55",
"text": "Yes, that's the risk. If the stock is bouncing around a lot your options could get assigned. If it heads south you now are the proud owner of more of a falling stock. It's good that you're looking to understand the risks of an investment method. That's important no matter what the method is.",
"title": ""
},
{
"docid": "3f9e5de579b5f93a6f62a45d4bce105d",
"text": "\"You should establish a strategy -- eg a specific mix of investments/funds which has the long-term tradeofv of risk, returns, and diversification you want -- and stick to that strategy, rebalancing periodically to maintain your strategic ratios betwedn those investments. Yes, that means you will somettimes sell things that have been doing well and buy others that have been doing less well -- but that's to be expected; it's exactly what happens when you \"\"buy low, sell high\"\".\"",
"title": ""
},
{
"docid": "d70152525800602decbf682eefed81ff",
"text": "\"Remind yourself that markets recover, usually within a few years. If you believe this and can remind yourself of this, you will be able to see the down cycles of the market as an opportunity to buy stock \"\"on sale\"\". No one knows the future, so many people have found investing on a regular schedule to be helpful. By putting in the same amount of money each period, you will end up buying fewer shares when the market is up, and more when it is down. As long as your time horizon is appropriate, you should be able to wait out the ups and downs. Stocks are volatile by their very nature, so if you find that you are very concerned by this, you might want to consider whether you should adjust the amount of risk in your investments, since over time, most people lose money by trying to \"\"time\"\" the market. However, if your investment goals and requirements haven't changed, there likely isn't any need to change the types of assets you are investing in, as what you are choosing to invest in should depend on your personal situation. Edit: I am assuming you want to be a long-term investor and owner, making money by owning a portion of companies' profits, and not by trading stocks and/or speculation.\"",
"title": ""
},
{
"docid": "e2a054405fb83d902a7776b9cb3ec8a2",
"text": "\"Diversification is the only real free lunch in finance (reduction in risk without any reduction in expected returns), so clearly every good answer to your question will be \"\"yes.\"\" Diversification is good.\"\" Let's talk about many details your question solicits. Many funds are already pretty diversified. If you buy a mutual fund, you are generally already getting a large portion of the gains from diversification. There is a very large difference between the unnecessary risk in your portfolio if you only hold a couple of stocks and if you hold a mutual fund. Should you be diversified across mutual funds as well? It depends on what your funds are. Many funds, such as target-date funds, are intended to be your sole investment. If you have funds covering every major asset class, then there may not be any additional benefit to buying other funds. You probably could not have picked your \"\"favorite fund\"\" early on. As humans, we have cognitive biases that make us think we knew things early on that we did not. I'm sure at some point at the very beginning you had a positive feeling toward that fund. Today you regret not acting on it and putting all your money there. But the number of such feelings is very large and if you acted on all those, you would do a lot of crazy and harmful things. You didn't know early on which fund would do well. You could just as well have had a good feeling about a fund that subsequently did much worse than your diversified portfolio did. The advice you have had about your portfolio probably isn't based on sound finance theory. You say you have always kept your investments in line with your age. This implies that you believe the guidelines given you by your broker or financial advisor are based in finance theory. Generally speaking, they are not. They are rules of thumb that seemed good to someone but are not rigorously proven either in theory or empirics. For example the notion that you should slowly shift your investments from speculative to conservative as you age is not based on sound finance theory. It just seems good to the people who give advice on such things. Nothing particularly wrong with it, I guess, but it's not remotely on par with the general concept of being well-diversified. The latter is extremely well established and verified, both in theory and in practice. Don't confuse the concept of diversification with the specific advice you have received from your advisor. A fund averaging very good returns is not an anomaly--at least going forward it will not be. There are many thousand funds and a large distribution in their historical performance. Just by random chance, some funds will have a truly outstanding track record. Perhaps the manager really was skilled. However, very careful empirical testing has shown the following: (1) You, me, and people whose profession it is to select outperforming mutual funds are unable to reliably detect which ones will outperform, except in hindsight (2) A fund that has outperformed, even over a long horizon, is not more likely to outperform in the future. No one is stopping you from putting all your money in that fund. Depending on its investment objective, you may even have decent diversification if you do so. However, please be aware that if you move your money based on historical outperformance, you will be acting on the same cognitive bias that makes gamblers believe they are on a \"\"hot streak\"\" and \"\"can't lose.\"\" They can, and so can you. ======== Edit to answer a more specific line of questions =========== One of your questions is whether it makes sense to buy a number of mutual funds as part of your diversification strategy. This is a slightly more subtle question and I will indicate where there is uncertainty in my answer. Diversifying across asset classes. Most of the gains from diversification are available in a single fund. There is a lot of idiosyncratic risk in one or two stocks and much less in a collection of hundreds of stocks, which is what any mutual fund will hold. Still,you will probably want at least a couple of funds in your portfolio. I will list them from most important to least and I will assume the bulk of your portfolio is in a total US equity fund (or S&P500-style fund) so that you are almost completely diversified already. Risky Bonds. These are corporate, municipal, sovereign debt, and long-term treasury debt funds. There is almost certainly a good deal to be gained by having a portion of your portfolio in bonds, and normally a total market fund will not include bond exposure. Bonds fund returns are closely related to interest rate and inflation changes. They are also exposed to some market risk but it's more efficient to get that from equity. The bond market is very large, so if you did market weights you would have more in bonds than in equity. Normally people do not do this, though. Instead you can get the exposure to interest rates by holding a lesser amount in longer-term bonds, rather than more in shorter-term bonds. I don't believe in shifting your weights toward nor away from this type of bond (as opposed to equity) as you age so if you are getting that advice, know that it is not well-founded in theory. Whatever your relative weight in risky bonds when you are young is should also be your weight when you are older. International. There are probably some gains from having some exposure to international markets, although these have decreased over time as economies have become more integrated. If we followed market weights, you would actually put half your equity weight in an international fund. Because international funds are taxed differently (gains are always taxed at the short-term capital gains rate) and because they have higher management fees, most people make only a small investment to international funds, if any at all. Emerging markets International funds often ignore emerging markets in order to maintain liquidity and low fees. You can get some exposure to these markets through emerging markets funds. However, the value of public equity in emerging markets is small when compared with that of developed markets, so according to finance theory, your investment in them should be small as well. That's a theoretical, not an empirical result. Emerging market funds charge high fees as well, so this one is kind of up to your taste. I can't say whether it will work out in the future. Real estate. You may want to get exposure to real estate by buying a real-estate fund (REIT). Though, if you own a house you are already exposed to the real estate market, perhaps more than you want to be. REITs often invest in commercial real estate, which is a little different from the residential market. Small Cap. Although total market funds invest in all capitalization levels, the market is so skewed toward large firms that many total market funds don't have any significant small cap exposure. It's common for individuals to hold a small cap fund to compensate for this, but it's not actually required by investment theory. In principle, the most diversified portfolio should be market-cap weighted, so small cap should have negligible weight in your portfolio. Many people hold small cap because historically it has outperformed large cap firms of equal risk, but this trend is uncertain. Many researchers feel that the small cap \"\"premium\"\" may have been a short-term artifact in the data. Given these facts and the fact that small-cap funds charge higher fees, it may make sense to pass on this asset class. Depends on your opinion and beliefs. Value (or Growth) Funds. Half the market can be classed as \"\"value\"\", while the other half is \"\"growth.\"\" Your total market fund should have equal representation in both so there is no diversification reason to buy a special value or growth fund. Historically, value funds have outperformed over long horizons and many researchers think this will continue, but it's not exactly mandated by the theory. If you choose to skew your portfolio by buying one of these, it should be a value fund. Sector funds. There is, in general, no diversification reason to buy funds that invest in a particular sector. If you are trying to hedge your income (like trying to avoid investing in the tech sector because you work in that sector) or your costs (buying energy because you buy use a disproportionate amount of energy) I could imagine you buying one of these funds. Risk-free bonds. Funds specializing in short-term treasuries or short-term high-quality bonds of other types are basically a substitute for a savings account, CD, money market fund, or other cash equivalent. Use as appropriate but there is little diversification here per se. In short, there is some value in diversifying across asset classes, and it is open to opinion how much you should do. Less well-justified is diversifying across managers within the same asset class. There's very little if any advantage to doing that.\"",
"title": ""
},
{
"docid": "0f5a70f95e5116b2bace5ba67275d86f",
"text": "You miss the step where the return being doubled is daily. Consider you invested $100 today, went up 10%, and tomorrow you went down 10%. Third day market went up 1.01% and without leverage - got even. Here's the calculation for you: day - start - end 1 $100 $120 - +10% doubled 2 $120 $96 - -10% doubled 3 $96 $97.94 - +1.01% doubled So in fact you're in $2.06 loss, while without leveraging you would break even. That means that if the trend is generally positive, but volatile - you'll end up barely breaking even while the non-leveraged investment would make profits. That's what the quote means. edit to summarize the long and fruitless discussion in the comments: The reason that the leveraged ETF's are very good for day-trading is exactly the same reason why they are bad for continuous investment. You should buy them when there's a reasonable expectation for the market to immediately go in the direction you expect. If for whatever reason you believe the markets will plunge, or soar, tomorrow - you should buy a leveraged ETF, ride the plunge, and sell it in the end of the day. But you asked the question about volatile markets, not markets going in one direction. There - you lose.",
"title": ""
},
{
"docid": "231edf979c5c89266277168a74e11be4",
"text": "\"There is no rule-of-thumb that fits every person and every situation. However, the reasons why this advice is generally applicable to most people are simple. Why it is good to be more aggressive when you are young The stock market has historically gone up, on average, over the long term. However, on its way up, it has ups and downs. If you won't need your investment returns for many years to come, you can afford to put a large portion of your investment into the volatile stock market, because you have plenty of time for the market to recover from temporary downturns. Why it is good to be more conservative when you are older Over a short-term period, there is no certainty that the stock market will go up. When you are in retirement, most people withdraw/sell their investments for income. (And once you reach a certain age, you are required to withdraw some of your retirement savings.) If the market is in a temporary downturn, you would be forced to \"\"sell low,\"\" losing a significant portion of your investment. Exceptions Of course, there are exceptions to these guidelines. If you are a young person who can't help but watch your investments closely and gets depressed when seeing the value go down during a market downturn, perhaps you should move some of your investment out of stocks. It will cost you money in the long term, but may help you sleep at night. If you are retired, but have more saved than you could possibly need, you can afford to risk more in the stock market. On average, you'll come out ahead, and if a downturn happens when you need to sell, it won't affect your overall situation much.\"",
"title": ""
},
{
"docid": "0e67e45b5854d2f1613136954e4faf30",
"text": "\"There's a few layers to the Momentum Theory discussed in that book. But speaking in general terms I can answer the following: Kind of. Assuming you understand that historically the Nasdaq has seen a little more volatility than the S&P. And, more importantly, that it tends to track the tech sector more than the general economy. Thus the pitfall is that it is heavily weighted towards (and often tracks) the performance of a few stocks including: Apple, Google (Alphabet), Microsoft, Amazon, Intel and Amgen. It could be argued this is counter intuitive to the general strategy you are trying to employ. This could be tougher to justify. The reason it is potentially not a great idea has less to do with the fact that gold has factors other than just risk on/off and inflation that affect its price (even though it does!); but more to do with the fact that it is harder to own gold and move in and out of positions efficiently than it is a bond index fund. For example, consider buying physical gold. To do so you have to spend some time evaluating the purchase, you are usually paying a slight premium above the spot price to purchase it, and you should usually also have some form of security or insurance for it. So, it has additional costs. Possibly worth it as part of a long-term investment strategy; if you believe gold will appreciate over a decade. But not so much if you are holding it for as little as a few weeks and constantly moving in and out of the position over the year. The same is true to some extent of investing in gold in the form of an ETF. At least a portion of \"\"their gold\"\" comes from paper or futures contracts which must be rolled every month. This creates a slight inefficiency. While possibly not a deal breaker, it would not be as attractive to someone trading on momentum versus fundamentals in my opinion. In the end though, I think all strategies are adaptable. And if you feel gold will be the big mover this year, and want to use it as your risk hedge, who am I or anyone else to tell you that you shouldn't.\"",
"title": ""
},
{
"docid": "e7777b222351bc03f73b9c5d9a640863",
"text": "Your asset mix should reflect your own risk tolerance. Whatever the ideal answer to your question, it requires you to have good timing, not once, but twice. Let me offer a personal example. In 2007, the S&P hit its short term peak at 1550 or so. As it tanked in the crisis, a coworker shared with me that he went to cash, on the way down, selling out at about 1100. At the bottom, 670 or so, I congratulated his brilliance (sarcasm here) and as it passed 1300 just 2 years later, again mentions how he must be thrilled he doubled his money. He admitted he was still in cash. Done with stocks. So he was worse off than had he held on to his pre-crash assets. For sake of disclosure, my own mix at the time was 100% stock. That's not a recommendation, just a reflection of how my wife and I were invested. We retired early, and after the 2013 excellent year, moved to a mix closer to 75/25. At any time, a crisis hits, and we have 5-6 years spending money to let the market recover. If a Japanesque long term decline occurs, Social Security kicks in for us in 8 years. If my intent wasn't 100% clear, I'm suggesting your long term investing should always reflect your own risk tolerance, not some short term gut feel that disaster is around the corner.",
"title": ""
},
{
"docid": "70f92e1cbd5319e81153759253123fba",
"text": "Some financial planners would not advise one way or the other on a specific stock without knowing your investment strategy... if you didn't have one, their goal would be to help you develop one and introduce you to a portfolio management framework like Asset Allocation. Is a two of clubs a good card? Well, that all depends on what is in your hand (diversification) and what game you are playing(investing strategy). One possibility to reduce your basis over time if you would like to hold the stock is to sell calls against it, known as a 'covered-call'. It can be an intermediate-term (30-60+ months depending on option pricing) trading strategy that may require you to upgrade your brokerage account to allow option trades. Personally I like this strategy because it makes me feel proactive about my portfolio rather than sitting on the side lines and watching stocks move.",
"title": ""
},
{
"docid": "4aa7f04b3f72b185e998403e1c10bcfc",
"text": "\"I think you're on the right track with that strategy. If you want to learn more about this strategy, I'd recommend \"\"The Intelligent Asset Allocator\"\" by William Bernstein. As for the Über–Tuber portfolio you linked to, my only concern would be that it is diversified in everything except for the short-term bond component, which is 40%. It might be worth looking at some portfolios that have more than one bond allocation -- possibly diversifying more across corporate vs government, and intermediate vs short term. Even the Cheapskate's portfolio located immediately above the Über–Tuber has 20% Corporate and 20% Government. Also note that they mention: Because it includes so many funds, it would be expensive and unwieldy for an account less than $100,000. Regarding your question about the disadvantages of an index-fund-based asset allocation strategy:\"",
"title": ""
},
{
"docid": "254c336ef13d8ca00921bd8e72ca8e4f",
"text": "\"If you are already invested in a particular stock, I like JoeTaxpayer's answer. Think about it as if you are re-buying the stocks you own every day you decide to keep them and don't set emotional anchor points about what you paid for them or what they might be worth tomorrow. These lead to two major logical fallacies that investor's commonly fall prey to, Loss Aversion and Sunk Cost, both of which can be bad for your portfolio in the long run. To avert these natural tendencies, I suggest having a game plan before you purchase a stock based on on your investment goals for that stock. For example a combination of one or more of the following: I'm investing for the long term and I expect this stock to appreciate and will hold it until (specific event/time) at which point I will (sell it all/sell it gradually over a fixed time period) right around the time I need the money. I'm going to bail on this stock if it falls more than X % from my purchase price. I'm going to cash out (all/half/some) of this investment if it gains more than x % from my purchase price to lock in my returns. The important thing is to arrive at a strategy before you are invested and are likely to be more emotional than rational. Otherwise, it can be very hard to sell a \"\"hot\"\" stock that has suddenly jumped in price 25% because \"\"it has momentum\"\" (gambler's fallacy). Conversely it can be hard to sell a stock when it drops by 25% because \"\"I know it will bounce back eventually\"\" (Sunk Cost/Loss Aversion Fallacy). Also, remember that there is opportunity cost from sticking with a losing investment because your brain is saying \"\"I really haven't lost money until I give up and sell it.\"\" When logically you should be thinking, \"\"If I move my money to a more promising investment I could get a better return than I am likely to on what I'm holding.\"\"\"",
"title": ""
},
{
"docid": "504c08e32f4e3ff825c97a72198693ce",
"text": "\"It depends on what you're talking about. If this is for your retirement accounts, like IRAs, then ABSOLUTELY NOT! In your retirement accounts you should be broadly diversified - not just between stocks, but also other markets like bonds. Target retirement funds and solid conservative or moderate allocation funds are the best 'quick-and-dirty' recommendation for those accounts. Since it's for the long haul, you want to be managing risk, not chasing returns. Returns will happen over the 40 or so years they have to grow. Now, if you're talking about a taxable stock account, and you've gotten past PF questions like \"\"am I saving enough for retirement\"\", and \"\"have I paid off my debt\"\", then the question becomes a little more murky. First, yes, you should be diversified. The bulk of how a stock's movement will be in keeping with how its sector moves; so even a really great stock can get creamed if its sector is going down. Diversification between several sectors will help balance that. However, you will have some advantage in this sector. Knowing which products are good, which products everybody in the industry is excited about, is a huge advantage over other investors. It'll help you pick the ones that go up more when the sector goes up, and down less when the sector goes down. That, over time and investments, really adds up. Just remember that a good company and a good stock investment are not the same thing. A great company can have a sky-high valuation -- and if you buy it at that price, you can sit there and watch your investment sink even as the company is growing and doing great things. Have patience, know which companies are good and which are bad, and wait for the price to come to you. One final note: it also depends on what spot you are in. If you're a young guy looking looking to invest his first few thousand in the market, then go for it. On the other hand, if you're older, and we're talking about a couple hundred grand you've got saved up, then it's a whole different ball of wax. It that spot, you're back to managing risk, and need to build a solid portfolio, at a measured pace.\"",
"title": ""
},
{
"docid": "9bf988e60c7d6f75628cde268e8d6e3f",
"text": "\"Vanguard released an analysis paper in 2013 titled \"\"Dollar-cost averaging just means taking risk later.\"\" This paper explores the performance difference(s) between a dollar-cost averaging strategy and a lump sum strategy when you already possess the funds. This paper is an excellent read but the conclusion from the executive summary is: We conclude that if an investor expects such trends to continue, is satisfied with his or her target asset allocation, and is comfortable with the risk/return characteristics of each strategy, the prudent action is investing the lump sum immediately to gain exposure to the markets as soon as possible. The caveat to the conclusion is weighing your emotions. If you are primarily concerned with minimizing the possibility of a loss then you should use a dollar cost averaging strategy with the understanding that, on a purely mathematical basis, the dollar cost averaging strategy is likely to under-perform a lump sum investment of the funds. The paper explores a 10 year holding period with either: The analysis includes various portfolio blends and is backtested against the United States, United Kingdom and Australian markets. Based on this, as far as I'm concerned, the rule of thumb is invest the lump sum if you're going to invest at all.\"",
"title": ""
},
{
"docid": "98ddd1dc09381088b4b6ac1ea095b6dc",
"text": "When people are crowing about their achievements, they often take liberties with those achievements. Vitalik's interpretation -- net worth, is probably what you would naturally come to mind. But when someone is bragging, that could mean anything -- $1M of total revenue.",
"title": ""
}
] |
fiqa
|
4a906242650c4fab501c96def0a18275
|
How much house can a retired person afford
|
[
{
"docid": "b906cdacb29255d729eb9ce051426cc4",
"text": "\"Consider property taxes (school, municipal, county, etc.) summing to 10% of the property value. So each year, another .02N is removed. Assume the property value rises with inflation. Allow for a 5% after inflation return on a 70/30 stock bond mix for N. After inflation return. Let's assume a 20% rate. And let's bump the .05N after inflation to .07N before inflation. Inflation is still taxable. Result Drop in value of investment funds due to purchase. Return after inflation. After-inflation return minus property taxes. Taxes are on the return including inflation, so we'll assume .06N and a 20% rate (may be lower than that, but better safe than sorry). Amount left. If no property, you would have .036N to live on after taxes. But with the property, that drops to .008N. Given the constraints of the problem, .008N could be anywhere from $8k to $80k. So if we ignore housing, can you live on $8k a year? If so, then no problem. If not, then you need to constrain N more or make do with less house. On the bright side, you don't have to pay rent out of the .008N. You still need housing out of the .036N without the house. These formulas should be considered examples. I don't know how much your property taxes might be. Nor do I know how much you'll pay in taxes. Heck, I don't know that you'll average a 5% return after inflation. You may have to put some of the money into cash equivalents with negligible return. But this should allow you to research more what your situation really is. If we set returns to 3.5% after inflation and 2.4% after inflation and taxes, that changes the numbers slightly but importantly. The \"\"no house\"\" number becomes .024N. The \"\"with house\"\" number becomes So that's $24,000 (which needs to include rent) versus -$800 (no rent needed). There is not enough money in that plan to have any remainder to live on in the \"\"with house\"\" option. Given the constraints for N and these assumptions about returns, you would be $800 to $8000 short every year. This continues to assume that property taxes are 10% of the property value annually. Lower property taxes would of course make this better. Higher property taxes would be even less feasible. When comparing to people with homes, remember the option of selling the home. If you sell your .2N home for .2N and buy a .08N condo instead, that's not just .12N more that is invested. You'll also have less tied up with property taxes. It's a lot easier to live on $20k than $8k. Or do a reverse mortgage where the lender pays the property taxes. You'll get some more savings up front, have a place to live while you're alive, and save money annually. There are options with a house that you don't have without one.\"",
"title": ""
},
{
"docid": "d4fd86258ec74ae357c703e1e22ab911",
"text": "Consider a single person with a net worth of N where N is between one and ten million dollars. has no source of income other than his investments How much dividends and interest do your investments return every year? At 5%, a US$10M investment returns $500K/annum. Assuming you have no tax shelters, you'd pay about $50% (fed and state) income tax. https://budgeting.thenest.com/much-income-should-spent-mortgage-10138.html A prudent income multiplier for home ownership is 3x gross income. Thus, you should be able to comfortably afford a $1.5M house. Of course, huge CC debt load, ginormous property taxes and the (full) 5 car garage needed to maintain your status with the Joneses will rapidly eat into that $500K.",
"title": ""
}
] |
[
{
"docid": "94b7b27feac8a3dcef63056fa43001dd",
"text": "It seems like you are asking two different questions, one is, how do I know if I can afford a house? The other is, how do I know what type of mortage to get? The first question is fairly simple to answer, there's plenty of calculators out there that will tell you what you can afford, but rule of thumb is 30% of income can goto housing. Now what type of mortgage to get can be much more confusing, because the mortgage industry makes money off of these confusing products. The best thing to do in my opionion in situations like this is to keep it simple. You need to be careful buying a house. So much money is changing hands and there are so many parasites involved in the transaction I would be extremely wary of anybody who is going to tell you what mortgage to get. I've never heard of a fee only independent mortgage broker, and if I found one that claimed to be I wouldn't believe him. I would just ignore all the exotic non-conforming products and just answer one simple question. Are you the type of person that buys an insurance policy or that likes to self insure? If you like insurance, get a 30 year fixed mortgage. If you like to self insure, get a 7 year ARM. The average lenghth someone owns a house is 7 years, plus in 7 years time, it might not adjust up, and even if it does, you can just accelerate your payments and pay it off quickly (this is the self insurance part of it). If you're like me, I'm willing to pay an extra .5% for the 30 year so that my payment never changes and I'm never forced to move (which is admitedly extremely unlikely, but I like the safety). I don't like 15 year term loans because rates are so low, you can get way better returns in the stock market right now, so why pay off sooner then you need to. Heck, if I had a paid off house right now I'd refi into a 30 year and invest the money. In summary, pick 30 year or ARM, then just shop around to find the lowest rate (which is extremely easy).",
"title": ""
},
{
"docid": "b53f7aa9e406ea773a4b45621660c971",
"text": "Your first home can be up to £450,000 today. But that figure is unlikely to stay the same over 40 years. The government would need to raise it in line with inflation otherwise in 40 years you won't be able to buy quite so much with it. If inflation averages 2% over your 40 year investment period say, £450,000 would buy you roughly what £200,000 would today. Higher rates of inflation will reduce your purchasing power even faster. You pay stamp duty on a house. For a house worth £450,000 that would be around £12,500. There are also estate agent's fees (typically 1-2% of the purchase price, although you might be able to do better) and legal fees. If you sell quickly you'd only be able to access the balance of the money less all those taxes and fees. That's quite a bit of your bonus lost so why did you tie your money up in a LISA for all those years instead of investing in the stock market directly? One other thing to note is that you buy a LISA from your post tax income. You pay into a pension using your pre-tax income so if you're investing for your retirement then a pension will start with a 20% bonus if you're a lower rate taxpayer and a whopping 40% bonus if you're a higher rate taxpayer. If you're a higher rate taxpayer a pension is much better value.",
"title": ""
},
{
"docid": "63b244d1a98fc9f19affcb3534ffbda8",
"text": "I want to know ideally how much should a person save for retirement funds? A person should save enough such that your total retirement resources will equal the amount you personally need for a comfortable retirement at the point in time when the person desires to retire. If you want to retire at 40, you may need to save quite a lot each year. If you want to retire at 70, you may need to save less each year. If you will have a pension, you may wish to save somewhat less than someone who won't have a pension. The same is true for Social Security (or your local equivalent). I am getting a feeling retirement funds is equal to financial independence because one can live without needing to borrow money from anyone. Sort of, but it depends on your goals. Some who are financially independent never choose to retire, but choose jobs without regard to financial need.",
"title": ""
},
{
"docid": "85900ebc68789698db6be8a22f18f029",
"text": "As others have shown, if you assume that you can get 6% and you invest 15% of a reasonable US salary then you can hit 1 million by the time you retire. If you invest in property in a market like the UK (where I come from...) then insane house price inflation will do it for you as well. In 1968 my parents bought a house for £8000. They had a mortgage on it for about 75% of the value. They don't live there but that house is now valued at about £750,000. Okay, that's close to 60 years, but with a 55 year working life that's not so unreasonable. If you assume the property market (or the shares market) can go on rising forever... then invest in as much property as you can with your 15% as mortgage payments... and watch the million roll in. Of course, you've also got rent on your property portfolio as well in the intervening years. However, take the long view. Inflation will hit what a million is worth. In 1968, a million was a ridiculously huge amount of money. Now it's 'Pah, so what, real rich people have billions'. You'll get your million and it will not be enough to retire comfortably on! In 1968 my parents salaries as skilled people were about £2000 a year... equivalent jobs now pay closer to £50,000... 25x salary inflation in the time. Do that again, skilled professional salary in 60 years of £125000 a year... so your million is actually 4 years salary. Not being relentlessly negative... just suggesting that a financial target like 'own a million (dollars)' isn't a good strategy. 'Own something that yields a decent amount of money' is a better one.",
"title": ""
},
{
"docid": "1a55e6ac7a7a6ff0ea4a5e2d951c59ee",
"text": "\"A primary residence can be an admirable investment/retirement vehicle for a number of reasons. The tax savings on the mortgage are negligible compared to these. A $200,000 mortgage might result in a $2000 annual savings on your taxes -- but a $350,000 house might easily appreciate $20,000 (tax free!) in a good year. Some reasons to not buy a larger house. Getting into or out of a house is tremendously expensive and inconvenient. It can make some life-changes (including retirement) more difficult. There is no way to \"\"diversify\"\" a primary residence. You have one investment and you are a hostage to its fortunes. The shopping center down the street goes defunct and its ruins becomes a magnet for criminals and derelicts? Your next-door neighbor is a lunatic or a pyromaniac? A big hurricane hits your county? Ha-ha, now you're screwed. As they say in the Army, BOHICA: bend over, here it comes again. Even if nothing bad happens, you are paying to \"\"enjoy\"\" a bigger house whether you enjoy it or not. Eating spaghetti from paper plates, sitting on the floor of your enormous, empty dining room, may be romantic when you're 27. When you're 57, it may be considerably less fun. Speaking for myself, both my salary and my investment income have varied wildly, and often discouragingly, over my life, but my habit of buying and renovating dilapidated homes in chic neighborhoods has brought me six figures a year, year after year after year. tl;dr the mortgage-interest deduction is the smallest of many reasons to invest in residential real-estate, but there are good reasons not to.\"",
"title": ""
},
{
"docid": "2f426109acac2cb990efbc3b3026274f",
"text": "You work backwards. A top-down budget. i.e. 'bottom-up' is to list what you want, and perhaps find that there's nothing left for retirement savings, top-down divides from your gross income down to each expense. Say you make $60000/yr, $5000/mo. $1250 is about what you can spend on housing. You can go with the smallest apartment you can tolerate, a tiny 2 BR with roommate, or get the biggest apartment or house you can afford for this money. In the end, this question may be closed as 'opinion-based.' It's not simple to answer and it's more about your own preferences. Quality of life is more than your house/apt size. I've known people who lived in tiny spaces, and used public transportation, but took 3 week-long trips each year. Others who lived in big houses, drove fancy cars, and somehow when their first kid entered high school, realized they had saved nothing for college. Decide on your own priorities and tilt the budget to reflect that.",
"title": ""
},
{
"docid": "53b62a34f0578acb43007f4c1bd73f71",
"text": "To me, the simple answer might be to tap the equity in the $400k home you owe $77k on and use the proceeds to purchase the new retirement home. Even if you were to do that, you'd still have almost $100k in untapped equity in the existing home, no mortgage on the retirement home, nothing out of pocket (other than refi fees), and probably no more of a mortgage payment than you already have on the house with equity. I don't see any reason why the bank wouldn't go for that, especially if you've got a good payment history on your existing mortgage. I hope this helps. Good luck!",
"title": ""
},
{
"docid": "ce37deb1b4b12f1c4a2d3fed25722ad9",
"text": "I just wanted to add one factor to the other answers. The cost of maintenance etc. is not a fraction of the cost of financing - it is more likely a fraction of the value of the house, and a function of its age. If you say you need to replace a roof every 25 years, and that costs $10,000 (depends on the size of the house, obviously), then you need to set aside $400 a year for roof repair. Other costs (painting, flooring, kitchen, bathrooms, water heaters, heating, AC, yard upkeep etc) can be roughly estimated in the same way. A rule of thumb is 1% of the value of the house per year to cover all big-ticket maintenance. If you pay 4% mortgage, that would increase the reserve by 25%; but if interest rates rise, the fraction may be smaller (I remember paying over 10% mortgage...). In general, whether keeping a property for long term rental income (with the potential for appreciation - but prices can go up and down) is a good idea will largely depend on your ability to predict future costs and value. If you have a variable mortgage, that will be harder to do.",
"title": ""
},
{
"docid": "9064eb9ea18e4a5b75e204f2f68cd2bd",
"text": "\"I find this very hard to believe Believe it. The bottom quarter of American households have negative net worth, and the bottom three quarters have no more than a tiny amount saved up. https://en.wikipedia.org/wiki/Wealth_in_the_United_States#/media/File:MeanNetWorth2007.png In an emergency, 63% of Americans would not be able to come up with $500 without going into debt. http://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-americans-dont-have-enough-savings-to-cover-a-500-emergency/ Nobody can retire with 5k in the U.S. The money will be gone within a year. Is it possible? Now you begin to see why the long-term stability of Social Security and Medicare are at present hot topics in American political life. Without them, a great many more Americans would die in poverty. What is the actual figure? The $5000 figure is accurate but irrelevant; that median includes people who are thirty years from retirement and people who are two days from retirement. The more relevant statistics are those restricted to people at or close to retirement age, and they can be found lower down in the article you cite, or in numerous other studies. Here's one from the GAO for example: http://www.gao.gov/products/GAO-15-419 The figures here are, unfortunately, no less terrifying: Now $104K is a lot better than $5K, but it's still not much to retire on. Why we believe that it is reasonable to throw out all the zeros before taking the median, I do not know. That seems like bad math to me. UPDATE: There is some discussion of this point in the comments; all I'm saying here is that this is a clumsy and possibly misleading way to characterize the situation. The linked report has the actual data, but let's try to summarize it here in a more meaningful way. Let's suppose that we make buckets for how dependent on SS is a retirement-age household to avoid starving to death, being homeless, and so on? Maybe these buckets are not ideal, and we could move them around a bit. The takeaways here are that the ratios of nothing:inadequate:barely adequate:comfortable is about 40:30:20:10. That only the top decile of retirement-age households can fund a comfortable retirement without help illustrates just how dependent on SS American households are. how do 50% of old Americans survive in their old age? Social Security and Medicare. As the cited GAO report indicates: \"\"Social Security provides most of the income for about half of households age 65 and older.\"\" Do most old Americans rely on their children for financial support? One day I met a woman at a party and we were making small talk about her kids. She had a couple already and one more was on the way. \"\"I want to have lots of children to support me in my old age\"\", she said. \"\"Do you support your parents?\"\" I asked, which frankly seemed like an entirely reasonable question. \"\"Of course not! I can't afford it. I've got a baby on the way and two more kids at home!\"\" I left her to draw her own conclusions as to the viability of her retirement plan.\"",
"title": ""
},
{
"docid": "b2a5e7a71d80f9d0b9240c7d31a1d114",
"text": "One more thing to consider is that $1M today is not the same as $1M 30 years from now because of inflation. Consider that just 30 years ago (1980) the average house price in the US was only about $69K and a new car cost around $7K on average. When you retire, it isn't much of a stretch to assume that you could be paying $1.5M for a typical house, $100K for mid-grade car, by the time you retire in 30 years. Of course, over the rest of your working life your salary will likely increase due to inflation too, so that will help. In 1980 the average US income was around $19K/year. So even though that number seems huge, it is because it is denominated in currency that has been devalued significantly.",
"title": ""
},
{
"docid": "e923a31cded2ec81bd594a5894386191",
"text": "The best way to get cash from retirement is to not do it. Leave the retirement savings alone. Start saving for house down payment. Look for ways to squirrel away money for that down payment. Consider payment plus insurance, taxes, and maintenance costs. If all that comes in less than a rental, you're probably better off buying. Most likely it will not. Make sure that when you go to buy, you have 20% down, AND an emergency fund that will cover you for 3 months of expenses at the new, higher, rate. Hint, that'll probably be in excess of 10k based on a single person with a 1.5-2k a month mortgage, plus utilities and food. And as a home owner, you will have a lot of things for which that emergency fund will come in handy. It's a matter of when, not if. Consider, 5k for a new roof, 6k for a hvac system, 1.5k for exterior paint, 500 for the plumber, 750 for pest control, 250 to have the tree removed that fell in a storm. 1000 for a new fridge. 500 for a new water heater. 1200 for washer and dryer. ALL of these are periodic costs, and they all able to fail before they're supposed to.",
"title": ""
},
{
"docid": "077fddb4e4e0666c457f5f65bdaf1150",
"text": "It depends on how much you save, how much your savings earns each year. You can model it with a very simple spreadsheet: Formula view: You can change this simple model with any other assumptions you wish to make and model. This spreadsheet presumes that you only make $50,000/year, never get a raise, that your savings earns 6% per year and that the market never has a crash like 2008. The article never states the assumptions that the author has made, and therefore we can't honestly determine how truthful the author is. I recommend the book Engineering Your Retirement as it has more detailed models and goes into more details about what you should expect. I wrote a slightly more detailed post that showed a spreadsheet that is basically what I use at home to track my retirement savings.",
"title": ""
},
{
"docid": "ba829169ea7a9f59eff7d4d7423f2150",
"text": "\"I don't know about the technicalities of retirement accounts, but I would advise you to please please please do not use retirement money to buy a home. The reason for not ever wanting to spend your retirement is.. when can you make it up? When you retire, you are by definition no longer earning money, so all your expenses can only come from the money you have saved. If you are willing to borrow from your retirement, it is not hard to imagine you are willing are willing to get a new car, or a new barbecue, or a new fishing boat before you repay yourself. So the question to ask yourself is, \"\"can I deal with renting for a few years knowing that I can retire comfortably, or am I willing to risk retirement to have a house now.\"\" Part of the will power it takes to pay yourself first is not taking from your own savings. You cannot count on anybody but yourself to take care of you when you are old. It is just opinion, but risking a comfortable retirement for a home now is not a risk anybody should take.\"",
"title": ""
},
{
"docid": "1153b504f9692320397ae8e1bfa47417",
"text": "How can people afford 10% mortgage? Part of the history of housing prices was the non-bubble component of the bubble. To be clear, there was a housing bubble and crash. Let me offer some simple math to illustrate my point - This is what happened on the way down. A middle class earner, $60K/yr couple, using 25% of their income, the normal percent for a qualified mortgage, was able to afford $142K for the mortgage payment. At 10% fixed rate. This meant that after down payment, they were buying a house at $175K or so, which was above median home pricing. Years later, obviously, this wasn't a step function, with a rate of 4%, and ignoring any potential rise of income, as in real term, income was pretty stagnant, the same $1250/mo could pay for a $260K mortgage. If you want to say that taxes and insurance would push that down a bit, sure, drop the loan to $240K, and the house price is $300K. My thesis ('my belief' or 'proposal', I haven't written a scholarly paper, yet) is that the relationship between median home price and median income is easily calculated based on current 30 year fixed rate loans. For all the talk of housing prices, this is the long term number. Housing cannot exceed income inflation long term as it would creep up as a percent of income and slow demand. I'm not talking McMansion here, only the median. By definition, the median house targets the median earners, the middle class. The price increase I illustrate was just over 70%. See the famous Shiller chart - The index move from 110 to 199 is an 81% rise. I maintain, 70 of that 81 can be accounted for by my math. Late 80's, 1987 to be exact, my wife got a mortgage for 9%, and we thought that was ok, as I had paid over 13% just 3 years earlier.",
"title": ""
},
{
"docid": "bb90855308bded6bdcea451a5624a0fe",
"text": "\"There are a number of reasons I'm in agreement with \"\"A house that is worth $300,000, or $50,000 of equity in a house and $225,000 in the bank.\"\" So, the update to the first comment should be \"\"A paid off house worth $300K, or a house with $150K equity and $275K in the retirement account.\"\" Edit - On reflection, an interesting question, but I wonder how many actually have this choice. When a family budgets for housing, and uses a 25% target, this number isn't much different for rent vs for the mortgage cost. So how, exactly do the numbers work out for a couple trying to save the next 80% of the home cost? A normal qualifying ration allows a house that costs about 3X one's income. A pay-in-full couple might agree to be conservative and drop to 2X. Are they on an austerity plan, saving 20% of their income in addition to paying the rent? Since the money must be invested conservatively, is it keeping up with house prices? After 10 years, inflation would be pushing the house cost up 30% or so, so is this a 12-15 year plan? I'm happy to ignore the tax considerations. But I question the math of the whole process. It would seem there's a point where the mortgage (plus expenses) add up to less than the rent. And I'd suggest that's the point to buy the house.\"",
"title": ""
}
] |
fiqa
|
5f9416049c8b375d68c88cd3b74423a0
|
Should I overpay to end a fixed-rate mortgage early? [duplicate]
|
[
{
"docid": "8c97110c32f226e776d5bfe11a4844d3",
"text": "I would strongly encourage you to either find specifically where in your written contract the handling of early/over payments are defined and post it for us to help you, or that you go and visit a licensed real estate attorney. Even at a ridiculously high price of 850 pounds per hour for a top UK law firm (and I suspect you can find a competent lawyer for 10-20% of that amount), it would cost you less than a year of prepayment penalty to get professional advice on what to do with your mortgage. A certified public accountant (CPA) might be able to advise you, as well, if that's any easier for you to find. I have the sneaking suspicion that the company representatives are not being entirely forthcoming with you, thus the need for outside advice. Generally speaking, loans are given an interest rate per period (such as yearly APR), and you pay a percentage (the interest) of the total amount of money you owe (the principle). So if you owe 100,000 at 5% APR, you accrue 5,000 in interest that year. If you pay only the interest each year, you'll pay 50,000 in interest over 10 years - but if you pay everything off in year 8, at a minimum you'd have paid 10,000 less in interest (assuming no prepayment penalties, which you have some of those). So paying off early does not change your APR or your principle amount paid, but it should drastically reduce the interest you pay. Amortization schedules don't change that - they just keep the payments even over the scheduled full life of the loan. Even with prepayment penalties, these are customarily billed at less than 6 months of interest (at the rate you would have payed if you kept the loan), so if you are supposedly on the hook for more than that again I highly suspect something fishy is going on - in which case you'd probably want legal representation to help you put a stop to it. In short, something is definitely and most certainly wrong if paying off a loan years in advance - even after taking into account pre-payment penalties - costs you the same or more than paying the loan off over the full term, on schedule. This is highly abnormal, and frankly even in the US I'd consider it scandalous if it were the case. So please, do look deeper into this - something isn't right!",
"title": ""
},
{
"docid": "4634cd7d88c054161302a975e8f7587c",
"text": "\"The simplest argument for overpayment is this: Let's suppose your fixed rate mortgage has an interest rate of 4.00%. Every £1 you can afford to overpay gives you a guaranteed effective return of 4.00% gross. Yes your monthly mortgage payment will stay the same; however, the proportion of it that's paying off interest every month will be less, and the amount that's actually going into acquiring the bricks and mortar of your home will be greater. So in a sense your returns are \"\"inverted\"\" i.e. because every £1 you overpay is £1 you don't need to keep paying 4% a year to continue borrowing. In your case this return will be locked away for a few more years, until you can remortgage the property. However, compared to some other things you could do with your excess £1s, this is a very generous and safe return that is well above the average rate of UK inflation for the past ten years. Let's compare that to some other options for your extra £1s: Cash savings: The most competitive rate I can currently find for instant access is 1.63% from ICICI. If you are prepared to lock your money away until March 2020, Melton Mowbray Building Society has a fixed rate bond that will pay you 2.60% gross. On these accounts you pay income tax at your marginal rate on any interest received. For a basic rate taxpayer that's 20%. If you're a higher rate taxpayer that means 40% of this interest is deducted as tax. In other words: assuming you pay income tax at one of these rates, to get an effective return of 4.00% on cash savings you'd have to find an account paying: Cash ISAs: these accounts are tax sheltered, so the income tax equation isn't an issue. However, the best rate I can find on a 4 year fixed rate cash ISA is 2.35% from Leeds Building Society. As you can see, it's a long way below the returns you can get from overpaying. To find returns such as that you would have to take a lot more risk with your money – for example: Stock market investments: For example, an index fund tracking the FTSE 100 (UK-listed blue chip companies) could have given you a total return of 3.62% over the last 3 years (past performance does not equal future returns). Over a longer time period this return should be better – historical performance suggests somewhere between 5 to 6% is the norm. But take a closer look and you'll see that over the last six months of 2015 this fund had a negative return of 6.11%, i.e. for a time you'd have been losing money. How would you feel about that kind of volatility? In conclusion: I understand your frustration at having locked in to a long term fixed rate (effectively insuring against rates going up), then seeing rates stay low for longer than most commentators thought. However, overpaying your mortgage is one way you can turn this situation into a pretty good deal for yourself – a 4% guaranteed return is one that most cash savers would envy. In response to comments, I've uploaded a spreadsheet that I hope will make the numbers clearer. I've used an example of owing £100k over 25 years at an unvarying 4% interest, and shown the scenarios with and without making a £100/month voluntary overpayment, assuming your lender allows this. Here's the sheet: https://www.scribd.com/doc/294640994/Mortgage-Amortization-Sheet-Mortgage-Overpayment-Comparison After one year you have made £1,200 in overpayments. You now owe £1,222.25 less than if you hadn't overpaid. After five years you owe £6,629 less on your mortgage, having overpaid in £6,000 so far. Should you remortgage at this point that £629 is your return so far, and you also have £6k more equity in the property. If you keep going: After 65 months you are paying more capital than interest out of your monthly payment. This takes until 93 months without overpayments. In total, if you keep up £100/month overpayment, you pay £15,533 less interest overall, and end your mortgage six years early. You can play with the spreadsheet inputs to see the effect of different overpayment amounts. Hope this helps.\"",
"title": ""
}
] |
[
{
"docid": "ade1a70a1ee0761e9bad174726ff779e",
"text": "\"I've heard that the bank may agree to a \"\"one time adjustment\"\" to lower the payments on Mortgage #2 because of paying a very large payment. Is this something that really happens? It's to the banks advantage to reduce the payments in that situation. If they were willing to loan you money previously, they should still be willing. If they keep the payments the same, then you'll pay off the loan faster. Just playing with a spreadsheet, paying off a third of the mortgage amount would eliminate the back half of the payments or reduces payments by around two fifths (leaving off any escrow or insurance). If you can afford the payments, I'd lean towards leaving them at the current level and paying off the loan early. But you know your circumstances better than we do. If you are underfunded elsewhere, shore things up. Fully fund your 401k and IRA. Fill out your emergency fund. Buy that new appliance that you don't quite need yet but will soon. If you are paying PMI, you should reduce the principal down to the point where you no longer have to do so. That's usually more than 20% equity (or less than an 80% loan). There is an argument for investing the remainder in securities (stocks and bonds). If you itemize, you can deduct the interest on your mortgage. And then you can deduct other things, like local and state taxes. If you're getting a higher return from securities than you'd pay on the mortgage, it can be a good investment. Five or ten years from now, when your interest drops closer to the itemization threshold, you can cash out and pay off more of the mortgage than you could now. The problem is that this might not be the best time for that. The Buffett Indicator is currently higher than it was before the 2007-9 market crash. That suggests that stocks aren't the best place for a medium term investment right now. I'd pay down the mortgage. You know the return on that. No matter what happens with the market, it will save you on interest. I'd keep the payments where they are now unless they are straining your budget unduly. Pay off your thirty year mortgage in fifteen years.\"",
"title": ""
},
{
"docid": "4ff9a2c9f2705c9fce04ad454be5d44d",
"text": "I wouldn't pay down your mortgage faster until you have a huge emergency fund. Like two years' worth of expenses. Once you put extra money toward principal you can't get it out unless you get a HELOC, which costs money. You're in a position now to build that up in a hurry. I suggest you do so. Your mortgage is excellent. In the land of inflation it gets easier and easier to make that fixed-dollar payment: depreciating dollars. You seem like a go-getter. Once you have your huge emergency fund, why not buy a few websites and monetize the heck out of them? Or look for an investment property from someone who needs to sell desperately? Get a cushion that you can do something with.",
"title": ""
},
{
"docid": "f3e741b5c1797f90f2eff5a53ade7927",
"text": "Consider not buying the house? Consider a cheaper property? What are your actual goals? Owning vs renting? Perhaps an actual investment goal? What is your rent now vs the mortgage on the house? What is the time frame for the mortgage you are considering? Those are the real questions you need to ask yourself. It does sound like you can become overleveraged with this property, although your down payment is quite substantial, but one single thing goes wrong and your cash flow is irreparably constricted. I personally wouldn't take that risk if I had the same forecast of expenditures, but this could be altered if there were particular investment goals I had in mind.",
"title": ""
},
{
"docid": "bbb5cf86b6ab4784bc588a20e2d96659",
"text": "Regardless of how long the mortgage has left, the return you get on prepayments is identical to the mortgage rate. (What happens on your tax return is a different matter.) It's easier to get a decent financial calculator (The TI BA-35 is my favorite) than to construct spreadsheets which may or may not contain equation errors. When I duplicate John's numbers, $100K mortgage, 4% rate, I get a 60 mo remaining balance of 90,447.51 and with $50 extra, $87132.56, a diff of $3314.95. $314.95 return on the $3000. $315 over 5yrs is $63/yr, over an average $1500 put in, 63/1500 = 4.2%. Of course the simple math of just averaging the payment creates that .2% error. A 60 payment $50 returning $314.95 produces 4.000%. @Peter K - with all due respect, there's nothing for me about time value of money calculations that can be counter-intuitive. While I like playing with spreadsheets, the first thing I do is run a few scenarios and double check using the calculator. Your updated sheet is now at 3.76%? A time vaule of money calculation should not have rounding errors that larger. It's larger than my back of envelope calculation. @Kaushik - if you don't need the money, and would buy a CD at the rate of your mortgage, then pay early. Nothing wrong with that.",
"title": ""
},
{
"docid": "b9eba242b203aa7e35353ed409783780",
"text": "I'd rent and put the $30K/ yr into savings. When the short sale comes off your credit, you'll have a substantial downpayment. You don't mention the balance, but the current rate you're paying is 3% too high. Even if you get the rate reduced, you have a $100K issue. I recommend reading through Will Short Sale Prevent Me From Getting VA Home Loan Later? A bit different question, but it talks more about the short sale. A comment for that question makes a key point - if you have a short sale, will the bank chase you for the balance? If not, you have a choice to make. Adding note after user11043 commented - First, run the numbers. If you were to pay the $100K off over 7 years, it's $1534/mo extra. Nearly $130K, and even then, you might not be at 80% LTV. I don't know what rents are like in your area, but do the math. First, if the rent is less than the current mortgage+property tax and maintenance, you will immediately have better cash flow each month, and over time, save towards the newer house. If you feel compelled to work this out and stay put, I'd go to the bank and tell them you'd like them to recast the loan to a new rate. They have more to lose than you do, and there's nothing wrong with a bit of a threat. You can walk away, or they can do what's reasonable, to just fix your rate. With a 4% rate, you'd easily attack the principal if you wish. As you commented above, if the bank offers no option, I'd seriously consider the short sale. There's nothing wrong with that option from a moral standpoint, in my opinion. This is not Bedford Falls, and you are not hurting your neighbors. The bank is amoral, if not immoral.",
"title": ""
},
{
"docid": "f9dce05a7255e9cf5cd86ec82fce3395",
"text": "This is more of an interesting question then it looks on first sight. In the USA there are some tax reliefs for mortgage payments, which we don’t have in the UK unless you are renting out the property with the mortgage. So firstly work out the interest rate on each loan taking into account any tax reliefs, etc. Then you need to consider the charges for paying off a loan, for example often there is a charge if you pay off a mortgage. These days in the UK, most mortgagees allow you to pay off at least 10% a year without hitting such a charge – but check your mortgage offer document. How interest is calculated when you make an early payment may be different between your loans – so check. Then you need to consider what will happen if you need another loan. Some mortgages allow you to take back any overpayments, most don’t. Re-mortgaging to increase the size of your mortgage often has high charges. Then there is the effect on your credit rating: paying more of a loan each month then you need to, often improves your credit rating. You also need to consider how interest rates may change, for example if you mortgage is a fixed rate but your car loan is not and you expect interest rates to rise, do the calculations based on what you expect interest rates to be over the length of the loans. However, normally it is best to pay off the loan with the highest interest rate first. Reasons for penalties for paying of some loans in the UK. In the UK some short term loans (normally under 3 years) add on all the interest at the start of the loan, so you don’t save any interest if you pay of the loan quicker. This is due to the banks having to cover their admin costs, and there being no admin charge to take out the loan. Fixed rate loans/mortgagees have penalties for overpayment, as otherwise when interest rates go down, people will change to other lenders, so making it a “one way bet” that the banks will always loose. (I believe in the USA, the central bank will under right such loans, so the banks don’t take the risk.)",
"title": ""
},
{
"docid": "8481a2039b2bc140fa374e80e6830c32",
"text": "If there's no prepayment penalty, and if the extra is applied to principal rather than just toward later payments, then paying extra saves you money. Paying more often, by itself, doesn't. Paying early within a single month (ie, paying off the loan at the same average rate) doesn't save enough you be worth considering",
"title": ""
},
{
"docid": "9a74ce917b8bba32d778ccb34fe977c9",
"text": "Depending on your bank you may receive an ACH discount for doing automatic withdrawals from a deposit account at that bank. Now, this depends on your bank and you need to do independent research on that topic. As far as dictating what your extra money goes towards each month (early payments, principal payments, interest payments) you need to discuss that with your bank. I'm sure it's not too difficult to find. In my experience most banks, so long as you didn't sign a contract on your mortgage where you're penalized for sending additional money, will apply extra money toward early payments, and not principal. I would suggest calling them. I know for my student loans I have to send a detailed list of my loans and in what order I want my extra payments toward each, otherwise it will be considered an early payment, or it will be spread evenly among them all.",
"title": ""
},
{
"docid": "6e0f5a5bd8fcf16434ed72e82e14daf0",
"text": "Consider that the bank of course makes money on the money in your escrow. It is nothing but a free loan you give the bank, and the official reasons why they want it are mostly BS - they want your free loan, nothing else. As a consequence, to let you out of it, they want the money they now cannot make on your money upfront, in form of a 'fee'. That explains the amount; it is right their expected loss by letting you out. Unfortunately, knowing this doesn't change your options. Either way, you will have to pay that money; either as a one-time fee, or as a continuing loss of interest. As others mentioned, you cannot calculate with 29 years, as chances are the mortgage will end earlier - by refinancing or sale. Then you are back to square one with another mandatory escrow; so paying the fee is probably not a good idea. If you are an interesting borrower for other banks, you might be able to refinance with no escrow; you can always try to negotiate this and make it a part of the contract. If they want your business, they might agree to that.",
"title": ""
},
{
"docid": "6c33bf1dbc4fda12b28dadf262162d4b",
"text": "\"Given that the 6 answers all advocate similar information, let me offer you the alternate scenario - You earn $60K and have an employer offering a 50% match on all deposits. All deposits. (Note, I recently read a Q&A here describing such an offer. If I see it again, I'll link). Let the thought of the above settle in. You think about the fact that $42K isn't a bad salary, and decide to deposit 30%, to gain the full match on your $18K deposit. Now, you budget to live your life, pay your bills, etc, but it's tight. When you accumulate $2000, and a strong want comes up (a toy, a trip, anything, no judgement) you have a tough decision. You think to yourself, \"\"after the match, I am literally saving 45% of my income. I'm on a pace to have the ability to retire in 20 years. Why do I need to save even more?\"\" Your budget has enough discretionary spending that if you have a $2000 'emergency', you charge it and pay it off over the next 6-8 months. Much larger, and you know that your super-funded 401(k) has the ability to tap a loan. Your choice to turn away from the common wisdom has the recommended $20K (about 6 months of your spending) sitting in your 401(k), pretax deposited as $26K, and matched to nearly $40K, growing long term. Note: This is a devil's advocate answer. Had I been the first to answer, it would reflect the above. In my own experience, when I got married, we built up the proper emergency fund. As interest rates fell, we looked at our mortgage balance, and agreed that paying down the loan would enable us to refinance and save enough in mortgage interest that the net effect was as if we were getting 8% on the money. At the same time as we got that new mortgage, the bank offered a HELOC, which I never needed to use. Did we somehow create high risk? Perhaps. Given that my wife and I were both still working, and had similar incomes, it seemed reasonable.\"",
"title": ""
},
{
"docid": "fc667cc46903d9bf2c8fd48ffd853d9e",
"text": "\"I'll start by focussing on the numbers. I highly recommend you get comfortable with spreadsheets to do these calculations on your own. I assume a $200K loan, the mortgage for a $250K house. Scale this up or down as appropriate. For the rate, I used the current US average for the 30 and 15 year fixed loans. You can see 2 things. First, even with that lower rate to go 15 years, the payment required is 51% higher than with the 30. I'll get back to that. Second, to pay the 30 at 15 years, you'd need an extra $73. Because now you are paying at a 15 year pace, but with a 30 year rate. This is $876/yr to keep that flexibility. These are the numbers. There are 2 camps in viewing the longer term debt. There are those who view debt as evil, the $900/mo payment would keep them up at night until it's gone, and they would prefer to have zero debt regardless of the lifestyle choices they'd need to make or the alternative uses of that money. To them, it's not your house as long as you have a mortgage. (But they're ok with the local tax assessor having a statutory lien and his hand out every quarter.) The flip side are those who will say this is the cheapest money you'll ever see, and you should have as large a mortgage as you can, for as long as you can. Treat the interest like rent, and invest your money. My own view is more in the middle. Look at your situation. I'd prioritize In my opinion, it makes little sense to focus on the mortgage unless and until the first 5 items above are in place. The extra $459 to go to 15? If it's not stealing from those other items or making your cash flow tight, go for it. Keep one subtle point in mind, risk is like matter and energy, it's not created or destroyed but just moved around. Those who offer the cliche \"\"debt creates risk\"\" are correct, but the risk is not yours, it's the lender's. Looking at your own finances, liquidity is important. You can take the 15 year mortgage, and 10 years in, lose your job. The bank still wants its payments every month. Even if you had no mortgage, the tax collector is still there. To keep your risk low, you want a safety net that will cover you between jobs, illness, new babies being born, etc. I've gone head to head with people insisting on prioritizing the mortgage payoff ahead of the matched 401(k) deposit. Funny, they'd prefer to owe $75K less, while that $75K could have been deposited pretax (so $100K, for those in the 25% bracket) and matched, to $200K. Don't make that mistake.\"",
"title": ""
},
{
"docid": "359f122d6d4d0d34ad6b2e80ef5a9e87",
"text": "First, check with your lender to see if the terms of the loan allow early payoff. If you are able to payoff early without penalty, with the numbers you are posting, I would hesitate to refinance. This is simply because if you actually do pay 5k/month on this loan you will have it paid off so quickly that refinancing will probably not save you much money. Back-of-the-napkin math at 5k/month has you paying 60k pounds a year, which will payoff in about 5 years. Even if you can afford 5k/month, I would recommend not paying extra on this debt ahead of other high-interest debt or saving in a tax-advantaged retirement account. If these other things are being taken care of, and you have liquid assets (cash) for emergencies, I would recommend paying off the mortgage without refinancing.",
"title": ""
},
{
"docid": "924774d4073dfdeaf3be9c130b7d6b1d",
"text": "Fixed-rate mortgage is supposed to give you security. You are not going to get the best possible rate, but it is safe and predictable. Your argument is the same as complaining that you are paying for home insurance and your home hasn't burnt down. Switching to a variable rate mortgage right now seems a bad idea, because there is some expectations that rates are going up. If you can overpay, that is probably what you should do unless you can invest with better return after tax than your mortgage interest. It doesn't just shorten the time of your mortgage; every time you overpay £500 your mortgage principal is down by £500, and you pay interest on £500 less. And if the interest rate goes up over the next five years as you seem to hope, that just means you will pay higher interest when your mortgage needs renewing. You can't hope to always make the optimal decision. You made a decision with very low risk. As with any decision, you don't know what's in the future; a decision that is low risk if the risk could lead to fatal results is not unwise. You could have picked a variable rate mortgage and could be paying twice as much interest today.",
"title": ""
},
{
"docid": "26f799670bf8a32dc2cc09fa3609cb0e",
"text": "My advice to you? Act like responsible adults and owe up to your financial commitments. When you bought your house and took out a loan from the bank, you made an agreement to pay it back. If you breach this agreement, you deserve to have your credit score trashed. What do you think will happen to the $100K+ if you decide to stiff the bank? The bank will make up for its loss by increasing the mortgage rates for others that are taking out loans, so responsible borrowers get to subsidize those that shirk their responsibilities. If you were in a true hardship situation, I would be inclined to take a different stance. But, as you've indicated, you are perfectly able to make the payments -- you just don't feel like it. Real estate fluctuates in value, just like any other asset. If a stock I bought drops in value, does the government come and bail me out? Of course not! What I find most problematic about your plan is that not only do you wish to breach your agreement, but you are also looking for ways to conceal your breach. Please think about this. Best of luck with your decision.",
"title": ""
},
{
"docid": "205ee66f682f0c4c21792a31c0241a1e",
"text": "Varying the amount to reflect income during the quarter is entirely legitimate -- consider someone like a salesman whose income is partly driven by commissions, and who therefore can't predict the total. The payments are quarterly precisely so you can base them on actual results. Having said that, I suspect that as long as you show Good Intent they won't quibble if your estimate is off by a few percent. And they'll never complain if you overpay. So it may not be worth the effort to change the payment amount for that last quarter unless the income is very different.",
"title": ""
}
] |
fiqa
|
26a6b8e26e7e6463147f6f6aecd11001
|
Using property to achieve financial independence
|
[
{
"docid": "89d4b3d5f9ba6b37bb8a4966cf06ef82",
"text": "I wrote this in another thread but is also applicable here. In general people make some key mistakes with property: Not factoring in depreciation properly. Houses are perpetually falling down, and if you are renting them perpetually being trashed by the tenants as well - particularly in bad areas. Accurate depreciation costs can often run in the 5-20% range per year depending on the property/area. Add insurance to this as well or be prepared to lose the whole thing in a disaster. Related to 1), they take the index price of house price rises as something they can achieve, when in reality a lot of the house price 'rise' is just everyone having to spend a lot of money keeping them standing up. No investor can actually track a house price graph due to 1) so be careful to make reasonable assumptions about actual achievable future growth (in your example, they could well be lagging inflation/barely growing if you are not pricing in upkeep and depreciation properly). Failure to price in the huge transaction costs (often 5%+ per sale) and capital gains/other taxes (depends on the exact tax structure where you are). These add up very fast if you are buying and selling at all frequently. Costs in either time or fees to real estate rental agents. Having to fill, check, evict, fix and maintain rental properties is a lot more work than most people realise, and you either have to pay this in your own time or someone else’s. Again, has to be factored in. Liquidity issues. Selling houses in down markets is very, very hard. They are not like stocks where they can be moved quickly. Houses can often sit on the market for years before sale if you are not prepared to take low prices. As the bank owns your house if you fail to pay the mortgage (rents collapse, loss of job etc) they can force you to fire sale it leaving you in a whole world of pain depending on the exact legal system (negative equity etc). These factors are generally correlated if you work in the same cities you are buying in so quite a lot of potential long tail risk if the regional economy collapses. Finally, if you’re young they can tie you to areas where your earnings potential is limited. Renting can be immensely beneficial early on in a career as it gives you huge freedom to up sticks and leave fast when new opportunities arise. Locking yourself into 20 yr+ contracts/landlord activities when young can be hugely inhibiting to your earnings potential. Without more details on the exact legal framework, area, house type etc it’s hard to give more specific advise, but in general you need a very large margin of safety with property due to all of the above, so if the numbers you’re running are coming out close (and they are here), it’s probably not worth it, and you’re better of sticking with more hands off investments like stocks and bonds.",
"title": ""
},
{
"docid": "cf50c055b7f7ddb663a5590ce31ba4b3",
"text": "Be very careful about buying property because it has been going up quickly in recent years. There are some fundamental factors that limit the amount real-estate can appreciate over time. In a nutshell, the general real-estate market growth is supported by the entry-level property market. That is, when values are appreciating, people can sell and use the capital gains to buy more valuable property. This drives up the prices in higher value properties whose owners can use that to purchase more expensive properties and so on and so forth. At some point in a rising market, the entry-level properties start to become hard for entry-level buyers to afford. The machine of rising prices throughout the market starts grinding to a halt. This price-level can be calculated by looking at average incomes in an area. At some percentage of income, people cannot buy into the market without crazy loans and if those become popular, watch out because things can get really ugly. If you want an example, just look back to the US in 2007-2009 and the nearly apocalyptic financial crisis that ensued. As with most investing, you want to buy low and sell high. Buying into a hot market is generally not very profitable. Buying when the market is abnormally low tends to be a more effective strategy.",
"title": ""
},
{
"docid": "20740f5842204ad615cd3309fc8cd602",
"text": "Will buying a flat which generates $250 rent per month be a good decision? Whether investing in real estate is a good decision or not depends on many things, including the current and future supply/demand for rental units in your particular area. There are many questions on this site about this topic, and another answer to this question which already addresses many risks associated with owning property (though there are also benefits to consider). I just want to focus on this point you raised: I personally think yes, because rent adjusts with inflation and the rise in the price of the property is another benefit. Could this help me become financially independent in the long run since inflation is getting adjusted in it? In my opinion, the fact that rental income general adjusts with 'inflation' is a hedge against some types of economic risk, not an absolute increase in value. First, consider buying a house to live in, instead of to rent: If you pay off your mortgage before your retire, then you have reduced your cost of accommodations to only utilities, property taxes, and repairs. This gives you a (relatively) known, fixed requirement of cash outflows. If the value of property goes up by the time you retire - it doesn't cost you anything extra, because you already own your house. If the value of property goes down by the time you retire, then you don't save anything, because you already own your house. If you instead rent your whole life, and save money each month (instead of paying off a mortgage), then when you retire, you will have a larger amount of savings which you can use to pay your monthly rental costs each month. By the time you retire, your cost of accommodations will be the market price for rent at that time. If the value of property goes up by the time you retire - you will have to pay more on rent. If the value of property goes down by the time you retire, you will save money on rent. You will have larger savings, but your cash outflow will be a little bit less certain, because you don't know what the market price for rent will be. You can see that, because you need to put a roof over your own head, just by existing you bear risk of the cost of property rising. So, buying your own home can be a hedge against that risk. This is called a 'natural hedge', where two competing risks can mitigate each-other just by existing. This doesn't mean buying a house is always the right thing to do, it is just one piece of the puzzle to comparing the two alternatives [see many other threads on buying vs renting on this site, or on google]. Now, consider buying a house to rent out to other people: In the extreme scenario, assume that you do everything you can to buy as much property as possible. Maybe by the time you retire, you own a small apartment building with 11 units, where you live in one of them (as an example), and you have no other savings. Before, owning your own home was, among other pros and cons, a natural hedge against the risk of your own personal cost of accommodations going up. But now, the risk of your many rental units is far greater than the risk of your own personal accommodations. That is, if rent goes up by $100 after you retire, your rental income goes up by $1,000, and your personal cost of accommodations only goes up by $100. If rent goes down by $50 after you retire, your rental income goes down by $500, and your personal cost of accommodations only goes down by $50. You can see that only investing in rental properties puts you at great risk of fluctuations in the rental market. This risk is larger than if you simply bought your own home, because at least in that case, you are guaranteeing your cost of accommodations, which you know you will need to pay one way or another. This is why most investment advice suggests that you diversify your investment portfolio. That means buying some stocks, some bonds, etc.. If you invest to heavily in a single thing, then you bear huge risks for that particular market. In the case of property, each investment is so large that you are often 'undiversified' if you invest heavily in it (you can't just buy a house $100 at a time, like you could a stock or bond). Of course, my above examples are very simplified. I am only trying to suggest the underlying principle, not the full complexities of the real estate market. Note also that there are many types of investments which typically adjust with inflation / cost of living; real estate is only one of them.",
"title": ""
}
] |
[
{
"docid": "08008113d32e1c92a5cd46c3c293e8de",
"text": "I hope things work out and odds are that they will, but there's always a risk profile with any investment particularly an illiquid one like property. Here you're taking the risk that the local market in your area doesn't tank or that if it does that you can liquidate your houses quickly and retain most of the capital. Some areas are more stable than others, but things can change in decades. My parents live in a decent part of CT. House prices were high in the early 2000s. Then one of the biotech firms around here pulled out. One firm was not so big a deal - 30000 jobs is quite a bit but the area didn't become rich off one company - but it turns out that was the start of an industry trend. 3 more go, and suddenly property values crashed. Luckily, we have a pretty small house for the area so most of the assets aren't tied up in it, but it's pretty alarming to see a formerly upper middle class neighborhood become filled with overgrown lawns and for sale signs that hang around long enough to gather moss. When my parents sell after they retire they might be taking a hit in nominal terms, never mind real terms factoring in inflation. This is about investment real estate though. I do think there is a more intangible emotional and stability gain you get from owning the land or property you live in.",
"title": ""
},
{
"docid": "94e274d66650337c888a371d404e2d7b",
"text": "People just love becoming more well-off than they currently are, and one of the ways they do it is with leverage. Leverage requires credit. That desire is not exclusive to people who are not already well-off. For a well-off person who wants to become more well-off by expanding their real estate ventures, paying cash for property is a terrible way to go about it. The same goes for other types of business or market investment. Credit benefits the well-off even more greatly than it benefits the poor or the middle-class.",
"title": ""
},
{
"docid": "80487a818ba0d9771ca050373e0de5f9",
"text": "It's generally a bad idea to use low-risk credit (low-risk in sense you're practically guaranteed to be forced to pay it off) to buy high-risk shares. In optimistic scenario, the profit from shares would be higher than your credit percentages. In less optimistic scenario you come with nothing. In worse scenario you have worthless shares and another credit to pay. If your only problem is the non-profitable property, you can always sell it and get rid of negative cash flow. It won't affect your quality of life negatively. In your high-risk scenario you trade the opportunity for a bit better life with for a risk of turning it into disaster for you and your family.",
"title": ""
},
{
"docid": "bd1c2de074d2347fc982182af0792e6e",
"text": "\"It depends what you mean. Finance Independence and Retirement Early (FI/RE) are two overlapping ideas. If you plan to retire early and spend the same amount of money every year (adjusted for inflation), then you need to save twenty-times your yearly spending to satisfy the 4% Safe Withdrawal rule of thumb. Carefully notice I say \"\"yearly spending\"\" and not income. I'm unaware how it is in Pakistan, but in America, people who retire in their sixties tend to reduce their spending by 30%. This is for a host of reasons like not eating out as much, not driving to work, paid off mortgages, and their children being adults now. In this type of profile, a person needs to save 17.5x yearly spending. This numbers presume a person will only use their built assets as an income source. Any programs like a government pension acting as a safety net. If you factor those in, the estimates above become smaller.\"",
"title": ""
},
{
"docid": "cdc8ee4b63ae9ac426fd4dad8942a239",
"text": "Huh, well it's working for me. I've got 3 properties and am a little over 25% of my goal to never work again. How would you suggest one get rich? I assume you have a better plan than he does?",
"title": ""
},
{
"docid": "72c6294a241bea25d2691f469ed674e1",
"text": "What you are describing is called a Home Equity Line of Credit (HELOC). While the strategy you are describing is not impossible it would raise the amount of debt in your name and reduce your borrowing potential. A recent HELOC used to finance the down payment on a second property risks sending a signal of bad financial position to credit analysts and may further reduce your chances to obtain the credit approval.",
"title": ""
},
{
"docid": "8779dfa9ca45986b4652213bcf57bf9f",
"text": "\"You're right to seek passive income and since you're already looking for it, you probably already know some of the reasons to why it is important. Do you live in the United States? If so I'd strongly recommend purchasing your primary residence and then maybe investment properties if you like owning your own home. The US tax and banking structure is set up to favor this move in more ways than I can count. So, SAVE, SAVE, SAVE then beg, borrow and steal to get the down payment, rent rooms to friends or random people to afford the payments, buy a fixer upper in an up and coming neighborhood. The US is rife with these in all price ranges. If you're working 56 hrs a week, you've got the work ethic. So if you can't afford it it's probably because you're spending all your money on other stuff. If you want to do this, it will take some effort, smarts, and savings. You will have to trim back the mochas, vacations, dinners out, etc, etc etc. Let your friends do that stuff and rent from you. Your life will get continually easier. If you have already trimmed back all the discretionary spending and still can't make it then you need to earn more money. Doing either and both of these things will absolutely change your whole economic life and future. So in summary I'd offer these Ranked Priorities: 1) Learn to Save (unless you always want to have to work for someone else) 2) Increase your income capability (since your most valuable asset is YOU) 3) Buy and hold real estate (because the game is rigged to favor passive income) I'm 38, never earned a six figure salary, made some good purchases when I was 25-30 and work is \"\"optional\"\" for me now.\"",
"title": ""
},
{
"docid": "0abf18cc25a8320ef87516be5b2300af",
"text": "I would not claim to be a personal expert in rental property. I do have friends and family and acquaintances who run rental units for additional income and/or make a full time living at the rental business. As JoeTaxpayer points out, rentals are a cash-eating business. You need to have enough liquid funds to endure uncertainty with maintenance and vacancy costs. Often a leveraged rental will show high ROI or CAGR, but that must be balanced by your overall risk and liquidity position. I have been told that a good rule-of-thumb is to buy in cash with a target ROI of 10%. Of course, YMMV and might not be realistic for your market. It may require you to do some serious bargain hunting, which seems reasonable based on the stagnant market you described. Some examples: The main point here is assessing the risk associated with financing real estate. The ROI (or CAGR) of a financed property looks great, but consider the Net Income. A few expensive maintenance events or vacancies will quickly get you to a negative cash flow. Multiply this by a few rentals and your risk exposure is multiplied too! Note that i did not factor in appreciation based on OP information. Cash Purchase with some very rough estimates based on OP example Net Income = (RENT - TAX - MAINT) = $17200 per year Finance Purchase rough estimate with 20% down Net Income = (RENT - MORT - TAX - MAINT) = $7500 per year",
"title": ""
},
{
"docid": "d006258069669f318941d0f314281530",
"text": "Your experience is anecdotal (outside Australia things are different). There are many companies and real estate investment trusts (REITs) that own residential properties (as well as commercial in many cases to have a balanced portfolio). They are probably more common in higher-density housing like condos, apartment buildings, flats, or whatever you like to call them, but they are certainly part of the market for single family units in the suburbs as well. What follows is all my own opinion. I have managed and rented a couple of properties that I had lived in but wasn't ready to sell yet when I moved out. In most cases, I wish I would have sold sooner, rather than renting them out. I think that there are easier/less risky ways to get a good return on your money. Sometimes the market isn't robust enough to quickly sell when it's time to move, and some people like the flexibility of having a property that a child could occupy instead of moving back in at home. I understand those points of view even if I disagree with them.",
"title": ""
},
{
"docid": "6717866315a55e750928ea6245ad3f8b",
"text": "I don't quite understand your thought process here. First, in a tax-advantaged retirement account you are NOT allowed to engage in a transaction with yourself. If you just want to run a business and be able to write off expenses, how is using the self-directed IRA relevant? You can either buy the condo using your tax-advantaged account and rent it out to regular tenants. Or you buy the condo yourself using your own money and then operate your business so you can deduct business expenses from doing so. 401k's allow you to take a loan out of it, so you can look into that as well.",
"title": ""
},
{
"docid": "6adfc37167cca13c23799cd8c226a6d5",
"text": "I would strongly, strongly advise against it. Others here are answering the question of, having decided to invest in property, how one ought to ensure that one invests in the right property. What has not really been discussed here is the issue of diversification. There are a number of serious risks to property investment. In fact, it is one of the riskiest types of investment. You face more of almost every type of risk in property than maybe any other asset class. It is one thing to take on those risks as part of a diverse portfolio including other asset classes. It is quite another - extremely irresponsible - thing to take on those risks as your sole investment, when your portfolio is in its infancy. So no, do not invest in property when you lack any other investments. Absolutely not.",
"title": ""
},
{
"docid": "0b946e8bec1ff86977fd5659852d9af4",
"text": "I assume having real estate in a good popular city is much more secure way of keeping money than having it in a bank account Not at all! Many things can go wrong with rental property. Renters can be late on rent, they can cause damage to property, you can have unexpected repairs. I'm not saying that you should just let it sit, but rental property is not risk-free my any means. Are you prepared to be a landlord as a part time job (for 500/mo?). Rental property is not passive income - it takes work to maintain. You can outsource this to a property manager, but that eats into the 500/mo that you are estimating). I want to stay flexible and have a possibility to change my location whenever I want. That's a perfectly reasonable reason not to buy a home, but what will you do with the rental when you move? It will still need maintenance, you'll still need to interact with renters, etc. I'm not saying you shouldn't do this, but I get the feeling that you are not fully aware of the risks involved in rental properties.",
"title": ""
},
{
"docid": "a363dc606b8f75dc5fba7f9e4c16aa95",
"text": "\"Leverage here is referring to \"\"financial leverage\"\". This is the practice of \"\"levering\"\" [ie increasing, like the use of a lever to increase the amount of weight you can lift] the value of your investment by taking on debt. For example: if you have 100k in cash, you can buy a 100k rental property. Assume the property makes 10k a year, net of expenses [10%]. Now assume the bank will also give you a 100k mortgage, at 3%. You could take the mortgage, plus your cash, and buy a 200k rental property. This would earn you 20k from the rental property, less 3k a year in interest costs [the 3%]. Your total income would be 17k, and since you only used 100k of your own money, your rate of return would now be 17% instead of 10%. This is financial leveraging. Note that this increases your risk, because if your investment fails not only have you lost your own money, you now need to pay back the bank. \"\"Beta riders\"\" appears to be negative commentary on investors who use Beta to calculate the value of a particular stock, without regard to other quantitative factors. Therefore \"\"leveraged beta riders\"\" are those who take on additional risk [by taking on debt to invest], and invest in a manner that the author would perhaps considered \"\"blindly\"\" following Beta. However, I have never seen this term before, and it appears tainted by the author's views on Quants. A \"\"quant process driven discipline\"\" appears to be positive commentary on investors who use detailed quantitative analysis to develop rules which they rigorously follow to invest. I have never seen this exact phrasing before, and like the above, it appears tainted by the author's views on Quants. I am not providing any opinion on whether \"\"beta riding\"\" or \"\"quant processes\"\" are good or bad things; this is just my attempt to interpret the quote as you presented it. Note that I did not go to the article to get context, so perhaps something else in the article could skew the language to mean something other than what I have presented.\"",
"title": ""
},
{
"docid": "5069019873055d17bce6fac7e64c7c24",
"text": "You could use the money to buy a couple of other (smaller) properties. Part of the rent of these properties would be used to cover the mortgage and the rest is income.",
"title": ""
},
{
"docid": "51196b357a69d61315d2cd411b36e763",
"text": "\"When you give a gift to another person or receive a gift from another person there is no impact on your taxes. You do not have to report certain amounts in your income, including the following: ... -most gifts and inheritances; http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/nttxd-eng.html If you give a gift to a charity or similar organization you can reduce your taxes. It is my recollection that when a family member gives a large amount of money to a child, tax on the income that money earns (typically interest) should be paid by the giver, not the child, but I can't find any publications to that effect on the CRA Site. There is a bit of language about \"\"Gifts\"\" from an employer that are really employment income: Gifts and other voluntary payments 1.3 The term gift is not defined in the Act. In common law jurisdictions, the courts have said that a bona fide gift exists when: •There is a voluntary transfer of property, •A donor freely disposes of his or her property to a donee, and •The donee confers no right, privilege, material benefit, or advantage on the donor or on a person designated by the donor. 1.4 Whether a transfer of property has been made voluntarily is a question of fact. In order for a transfer to be considered voluntary, there must be no obligation to make such a transfer. Amounts received as gifts, that is, voluntary transfers without consideration and which cannot be attributed to an income-earning source, are not subject to tax in the hands of the recipient. 1.5 However, sometimes individuals receive a voluntary payment or other valuable transfer or benefit by virtue of an office or employment from an employer, or from some other person. In such cases, the amount of the payment or the value of the transfer or benefit is generally included in employment income pursuant to subsection 5(1) or paragraph 6(1)(a). (See also Guide T4130, Employers’ Guide - Taxable Benefits and Allowances.) Similarly, voluntary payments (or other transfers or benefits) received by virtue of a profession or in the course of carrying on a business are taxable receipts. http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s3/f9/s3-f9-c1-eng.html#N10244 If the people in question are adults who are not related to each other and don't have a business or employment relationship, then you should find that regardless of the amount of the gift, neither giver nor recipient will have a tax consequence.\"",
"title": ""
}
] |
fiqa
|
e76e04eb093d2a53b16bcea38c4569bf
|
Incorporating real-world parameters into simulated(paper) trading
|
[
{
"docid": "db0a588f856ca1d877f71a9c17a63ae2",
"text": "\"I think you're on the wrong track. Getting more and more samples from the real world does not make your backtest more accurate, it just confirms that your strategy can withstand one particular sample path of a stochastic process. The reason why you find it simple to incorporate fees, commissions, taxes, etc. is because they're a static and constant process -- well they might change over time but most definitely uncorrelated to the markets. Modelling overnight returns or the top levels of the order book the next day is serious work. First you have to select a suitable model (that's mostly theoretical work but experience can help a lot). Then, in order to do it data-driven, you'd have to plough through thousands of days of sample data on a set of thousands of instruments to get a \"\"feeling\"\" (aka significant model parameters). Apropos data mining, I think Excel might be the wrong tool for the job. Level-2 data (even just the first 10 levels) is a massive blob. For example, the NYSE OpenBook historical data weighs in at a massive 15 TB compressed (uncompressed 74 TB) for the last 10 years, and costs USD 200k. Anyway, as for other factors to take into account: So how to account for all this in a backtest? Personally, I would put in some penalty terms (as % on a return basis) for every factor you want to consider, don't hardcode them. You can then run a stress test by exploring these parameters (i.e. assign some values in the range of 0 to whatever fits). Explore them individually (only set one penalty term at a time) to get a feeling how the strategy might react to stress from that factor. Then you can run the backtest with typical (or observed) combinations of penalty factors and slowly stress them altogether. Edit Just to avoid confusion about terminology. A backtest in the strict sense (had I implemented this strategy X years ago, what would have happened?) won't benefit from any modelling simply because the real-world \"\"does the sampling\"\" for us. However, to evaluate a strategy's robustness you should account for the additional factors and run some stress tests. If the strategy performs well in the real-world or no-stress scenario but produces losses once a tiny slippage occurs every now and again, you could conclude that the strategy is very fragile. The key is to explore the maximum stress the strategy can handle (by whatever measure); if a lot you can call the strategy robust. The latter is what I personally call a backtest; the first procedure would go by the name \"\"extension towards the past\"\" or so. Some lightweight literature:\"",
"title": ""
},
{
"docid": "6346bf2359cb8a27f603da4b4436f171",
"text": "You said the decision will be made by EOD. If you've made the decision prior to the market close, I'd execute on the closing price. If you are trading stocks with any decent volume, I'd not worry about the liquidity. If your strategy's profits are so small that your gains are significantly impacted by say, the bid/ask spread (a penny or less for liquid stocks) I'd rethink the approach. You'll find the difference between the market open and prior night close is far greater than the normal bid/ask.",
"title": ""
}
] |
[
{
"docid": "6cc39d91d4ee180fe587330a6019f814",
"text": "You can try paper trading to sharpen your investing skills(identifying stocks to invest, how much money to allocate and stuff) but nothing compares to getting beaten black and blue in the real world. When virtual money is involved you mayn't care, because you don't loose anything, but when your hard earned money disappears or grows, no paper trading can incite those feelings in you. So there is no guarantee that doing paper trading will make you a better investor, but can help you a lot in terms of learning. Secondly educate yourself on the ways of investing. It is hard work and realize that there is no substitute for hard work. India is a growing economy and your friends maybe safe in the short term but take it from any INVESTOR, not in the long run. And moreover as all economies are recovering from the recession there are ample opportunities to invest money in India both good and bad. Calculate your returns and compare it with your friends maybe a year or two down the lane to compare the returns generated from both sides. Maybe they would come trumps but remember selecting a good investment from a bad investment will surely pay out in the long run. Not sure what you do not understand what Buffet says. It cannot get more simpler than that. If you can drill those rules into your blood, you mayn't become a billionaire but surely you will make a killing, but in the long run. Read and read as much as you can. Buy books, browse the net. This might help. One more guy like you.",
"title": ""
},
{
"docid": "e9948929aaf617dfbf4968b14dc626dc",
"text": "The papers you would need to buy are called 'futures', and they give you the right to buy (or sell) a certain amount of oil at a certain location (some large harbor typically), for a certain price, on a certain day. You can typically sell these futures anytime (if you find someone that buys them), and depending on the direction you bought, you will make or lose money according to oil rice changes - if you have the future to get oil for 50 $, and the market price is 60, this paper is obviously worth 10 $. Note that you will have to sell the future at some day before it runs out, or you get real oil in some harbor somewhere for it, which might not be very useful to you. As most traders don't want really any oil, that might happen automatically or by default, but you need to make sure of that. Note also that worst case you could lose a lot more money than you put in - if you buy a future to deliver oil for 50 $, and the oil price runs, you will have to procure the oil for new price, meaning pay the current price for it. There is no theoretical limit, so depending on what you trade, you could lose ten times or a thousand times what you invested. [I worded that without technical lingo so it is clear for beginners - this is the concept, not the full technical explanation]",
"title": ""
},
{
"docid": "91c79dcdf2c298131d02119744c2cdb1",
"text": "While trading in stochastic I've understood, one needs reference (SMA/EMA/Bolinger Band and even RSI) to verify trade prior entering it. Stochastic is nothing to do with price or volume it is about speed. Adjusting K% has ability to turn you from Day trader to -> swing trader to -> long term investor. So you adjust your k% according to chart time-frame. Stochastic setup for 1 min, 5 min ,15, 30, 60 min, daily, weekly, monthly, quarterly, half yearly and yearly are all different. If you try hopping from one time-frame to another just because it is below oversold or above overbought region with same K%, you may get confused. Worst you may not square-off your loss making trade. And rather not use excel; charts gives better visual for oscillators.",
"title": ""
},
{
"docid": "224aff422d16df2e577db7132e434f85",
"text": "\"You're mostly correct, although I think you're missing something essential about no-arbitrage versus an arbitrage argument. Black-Scholes makes an arbitrage argument, which is that the value of an option should be the same as any portfolio that has identical cash flows, and this is generally a sound argument. Notice, however, that BS is ultimately an equilibrium model: it tells you the \"\"correct\"\" price of an option if the assumptions of BS hold, and doesn't necessarily match observed market prices. A no-arbitrage condition or model deliberately incorporates observed prices (or yields, or whatever) into the model, so that there cannot be an arbitrage opportunity implied by the model. This comes up a lot in term structure of interest rate problems, where equilibrium models like Vasicek or Cox-Ingersoll-Ross won't perfectly reproduce the current, observed term structure, and so imply an arbitrage opportunity. No-arbitrage models like Hull-White specifically match the model's term structure to observed yields/prices, so that there is no arbitrage opportunity between the observed term structure and your model of it. It's important to note that this will still allow for arbitrage involving bonds that are *not* part of the observed term structure. As for equivalent martingale measures, you might think about it more generally. The process involves changing the probability distribution from the actual (which is hard to use for pricing) to a different one that's easier to use but will result in the same prices; this is nearly always a risk-neutral probability. You can think of equivalent martingale pricing as asking, \"\"how would this security behave, and be priced, in a world that is completely risk neutral\"\", and then making an argument that the prices are in fact equivalent. EDIT: grammar\"",
"title": ""
},
{
"docid": "cc25350853bd49c0776a03e2ab19e8c9",
"text": "Machine learning is definitely applied to trading, but I have not tried it myself. For now I've been focused on figuring out the platforms and how they work; I have not been trying out other strategies besides a SMAC strategy. The most machine learning-like application I've attempted was cross-validation by walk-forward analysis (I'm publishing that post on Monday). I know nothing about TensorFlow other than it's used for deep learning and that it doesn't work on Windows and thus would not work on my more powerful gaming computer, and like I said above, I have not been exploring machine learning right now. Neural networks are on my radar, on the list of things I need to read, but there was a topic on r/algotrading recently where most users said that deep learning has not demonstrated better performance than more traditional ML techniques and looks like a fad. I want to convince myself of that first, though. I'm glad you enjoyed the post and my site! Thank you!",
"title": ""
},
{
"docid": "49c7ca8ddf2d9862e4ba39a7514faf02",
"text": "This paper makes the rounds every so often and I HATE IT VERY MUCH. No one has EVER EVER EVER estimated standard deviation by taking an average of abs deviations, because that would be stupid, further, realized vol is a very different beast than implied vol. AND FURTHER, the models are fitted to the data, rather than fighting the tape and fitting the data to the models. Most people working with these instruments are trying to figure out the prices of unknown derivatives based on known derivatives - the models just help interpret findings and estimate what's necessary to hedge a position.",
"title": ""
},
{
"docid": "78ae8d2e3a6fd1e9b448c0e6d931e615",
"text": "thanks for the advice, I still have few weeks before my master course starts and would like to do more reading regarding trading, any books that you would recommend ? Also I always assume that modelling skill is not that important in sales and trading, is my assumption correct ? Modelling is probably one of my weak skills but if it is needed I would like to work further on it thank you",
"title": ""
},
{
"docid": "8b9343c6b6243a75529b6cc30d3c93f1",
"text": "\"That's the way the markets work in THEORY. In actual fact, markets are subject to \"\"real world\"\" pressures. That is, there are so many things going on in the market that the end of the \"\"Lined In\"\" lock up is just one of many. To produce the result you describe, traders would have to hold cash in reserve for this so-called \"\"contingency\"\" to buy at the end of the lock-up. In most cases, they wouldn't want to because of everything else that is going on. To use a real world analogy, would you want to wait until the last possible moment before going to the bathroom? Or would you go now while you had the chance? That's what the decision about \"\"holding cash in reserve for a contingency\"\" is like.\"",
"title": ""
},
{
"docid": "081512f0aaafbef6ec324b5e271c4821",
"text": "\"Check out Professor Damodaran's website: http://pages.stern.nyu.edu/~adamodar/ . Tons of good stuff there to get you started. If you want more depth, he's written what is widely considered the bible on the subject of valuation: \"\"Investment Valuation\"\". DCF is very well suited to stock analysis. One doesn't need to know, or forecast the future stock price to use it. In fact, it's the opposite. Business fundamentals are forecasted to estimate the sum total of future cash flows from the company, discounted back to the present. Divide that by shares outstanding, and you have the value of the stock. The key is to remember that DCF calculations are very sensitive to inputs. Be conservative in your estimates of future revenue growth, earnings margins, and capital investment. I usually develop three forecasts: pessimistic, neutral, optimistic. This delivers a range of value instead of a false-precision single number. This may seem odd: I find the DCF invaluable, but for the process, not so much the result. The input sensitivity requires careful work, and while a range of value is useful, the real benefit comes from being required to answer the questions to build the forecast. It provides a framework to analyze a business. You're just trying to properly fill in the boxes, estimate the unguessable. To do so, you pore through the financials. Skimming, reading with a purpose. In the end you come away with a fairly deep understanding of the business, how they make money, why they'll continue to make money, etc.\"",
"title": ""
},
{
"docid": "cc774863ed13c1d2f406183d15b26019",
"text": "Quick and dirty paper but pretty interesting.. I'm not in Portfolio Management but I probably would have ended up at the modal number as well. I don't know the subject deeply enough to answer my own question, but is the bias always toward underestimation of variance? Or is that a complex of the way the problem was set up? Another question I have for those in investment management; Would this impact asset allocation?",
"title": ""
},
{
"docid": "c49acb0fec8e63a0b3a15cbc4e4d64cd",
"text": "In a simple world yes, but not in the real world. Option pricing isn't that simplistic in real life. Generally option pricing uses a Monte Carlo simulation of the Black Scholes formula/binomial and then plot them nomally to decide the optimum price of the option. Primarily multiple scenarios are generated and under that specific scenario the option is priced and then a price is derived for the option in real life, using the prices which were predicted in the scenarios. So you don't generate a single price for an option, because you have to look into the future to see how the price of the option would behave, under the real elements of the market. So what you price is an assumption that this is the most likely value under my scenarios, which I predicted into the future. Because of the market, if you price an option higher/lower than another competitor you introduce an option for arbitrage by others. So you try to be as close to the real value of the option, which your competitor also does. The more closer your option value is to the real price the better it is for all. Did you try the book from Hull ? EDIT: While pricing you generally take variables which would affect the price of your option. The more variables you take(more nearer you are to the real situation) the more realistic your price will be and you would converge on the real price faster. So simple formula is an option, but the deviations maybe large from the real value. And you would end up loosing money, most of the time. So the complicated formula is there for getting a more accurate price, not to confuse people. You can use your formula, but there will be odds stacked against you to loose money, from the onset, because you didn't consider the variables which might/would affect the price of your option.",
"title": ""
},
{
"docid": "f98342a46aadd4f3c7192e8b9415206c",
"text": "For starters, that site shows the first 5 levels on each side of the book, which is actually quite a bit of information. When traders say the top of the book, they mean just the first level. So you're already getting 8 extra levels. If you want all the details, you must subscribe to the exchange's data feeds (this costs thousands of dollars per month) or open an account with a broker who offers that information. More important than depth, however, is update frequency. The BATS site appears to update every 5 seconds, which is nowhere near frequently enough to see what's truly going on in the book. Depending on your use case, 2 levels on each side of the book updated every millisecond might be far more valuable than 20 levels on each side updated every second.",
"title": ""
},
{
"docid": "d82fb34dc2e7a18aa51ebcdac70db38a",
"text": "\"The previous answers make valid points regarding the risks, and why you can't reasonably compare trading for profit/loss to a roll of the die. This answer looks at the math instead. Your assumption: I have an equal probability to make a profit or a loss. Is incorrect, for the reasons stated in other answers. However, the answer to your question: Can I also assume that probabilistically speaking, a trader cannot do worst than random? Is \"\"yes\"\". But only because the question is flawed. Consequently it's throwing people in all directions with their answers. But quite simply, in a truly random environment the worst case scenario, no matter how improbable, is that you lose over and over again until you have nothing left. This can happen in sequential rolls of the dice AND in trading securities/bonds/whatever. You could guess wrong for every roll of the die AND all of your stock picks could become worthless. Both outcomes result in $0 (assuming you do not gamble with credit). Tell me, which $0 is \"\"worse\"\"? Given the infinite number of plays that \"\"random\"\" implies, the chance of losing your entire bankroll exists in both scenarios, and that is enough by itself to make neither option \"\"worse\"\" than the other. Of course, the opposite is also true. You could only pick winners, with an unlimited upside potential, but again that could happen with either dice rolls or stock picks. It's just highly improbable. my chances cannot be worse than random and if my trading system has an edge that is greater than the percentage of the transaction that is transaction cost, then I am probabilistically likely to make a profit? Nope. This is where it all falls apart. Just because your chances of losing it all are similarly improbable, does not make you more likely to win with one method or the other. Regression to the mean, when given infinite, truly random outcomes, makes it impossible to \"\"have an edge\"\". Also, \"\"probabilistically\"\" isn't a word, but \"\"probably\"\" is.\"",
"title": ""
},
{
"docid": "6c9b37a52b25b4a8608c663fe306e759",
"text": "Well said. To put it shortly I think both can be a viable source of some side income when proper risk management is in place. It is likely not going to work when you are trading/betting with money that is important to you. Paper trade/bet until you find a viable strategy. Then use proper bankroll management and some expendable income to pick up some extra bucks on the side. Sports betting is nice because the initial investment is much lower than day trading.",
"title": ""
},
{
"docid": "90d776b2562c195fa479c4c3ae7c696c",
"text": "\"You make several good points. I'll start with Black-Scholes; the arbitrage argument in Black-Scholes is between the option and a hypothetical and unobserved portfolio with identical cash flows (the replicating portfolio). We then value the replicating portfolio via an equilibrium model. When you use BS, there isn't necessarily *any* observed security whose is guaranteed not imply some arbitrage opportunity, because BS makes no reference to observed prices. A no-arbitrage modification might look like this: \"\"I observe the prices (and implied volatilities) of some options, and use the implied volatilities to price another option (maybe with a different strike). Doing so ensures that there is no arbitrage between my price and the market prices implied by my model.\"\" Realistically, the problem arbitrage-free models are addressing is that our models and assumptions are wrong, even though they're reasonable approximations a lot of the time. A no-arbitrage model removes some set of obvious deficiencies, but at the cost of not being able to explain why things are priced as they are. So, for instance, Vasicek won't reproduce the observed term structure, and Hull-White fixes this, but Hull-White doesn't explain where the term structure comes from (i.e., what the term structure *should* be).\"",
"title": ""
}
] |
fiqa
|
1e45f32f3d249c84b03c617e315d05d8
|
Pensions, annuities, and “retirement”
|
[
{
"docid": "3ebf82a0147a97fb5f9595067a948193",
"text": "\"There are broadly two kinds of pension: final salary / defined benefit, and money purchase. The text you quote above, where it talks about \"\"pension\"\" it is referring to a final salary / defined benefit scheme. In this type of scheme you earn a salary of £X during your working life, and you are then entitled to a proportion of £X (the proportion depends on how long you worked there) as a pension. These types of scheme are relatively rare now (outside the public sector) because the employer is liable for making enough investments into a pot to have enough money to pay everyone's pension entitlements, and when the investments do poorly the liability for the shortfall ends up on the employer's plate. You might have heard about the \"\"black hole in public sector pensions\"\" which is what this refers to - the investments that the government have made to pay public sector workers' pensions has not in fact been sufficient. The other type of scheme is a money purchase scheme. In this scheme, you and/or your employer make payments into an investment pot which is locked away until you retire. Once you retire, that pot is yours but there are restrictions on what you can do with it - you can use it to purchase an annuity (I will give you my £X,000 pension pot in return for you giving me an annual income of £Y, say) and you can take some of it as a lump sum. The onus is on you to make sure that you (and/or your employer) have contributed enough to make a large enough pot to give you the income you want to live on, and to make a sensible decision about what to do with the pot when you retire and what to use it as income. With either type of scheme, you can claim this pension after you reach retirement age, whether or not you are still working. In some schemes you are also permitted to claim the pension earlier than retirement age if you have stopped working - it will depend on the rules of the scheme. What counts as \"\"retirement age\"\" depends on how old you are now (and whether you are male or female) as the government has been pushing this age out as people have been living longer. In addition to both schemes, there is also a \"\"state pension\"\" which is a fixed, non-means-tested, weekly amount paid from government funds. Again you are entitled to receive this after you pass retirement age, whether or not you are still working.\"",
"title": ""
},
{
"docid": "9170569a02966ba5ad568f1aff9d076f",
"text": "Pension in this instance seems to mean pension income (as opposed to pension pot). This money would be determined by whatever assets are being invested in. It may be fixed, it may be variable. Completely dependant on the underlying investments. An annuity is a product. In simple terms, you hnd over a lump sum of cash and receive an agreed annual income until you die. The underlying investment required to reach that income level is not your concern, it's the provider's worry. So there is a hige mount of security to the retiree in having an annuity. The downside of annuities is that the level of income may be too low for your liking. For instance, £400/£10,000 would mean £400 for every £10,000 given to the provider. That's 4% and would take 25 years to break even (ignoring inflation, opportunity cost of investing yourself). Therefore, the gamble is whether you 'outlive' the deal. You could hand over £50,000 to a provider and drop dead a year later. Your £50k got you, say, £2k and then you popped your clogs. Provider wins. Or you could like 40 years after retiring and then you end up costing the provider £80k. You win. Best way to think of an annuity is a route to guaranteed, agreed income. To secure that guarantee, there's a price to pay - and that is, a lower income rate than you might like. Hope that was the kind of reply you were hoping for. If not, edit your OP and ask again. Chris. PS. The explanation on the link you provided is pretty dire. Very confusing use of the term 'pension' and even if that were better, the explanation is still bad due to vagueness. THis is much better: http://www.bbc.co.uk/news/business-26186361",
"title": ""
},
{
"docid": "4ce953f2be99a27290764954c94d939e",
"text": "With an annuity, you invest directly into an annuity with money you have earned as wages/salary/etc. You pay for it, and trade your payments into the annuity for guaranteed payments from the annuity issuer in the future. The more you pay in before the annuity payments begin, the more you will receive for your annuity payment. With a pension, most often you invest implicitly, rather than directly, into the pension. Rather than making a cash contribution on a regular basis, it is likely that your employer has periodically invested into the pension fund for you, using monies that would otherwise have been paid to you if there were no pension system. This is why your pension benefits are often determined based on years of service, your rate of pay, and similar factors.",
"title": ""
},
{
"docid": "9dee813e8d2ce9340ec2beb8f7d87dfc",
"text": "\"An annuity is a product. In simple terms, you hand over a lump sum of cash and receive an agreed annual income until you die. The underlying investment required to reach that income level is not your concern, it's the provider's worry. So there is a huge mount of security to the retiree in having an annuity. It is worth pointing out that with simple annuities where one gives a lump sum of money to (typically) an insurance company, the annuity payments cease upon the death of the annuitant. If any part of the lump sum is still left, that money belongs to the company, not to the heirs of the deceased. Fancier versions of annuities cover the spouse of the annuitant as well (joint and survivor annuity) or guarantee a certain number of payments (e.g. 10-year certain) regardless of when the annuitant dies (payments for the remaining certain term go to the residual beneficiary) etc. How much of an annuity payment the company offers for a fixed lump sum of £X depends on what type of annuity is chosen; usually simple annuities give the maximum bang for the buck. Also, different companies may offer slightly different rates. So, why should one choose to buy an annuity instead of keeping the lump sum in a bank or in fixed deposits (CDs in US parlance), or invested in the stock market or the bond market, etc., and making periodic withdrawals from these assets at a \"\"safe rate of withdrawal\"\"? Safe rates of withdrawal are often touted as 4% per annum in the US, though there are newer studies saying that a smaller rate should be used. Well, safe rates of withdrawal are designed to ensure that the retiree does not use up all the money and is left destitute just when medical bills and other costs are likely to be peaking. Indeed, if all the money were kept in a sock at home (no growth at all), a 4% per annum withdrawal rate will last the retiree for 25 years. With some growth of the lump sum in an investment, somewhat larger withdrawals might be taken in good years, but that 4% is needed even when the investments have declined in value because of economic conditions beyond one's control. So, there are good things and bad things that can happen if one chooses to not buy an annuity. On the other hand, with an annuity, the payments will continue till death and so the retiree feels safer, as Chris mentioned. There is also the serenity in not having to worry how the investments are doing; that's the company's business. A down side, of course, is that the payments are fixed and if inflation is raging, the retiree still gets the same amount. If extra cash is needed one year for unavoidable expenses, the annuity will not provide it, whereas the lump sum (whether kept in a sock or invested) can be drawn on for the extra expense. Another down side is that any money remaining is gone, with nothing left for the heirs. On the plus side, the annuity payments are usually larger than those that the retiree will get via the safe rate of withdrawal method from the lump sum. This is because the insurance company is applying the laws of large numbers: many annuitants will not survive past their life expectancy, and their leftover monies are pure profit to the insurance company, often more than enough (when invested properly by the company) to pay those old codgers who continue to live past their life expectancy. Personally, I wouldn't want to buy an annuity with all my money, but getting an annuity with part of the money is worthwhile. Important: The annuity discussed in this answer is what is sometimes called a single-premium or an immediate annuity. It is purchased at the time of retirement with a single (large) lump sum payment. This is not the kind of annuity that is described in JAGAnalyst's answer which requires payment of (much smaller) premiums over many years. Search this forum for variable annuity to learn about these types of annuities.\"",
"title": ""
}
] |
[
{
"docid": "78999aaed78a1aaf92b2aec0e2e2d863",
"text": "\"Well, perhaps \"\"have a dedicated tax advisor\"\" is an answer then. I wouldn't have thought of this, as it's not specifically about taxation, is it? Or more broadly \"\"consult with a dedicated professional for the situation in detail\"\"... Yes, that is the only real answer you can get. Anything else will vary between highly localized to entirely incorrect. Pensions are rarely defined benefit anymore, and not many countries still keep state-sponsored defined benefit pension plans. For most, what's left is Social Security system, which is in no way a pension. This is an insurance, and is paid as tax which is rarely refundable (but you won't always have to pay it if you're a foreigner in the country). Usually, Social Security benefits are only available to citizens and (/or, in some rare cases) residents of that country. So it is unlikely (although possible) that you'll benefit from social security payments of more than one country. Some countries have totalization treaties that make your social security payments in one count in the other. If you're in a country that has such an agreement with the Netherlands - you're lucky. Your personal pension savings are basically tax-deferred investment accounts. But tax deferral in one country doesn't necessarily work in another. In the US you have 401k or IRA accounts, but in your own country they may very well be taxable. So you gain the tax deferral in the US, but if your own country taxes them - you lost the benefit, and you will still have to abide by the US tax rules when taking the money out. If you don't plan properly you can easily be hit by double taxation in such cases. Bottom line, you need to plan your pension savings on your own, privately, with a good and solid tax advice (and pension planning advice) that would be relevant to all the countries that you are tax resident at at any given time (you can easily be resident for tax purposes in more than one country). These advisers have to take into account the laws of the countries involved, the tax treaties between themselves and between them and the country of your citizenship, and the future countries you're planning on visiting or getting old at. Its complicated, and most likely you won't be able to predict everything, especially because the laws and treaties tend to change over time.\"",
"title": ""
},
{
"docid": "cd51568044da756f3d4c0a41df77506d",
"text": "\"Not to state the obvious, but whenever an investment is being made, the \"\"nuts and bolts\"\" is your return on investment. Analyzing the rate of return on an investment is the primary factor in any decision. Ideally, once the actual mechanics of investment and side \"\"benefits\"\" are factored out, the goal is to be able to analyze the pure financial return. Usually the biggest problem faced in analyzing various investments is comparing the Present Value of an investment to a series of payments that may be made or received in the future. When considering the purchase of a large equity, for example, you might be looking at what series of payments are required to purchase the asset. You can also reverse this and ask, \"\"What amount of money is equivalent to this series of payments?\"\" Ultimately, the Present Value of an Annuity is the way to make these comparisons equal. Fundamentally, the Present Value of an annuity is an amount of money that should, in theory, be equivalent to a series of payments. There is, for example, technically no difference between $1064.94 today and $100 a month for a year, at an interest rate of 1% per month. Grant you, most people would be happier with the money now, but that is what interest does - it compensates you for waiting on your money. You can fire up a spreadsheet and calculate the Present Value as long as you have the monthly payment, interest rate, and number of periods. Alternatively, you can calculate any one of those missing four variables - and the key is usually to understand what that rate would be in order to compare the investments. Finally, the taxable implication is really just an adjustment to the rate of return. Imagine the following three scenarios: (Obviously the rates are fictional - the goal is to show they are the same). Scenarios 1 & 2 are really just two sides of the same coin. Using the Future Value formula in Excel = FV(0.5%, 12, -100), you get $1233.56. In scenario 1, you would have $1233.56 in your bank account. In scenario 2, your bank would have $1233.56 from you, and you would have $100 less debt per month. They are equivalent transactions. Scenario 3 is really just a variation on scenario 2, localized to the United States. Because the interest is tax deductible, however, the rate of 6% isn't really accurate. Assuming you had a 25% tax bracket, you'd actually be getting back one quarter of your interest. Put another way, 7.5% mortgage interest costs you as much as 6% credit card debt. This is how you compare apples and organges - just turn everything into an annuity or a lump sum, using Present Value calculations. Finally, quick rule of thumb - if you owe taxes in both Canada and the US, your Canadian taxes are probably higher than your American ones. As such, any tax incentives will be concomitantly higher. If you only can only use Canadian tax incentives, then look to those incentives, other things being equal.\"",
"title": ""
},
{
"docid": "59d589d10cc8188fd72df234da857fcf",
"text": "That's not a valid counterpoint. It doesn't rub you the right way because it would require you to take responsibility for your own future and do the work yourself. It doesn't rub you the right way because it would mean that you couldn't blame anyone else if you weren't able to retire when you wanted to.",
"title": ""
},
{
"docid": "c883abf8ed36a71a6c5a99486ff7e32f",
"text": "\"Be very careful about terminology when talking about annuities. You used the phrase \"\"4% return\"\" in your question. What exactly do you mean by that? An annuity that pays out 4% of its principle is not giving you a \"\"4% return\"\" in the sense of ROI, because most of that was your money to begin with. But to achieve a true 4% return in the current environment where interest rates are at historic lows on anything safe (10 year UK Gilts at 0.91%) would make me very nervous about what the insurance company is investing my annuity in.\"",
"title": ""
},
{
"docid": "2cb36b9aa5ca41289286cfc032fb1dc3",
"text": "My uncle seen the writing on the wall a year or two ago. He retired early and got his pension out of the company. Apparently the pensions are invested back into the company so they don't only loose their job when the company fails.",
"title": ""
},
{
"docid": "2bff6cd7047ca4577a71b8922e71219c",
"text": "First let's define some terms. Your accrued benefit is a monthly benefit payable at your normal retirement age (usually 65). It is usually a life-only benefit but may have a number of years guaranteed or may have a survivor piece. It is defined by a plan formula (ie, it is a defined benefit). A lump sum is how much that accrued benefit is worth right now. Lump sums are based on applicable interest rates and mortality tables specified by the IRS (interest rates are released monthly, mortality annually). Your plan can either use the same interest rates for a whole year, or they can use new ones each month. Affecting your lump sum is whether your accrued benefit is payable now (immediately, you are age 65), or later (deferred, you are now age 30). For example, instead of being paid an annuity assume you are paid just one payment of $1,000 on your 65th birthday. The lump sum of that for a 65 year old would be $1,000 since there would be no interest discount, and no chance of dying before payment. For a 30 year old, at 4% interest the lump sum would be about $237 (including mortality discount). At age 36 the lump sum is $246. So the lump sum will get bigger just because you get older. Very important is the interest discount. At age 30 in the example, 2% interest would produce a $467 lump sum. And at 6% $122. The bigger the rate, the smaller the lump sum because interest helps an amount now grow bigger in the future. To complicate things, since 2008 the IRS bases lump sums on 3 different interest rates. The monthy annuity payments made within 5 years of the lump sum date use the 1st rate, past 5 and within 20 years use the 2nd rate, and past that use the 3rd rate. Since you are age 30, all of your monthly annuity payments would be made after 20 years, so that makes it simple since we'll only have to look at the 3rd rate. When you reach age 45 the 2nd rate will kick in. Here is the table of interest rates published by the IRS: http://www.irs.gov/Retirement-Plans/Minimum-Present-Value-Segment-Rates You'll find your rates above on the 2013 line for Aug-12. That means your lump sum is being made in 2013 and it is being based on the month August 2012. Most likely your plan will use the same rates for its entire plan year. But what is your plan year? If it is the calendar year, then you would have a 5 month lookback for the rates. But if is a September to August plan year with a 1 month lookback, the rates would have changed between August and September. Your August lump sum would be based on 4.52%, your September on would be based on 5.58% (see the All line for Aug-13). For comparison, a 30 year old with a $100 annuity payable at age 65 would have a lump sum value of $3,011 at 4.52%, but a lump sum value of $1,931 at 5.58%. The change in your accrued benefit by month will obviously have some impact on the lump sum value, but not as much as the change in interest rates if there is one. The amount they actually contribute to the plan has nothing to do with the value of the lump sum though.",
"title": ""
},
{
"docid": "53bbbe5021bddbe05e1a387d777a9afb",
"text": "\"Agreed. The idea that one goes into \"\"retirement\"\", or is expected to, at a certain age, is a little confusing to me. Since when did it become not-the-norm to work until you had enough money saved up, and then stop working. While I take full advantage of retirement tax vehicles, the idea of a dedicated retirement fund, retirement benefits, pension payouts, etc... is a relic of the 1960s.\"",
"title": ""
},
{
"docid": "099e15df86c88e40eec0f9aaaa072526",
"text": "\"403b plans are used by school districts, colleges and universities, nonprofit hospitals, charitable foundations and the like for their employees while 401k plans are used by most everybody else. I would suspect that a school district etc can use a 401k plan instead of a 403b plan if it chooses to do so, but the reverse direction is most likely forbidden: a (for-profit) company cannot use a 403b plan. One difference between a 403b plan and a 401k plan is that the employer can choose to offer, and the employee can choose to purchase, stock in the company inside the 401k plan. This option obviously is not available to charities etc. which don't issue stock. Your comment that the 403b plan invests solely in (variable) annuities suggests that the plan administrator is an insurance company and that the employer is moving to more \"\"modern\"\" version that allows investments in mutual funds and the like. Forty years ago, my 403b plan was like that; the only investment choice was an annuity, but some time in the 1980s, the investment choices were broadened to include mutual funds (possibly because the 1986 Tax Reform Act changed the rules governing 403b plans). So, are you sure that your employer is changing from a 403b plan to a 401k plan, or is it just a change of 403b plan administrator from the insurance company to another administrator who offers investment choices other than an annuity? Note, of course, that insurance companies have changed their options too. For example, TIAA (the Teachers' Insurance and Annuity Association) which was the 403b plan administrator for many schools and colleges became TIAA/CREF (College Retirement Equities Fund) where the CREF mutual funds actually were pretty good investments.\"",
"title": ""
},
{
"docid": "9a5f3049922ed98f4eadcaa65762a7e5",
"text": "I bet you're retired on a pension? Or just stupid? What? I need to no. Just because you tack a term to it, doesn't make it invalid. You should DIE when you are no longer productive. Look at the DEBT you're handing to the future, while your employers run away with the EQUITY!",
"title": ""
},
{
"docid": "a7c209e1b5df83af93c35d1c0a9e196c",
"text": "I'm no expert in this, so this is a legit question. Are 401Ks and pension plans considered HFT or buy & hold? If HFT, would exception rates be beneficial? Or would we want to encourage those groups to reduce frequency as well?",
"title": ""
},
{
"docid": "13b578a78c977b9c73a19c43ac394530",
"text": "I happen to be one such person. When I looked at what I was being offered for a lump sum, then shopped around to see what annuity I could replace it with, the difference between retail and wholesale was blindingly obvious. GM was offering me the wholesale cost (or less), while all the replacement annuities (retail prices) were offering me 1/2 the monthly payment that I'm expecting from the GM pension. After the financial market's meltdown in 2008 lost me between 45 and 55% of my mutual funds' values (some lost more than others), I no longer have the fantasy belief that I can do better managing my money than professional investors. Learning that lesson cost me about $75k - which is several times the amount that I was offered for a buy out. As someone in my 50s, I am far more concerned about outliving my money than I am concerned about having a larger stash of chips. I won't be making $100k/year forever, as age discrimination in software development is widespread, and all the developers I personally know who are older than me, they all mention hitting brick walls getting hired when they hit 54-55 years old. You may notice from the article that this is only for the salaried workers. The hourly workers are due to be shafted some other way.",
"title": ""
},
{
"docid": "82e4a219be65afcddb94527e7ceb52fb",
"text": "\"What is a 403b? A 403(b) plan is a tax-advantaged retirement savings plan available for public education organizations, some non-profit employers (only US Tax Code 501(c)(3) organizations), cooperative hospital service organizations and self-employed ministers in the United States. Kind of a rare thing. A bit more here: http://www.sec.gov/investor/pubs/teacheroptions.htm under investment options Equity Indexed Annuities are a special type of contract between you and an insurance company. During the accumulation period — when you make either a lump sum payment or a series of payments — the insurance company credits you with a return that is based on changes in an equity index, such as the S&P 500 Composite Stock Price Index. The insurance company typically guarantees a minimum return. Guaranteed minimum return rates vary. After the accumulation period, the insurance company will make periodic payments to you under the terms of your contract, unless you choose to receive your contract value in a lump sum. For more information, please see our \"\"Fast Answer\"\" on Equity Indexed Annuities, and read FINRA's investor alert entitled Equity-Indexed Annuitiies — A Complex Choice. So perhaps \"\"equity indexed annuities\"\" is the more correct thing to search for and not \"\"insurance funds\"\"?\"",
"title": ""
},
{
"docid": "8cf516a6018b9748b2cbfb5d09df5214",
"text": "The most important thing is to keep in mind the deadline. If you want to have it count for 2016, you need to open the account and transfer the funds by tax day. Don't wait until the last day to do it, or you could run out of time. Setting up the initial account, and them verifying your information and transferring the money could take a few days. First decide how much of a lump sum you want to invest initially. This will determine some of your options because the mutual fund will have a minimum initial investment. Many of the funds will allow subsequent investments to be smaller. The beauty of a IRA or Roth IRA is that if the fund you want is out of reach for this initial investment in a few years you can transfer the money into another fund or even another fund family without having to worry about tax issues. Now decide on your risk level and you time horizon. Because you said you are student and you want a Roth IRA, it is assumed that you will not need this money for 4+ decades; so you can and should be willing to be a little more risky. As NathanL said an index fund is a great idea. Many also advise an aged based fund. My kids found that when they made their initial investments the age based funds were the only one with a low enough initial investment for their first few years. Then pick a fund family based on the general low fees, and a large mix of options. The best thing is that in a few years as you have more money and more options, you can adjust your choices.",
"title": ""
},
{
"docid": "08fb6d65d0231a99af8117233afd3ed3",
"text": "As mentioned, the main advantage of a 15-year loan compared to a 30-year loan is that the 15-year loan should come at a discounted rate. All things equal, the main advantage of the 30-year loan is that the payment is lower. A completely different argument from what you are hearing is that if you can get a low interest rate, you should get the longest loan possible. It seem unlikely that interest rates are going to get much lower than they are and it's far more likely that they will get higher. In 15 years, if interest rates are back up around 6% or more (where they were when I bought my first home) and you are 15 years into a 30 year mortgage, you'll being enjoying an interest rate that no one can get. You need to keep in mind that as the loan is paid off, you will earn exactly 0% on the principal you've paid. If for some reason the value of the home drops, you lose that portion of the principal. The only way you can get access to that capital is to sell the house. You (generally) can't sell part of the house to send a kid to college. You can take out another mortgage but it is going to be at the current going rate which is likely higher than current rates. Another thing to consider that over the course of 30 years, inflation is going to make a fixed payment cheaper over time. Let's say you make $60K and you have a monthly payment of $1000 or 20% of your annual income. In 15 years at a 1% annualized wage growth rate, it will be 17% of your income. If you get a few raises or inflation jumps up, it will be a lot more than that. For example, at a 2% annualized growth rate, it's only 15% of your income after 15 years. In places where long-term fixed rates are not available, shorter mortgages are common because of the risk of higher rates later. It's also more common to pay them off early for the same reason. Taking on a higher payment to pay off the loan early only really only helps you if you can get through the entire payment and 15 years is still a long way off. Then if you lose your job then, you only have to worry about taxes and upkeep but that means you can still lose the home. If you instead take the extra money and keep a rainy day fund, you'll have access to that money if you hit a rough patch. If you put all of your extra cash in the house, you'll be forced to sell if you need that capital and it may not be at the best time. You might not even be able to pay off the loan at the current market value. My father took out a 30 year loan and followed the advice of an older coworker to 'buy as much house as possible because inflation will pay for it'. By the end of the loan, he was paying something like $250 a month and the house was worth upwards of $200K. That is, his mortgage payment was less than the payment on a cheap car. It was an insignificant cost compared to his income and he had been able to invest enough to retire in comfort. Of course when he bought it, inflation was above 10% so it's bit different today but the same concepts still apply, just different numbers. I personally would not take anything less than a 30 year loan at current rates unless I planned to retire in 15 years.",
"title": ""
}
] |
fiqa
|
15e904b49479b8d777a9e9153425efa2
|
Can capital loss in traditional IRA and Roth IRA be used to offset taxable income?
|
[
{
"docid": "d0d9bd8a9bdb4e3c04b5204ac827f3a0",
"text": "Edited in response to JoeTaxpayer's comment and OP Tim's additional question. To add to and clarify a little what littleadv has said, and to answer OP Tim's next question: As far as the IRS is concerned, you have at most one Individual Retirement Account of each type (Traditional, Roth) though the money in each IRA can be invested with as many different custodians (brokerages, banks, etc.) and different investments as you like. Thus, the maximum $5000 ($6000 for older folks) that you can contribute each year can be split up and invested any which way you like, and when in later years you take a Required Minimum Distribution (RMD) from a Traditional IRA, you can get the money by selling just one of the investments, or from several investments; all that the IRS cares is that the total amount that is distributed to you is at least as large as the RMD. An important corollary is that the balance in your IRA is the sum total of the value of all the investments that various custodians are holding for you in IRA accounts. There is no loss in an IRA until every penny has been withdrawn from every investment in your IRA and distributed to you, thus making your IRA balance zero. As long as you have a positive balance, there is no loss: everything has to come out. After the last distribution from your Roth IRA (the one that empties your entire Roth IRA, no matter where it is invested and reduces your Roth IRA balance (see definition above) to zero), total up all the amounts that you have received as distributions from your Roth IRA. If this is less than the total amount of money you contributed to your Roth IRA (this includes rollovers from a Traditional IRA or Roth 401k etc., but not the earnings within the Roth IRA that you re-invested inside the Roth IRA), you have a loss that can be deducted on Schedule A as a Miscellaneous Deduction subject to the 2% AGI limit. This 2% is not a cap (in the sense that no more than 2% of your AGI can be deducted in this category) but rather a threshold: you can only deduct whatever part of your total Miscellaneous Deductions exceeds 2% of your AGI. Not many people have Miscellaneous Deductions whose total exceeds 2% of their AGI, and so they end up not being able to deduct anything in this category. If you ever made nondeductible contributions to your Traditional IRA because you were ineligible to make a deductible contribution (income too high, pension plan coverage at work etc), then the sum of all these contributions is your basis in your Traditional IRA. Note that your deductible contributions, if any, are not part of the basis. The above rules apply to your basis in your Traditional IRA as well. After the last distribution from your Traditional IRA (the one that empties all your Traditional IRA accounts and reduces your Traditional IRA balance to zero), total up all the distributions that you received (don't forget to include the nontaxable part of each distribution that represents a return of the basis). If the sum total is less than your basis, you have a loss that can be deducted on Schedule A as a Miscellaneous Deduction subject to the 2% AGI threshold. You can only deposit cash into an IRA and take a distribution in cash from an IRA. Now, as JoeTaxpayer points out, if your IRA owns stock, you can take a distribution by having the shares transferred from your IRA account in your brokerage to your personal account in the brokerage. However, the amount of the distribution, as reported by the brokerage to the IRS, is the value of the shares transferred as of the time of the transfer, (more generally the fair market value of the property that is transferred out of the IRA) and this is the amount you report on your income tax return. Any capital gain or loss on those shares remains inside the IRA because your basis (in your personal account) in the shares that came out of the IRA is the amount of the distribution. If you sell these shares at a later date, you will have a (taxable) gain or loss depending on whether you sold the shares for more or less than your basis. In effect, the share transfer transaction is as if you sold the shares in the IRA, took the proceeds as a cash distribution and immediately bought the same shares in your personal account, but you saved the transaction fees for the sale and the purchase and avoided paying the difference between the buying and selling price of the shares as well as any changes in these in the microseconds that would have elapsed between the execution of the sell-shares-in-Tim's-IRA-account, distribute-cash-to-Tim, and buy-shares-in-Tim's-personal account transactions. Of course, your broker will likely charge a fee for transferring ownership of the shares from your IRA to you. But the important point is that any capital gain or loss within the IRA cannot be used to offset a gain or loss in your taxable accounts. What happens inside the IRA stays inside the IRA.",
"title": ""
},
{
"docid": "5525b9a5a45b8b4565fe706e8db400af",
"text": "No, you cannot. If you withdraw everything from all your Roth IRA's and end up with less than the total basis - you can deduct the difference on your schedule A (at the time of the last withdrawal) as an itemized deduction (as misc. deductions with 2% AGI cap). Regular IRA's are pre-tax, you cannot deduct anything from them.",
"title": ""
}
] |
[
{
"docid": "c0b93b112d38314a479678cdc1341f5a",
"text": "Yes, it's possible (and quite legitimate) to do that using depreciation expenses. While there's a large up-front cash expense (a capital expenditure), you then get many years (depending on the usable life of the asset) of depreciation expense that reduces your taxable income. Many capital-intensive businesses can be attractive for just that reason (for example, real estate). Your question is a bit of a reverse on the common criticism that companies overemphasize non-GAAP numbers (like EBITDA) to appear more profitable (or profitable at all) compared with their GAAP Net Income. But it is certainly true that plenty of companies (especially private ones) factor tax considerations into capital expenditure timing and choices.",
"title": ""
},
{
"docid": "4670b0910632a066c4f05dc13cb178eb",
"text": "Answering for just the US part, yes, you should be able to do this and it's a good strategy. The only additional gotcha I can think of is that if you've made after-tax contributions to your traditional IRA, you need to prorate the conversion, you can't just convert all the pre-tax or all the after-tax. I'm not familiar with Oregon personal income tax so there may be additional gotchas there.",
"title": ""
},
{
"docid": "b31759d81a37be387e024a0ceaadc99d",
"text": "\"You don't want to do that. DON'T LIE TO THE IRS!!! We live overseas as well and have researched this extensively. You cannot make $50k overseas and then say you only made $45k to put $5k into retirement. I have heard from some accountants and tax attorneys who interpret the law as saying that the IRS considers Foreign Earned Income as NOT being compensation when computing IRA contribution limits, regardless of whether or not you exclude it. Publication 590-A What is Compensation (scroll down a little to the \"\"What Is Not Compensation\"\" section). Those professionals say that any amounts you CAN exclude, not just ones you actually do exclude. Then there are others that say the 'can' is not implied. So be careful trying to use any foreign-earned income to qualify for retirement contributions. I haven't ran across anyone yet who has gotten caught doing it and paid the price, but that doesn't mean they aren't out there. AN ALTERNATIVE IN CERTAIN CASES: There are two things you can do that we have found to have some sort of taxable income that is preferably not foreign so that you can contribute to a retirement account. We do this by using capital gains from investments as income. Since our AGI is always zero, we pay no short or long term capital gains taxes (as long as we keep short term capital gains lower than $45k) Another way to contribute to a Roth IRA when you have no income is to do an IRA Rollover. Of course, you need money in a tax-deferred account to do this, but this is how it works: I always recommend those who have tax-deferred IRA's and no AGI due to the FEIE to roll over as much as they can every year to a Roth IRA. That really is tax free money. The only tax you'll pay on that money is sales tax when you SPEND IT!! =)\"",
"title": ""
},
{
"docid": "e134c8e2dc970331adafc60acda2ed44",
"text": "\"Welcome to the 'what should otherwise be a simple choice turns into a huge analysis' debate. If the choice were actually simple, we've have one 'golden answer' here and close others as duplicate. But, new questions continue to bring up different scenarios that impact the choice. 4 years ago, I wrote an article in which I discussed The Density of Your IRA. In that article, I acknowledge that, with no other tax favored savings, you can pack more value into the Roth. In hindsight, I failed to add some key points. First, let's go back to what I'd describe as my main thesis: A retired couple hits the top of the 15% bracket with an income of $96,700. (I include just the standard deduction and exemptions.) The tax on this gross sum is $10,452.50 for an 'average' rate of 10.8%. The tax, paid or avoided, upon deposit, is one's marginal rate. But, at retirement, the withdrawals first go through the zero bracket (i.e. the STD deduction and exemptions), then 10%, then 15%. The above is the simplest snapshot. I am retired, and our return this year included Sch A, itemized deductions. Property tax, mort interest, insurance, donations added up fast, and from a gross income (IRA withdrawal) well into the 25% bracket, the effective/average rate was reported as 7.3%. If we had saved in Roth accounts, it would have been subject to 25%. I'd suggest that it's this phenomenon, the \"\"save at marginal 25%, but withdraw at average sub-11%\"\" effect that account for much of the resulting tax savings that the IRA provides. The way you are asking this, you've been focusing on one aspect, I believe. The 'density' issue. That assumes the investor has no 401(k) option. If I were building a spreadsheet to address this, I'd be sure to consider the fact that in a taxable account, long term gains are taxed at 15% for higher earners (I take the liberty to ignore that wealthier taxpayers will pay a maximum 20% tax on long-term capital gains. This higher rate applies when your adjusted gross income falls into the top 39.6% tax bracket.) And those in the 10 or 15% bracket pay 0%. With median household income at $56K in 2016, and the 15% bracket top at $76K, this suggests that most people (gov data shows $75K is 80th percentile) have an effective unlimited Roth. So long as they invest in a way that avoids short term gains, they can rebalance often enough to realize LT gains and pay zero tax. It's likely the $80K+ earner does have access to a 401(k) or other higher deposit account. If they don't, I'd still favor pretax IRAs, with $11K for the couple still 10% or so of their earnings. It would be a shame to lose that zero bracket of that first $20K withdrawal at retirement. Again working backwards, the $78K withdrawal would take nearly $2M in pretax savings to generate. All in today's dollars.\"",
"title": ""
},
{
"docid": "6f8281bef2f328476ed16641d9dde791",
"text": "\"Individuals most definitely can have NOL. This is covered in the IRS publication 536. What is the difference between NOL and capital loss? NOL is Net Operating Loss. I.e.: a situation where your (allowable) expenses and deductions exceed your gross income. Basically it means that you have negative income for that year, for tax purposes. Capital loss occurs when the total amount of your capital gains reported on Schedule D is negative. What are their relations then? Not all expenses and deductions that you usually put on your tax return are allowed for NOL calculation. For example, capital loss is not allowed. I.e.: if you earned $2000 and you lost in stocks $3000 - you do not get a $1K NOL. Capital losses are excluded from NOL calculation and in this scenario you still have non-negative income for NOL purposes even though it is offset in full by capital loss deduction and your \"\"taxable income\"\" line is negative. The $1K that was not allowed - gets carried forward to the next year using the Capital Loss Carryover Worksheet in the instructions to Schedule D. You calculate your NOL using form 1045 schedule A. You can use the form 1045 to apply the NOL to prior 2 years, or you can elect to apply it only to future years (up to 20 years). In what cases, capital loss can be NOL? Never.\"",
"title": ""
},
{
"docid": "087574949c594b657988e98071e4749e",
"text": "\"There are ways to mitigate, but since you're not protected by a tax-deferred/advantaged account, the realized income will be taxed. But you can do any of the followings to reduce the burden: Prefer selling either short positions that are at loss or long positions that are at gain. Do not invest in stocks, but rather in index funds that do the rebalancing for you without (significant) tax impact on you. If you are rebalancing portfolio that includes assets that are not stocks (real-estate, mainly) consider performing 1031 exchanges instead of plain sale and re-purchase. Maximize your IRA contributions, even if non-deductible, and convert them to Roth IRA. Hold your more volatile investments and individual stocks there - you will not be taxed when rebalancing. Maximize your 401K, HSA, SEP-IRA and any other tax-advantaged account you may be eligible for. On some accounts you'll pay taxes when withdrawing, on others - you won't. For example - Roth IRA/401k accounts are not taxed at all when withdrawing qualified distributions, while traditional IRA/401k are taxed as ordinary income. During the \"\"low income\"\" years, consider converting portions of traditional accounts to Roth.\"",
"title": ""
},
{
"docid": "4ee5b35b0455e555d9c22058508cc985",
"text": "\"From Intuit: \"\"Yes, but there are limits. Losses on your investments are first used to offset capital gains of the same type. So short-term losses are first deducted against short-term gains, and long-term losses are deducted against long-term gains. Net losses of either type can then be deducted against the other kind of gain.\"\" \"\"If you have an overall net capital loss for the year, you can deduct up to $3,000 of that loss against other kinds of income, including your salary, for example, and interest income. Any excess net capital loss can be carried over to subsequent years to be deducted against capital gains and against up to $3,000 of other kinds of income.\"\" So in your case, take the loss now if you have short term gains. Also take it if you want to take a deduction on your salary (but this maxes at 3k, but you can keep using an additional 3k each year into the future until its all used up). There isn't really an advantage to a long term loss right now (since long term rates are LOWER than short term rates).\"",
"title": ""
},
{
"docid": "d3ad5c3e23220983ecf4990d8cae163b",
"text": "\"The wash sale rule only applies when the sale in question is at a loss. So the rule does not apply at all to your cases 3, 4, 7, 8, 11, 12, 15, and 16, which all start with a gain. You get a capital gain at the first sale and then a separately computed gain / loss at the second sale, depending on the case, BUT any gain or loss in the IRA is not a taxable event due to the usual tax-advantaged rules for the IRA. The wash sale does not apply to \"\"first\"\" sales in your IRA because there is no taxable gain or loss in that case. That means that you wouldn't be seeking a deduction anyway, and there is nothing to get rolled into the repurchase. This means that the rule does not apply to 1-8. For 5-8, where the second sale is in your brokerage account, you have a \"\"usual\"\" capital gain / loss as if the sale in the IRA didn't happen. (For 1-4, again, the second sale is in the IRA, so that sale is not taxable.) What's left are 9-10 (Brokerage -> IRA) and 13-14 (Brokerage -> Brokerage). The easier two are 13-14. In this case, you cannot take a capital loss deduction for the first sale at a loss. The loss gets added to the basis of the repurchase instead. When you ultimately close the position with the second sale, then you compute your gain or loss based on the modified basis. Note that this means you need to be careful about what you mean by \"\"gain\"\" or \"\"loss\"\" at the second sale, because you need to be careful about when you account for the basis adjustment due to the wash sale. Example 1: All buys and sells are in your brokerage account. You buy initially at $10 and sell at $8, creating a $2 loss. But you buy again within the wash sale window at $9 and sell that at $12. You get no deduction after the first sale because it's wash. You have a $1 capital gain at the second sale because your basis is $11 = $9 + $2 due to the $2 basis adjustment from wash sale. Example 2: Same as Example 1, except that final sale is at $8 instead of at $12. In this case you appear to have taken a $2 loss on the first buy-sell and another $1 loss on the second buy-sell. For taxes however, you cannot claim the loss at the first sale due to the wash. At the second sale, your basis is still $11 (as in Example 1), so your overall capital loss is the $3 dollars that you might expect, computed as the $8 final sale price minus the $11 (wash-adjusted) basis. Now for 9-10 (Brokerage->IRA), things are a little more complicated. In the IRA, you don't worry about the basis of individual stocks that you hold because of the way that tax advantages of those accounts work. You do need to worry about the basis of the IRA account as a whole, however, in some cases. The most common case would be if you have non-deductable contributions to your traditional IRA. When you eventually withdraw, you don't pay tax on any distributions that are attributable to those nondeductible contributions (because you already paid tax on that part). There are other cases where basis of your account matters, but that's a whole question in itself - It's enough for now to understand 1. Basis in your IRA as a whole is a well-defined concept with tax implications, and 2. Basis in individual holdings within your account don't matter. So with the brokerage-IRA wash sale, there are two questions: 1. Can you take the capital loss on the brokerage side? 2. If no because of the wash sale, does this increase the basis of your IRA account (as a whole)? The answer to both is \"\"no,\"\" although the reason is not obvious. The IRS actually put out a Special Bulletin to answer the question specifically because it was unclear in the law. Bottom line for 9-10 is that you apparently are losing your tax deduction completely in that case. In addition, if you were counting on an increase in the basis of your IRA to avoid early distribution penalties, you don't get that either, which will result in yet more tax if you actually take the early distribution. In addition to the Special Bulletin noted above, Publication 550, which talks about wash sale rules for individuals, may also help some.\"",
"title": ""
},
{
"docid": "398402f51ec457500408822627b1c4f2",
"text": "Here's how capital gains are totaled: Long and Short Term. Capital gains and losses are either long-term or short-term. It depends on how long the taxpayer holds the property. If the taxpayer holds it for one year or less, the gain or loss is short-term. Net Capital Gain. If a taxpayer’s long-term gains are more than their long-term losses, the difference between the two is a net long-term capital gain. If the net long-term capital gain is more than the net short-term capital loss, the taxpayer has a net capital gain. So your net long-term gains (from all investments, through all brokers) are offset by any net short-term loss. Short term gains are taxed separately at a higher rate. I'm trying to avoid realizing a long term capital gain, but at the same time trade the stock. If you close in the next year, one of two things will happen - either the stock will go down, and you'll have short-term gains on the short, or the stock will go up, and you'll have short-term losses on the short that will offset the gains on the stock. So I don;t see how it reduces your tax liability. At best it defers it.",
"title": ""
},
{
"docid": "58a27b9898fc1b6ef26969f3623b4ee2",
"text": "Ah, I did some more research and apparently Rental Income is considered Passive Income, and as such the IRS does not allow a net loss to exist, but you can carry the loss over into the next year. https://www.irs.gov/taxtopics/tc425.html Generally, losses from passive activities that exceed the income from passive activities are disallowed for the current year. You can carry forward disallowed passive losses to the next taxable year. A similar rule applies to credits from passive activities. So in the event in a loss on my rental business activity, I simply pay no tax on it, and deduct the remainder in income in 2017 from taxes. I don't make any changes to my Consulting income at all.",
"title": ""
},
{
"docid": "95531953b169263ad599ef40a1d6aad4",
"text": "\"Yes, you can deduct up to your Adjusted Gross Income (AGI) or your contribution limit, whichever is lower. Note that this reduces your taxable income, not your taxes. This is self-employment income, which is included as compensation for IRA purposes. You still have to pay self-employment taxes (Social Security and Medicare) though. You pay those before calculating AGI. So this won't entirely shield your 1099 income from taxes, just from income taxes. Note that if you have both W-2 and 1099-MISC income, you don't get to pick which gets \"\"shielded\"\" from taxes. It all gets mixed together in the same bucket. There may be additional limitations if you are covered by a retirement plan at work.\"",
"title": ""
},
{
"docid": "69a4efad355a9b1337be7e402623dcba",
"text": "As I recall, the gain for ISOs is considered ordinary income, and capital losses can only negate up to $3000 of this each year. If you exercised and held the stock, you have ordinary income to the exercise price, and cap gain above that, if you hold the stock for two years. EDIT - as noted below, this answer works for USians who found this question, but not for the OP who is Canadian, or at least asked a question at it relates to Canada's tax code.",
"title": ""
},
{
"docid": "a7441df191bf69f3085c0437b6b3a0e1",
"text": "In a year with no income, the best advice is to convert existing IRA money to Roth. This lets you take advantage of the 'zero' bracket, the combination of your exemption and standard deduction. This adds to $10,300 for a single person. Other than that, if you are determined to take the money out, just do it. There would be a 10% penalty of the growth, but the original deposit comes out tax free anyway. Edit - There's a rule that if you sell your entire Roth account (i.e. all Roth accounts, you can't pick one of a few) and have a loss, you can take that loss. (Per Dilip's comment, this strategy is pretty moot, it's not a loss taken against other income as a stock loss would potentially be))",
"title": ""
},
{
"docid": "566d3e3101dad35e6f2095d68a51fbaa",
"text": "Not exactly. There are a few ways to manage your taxes with investments. 1) For most investments you get taxed on any gain in value in the investment or dividends paid by that investment. Most investments (with some exceptions for mutual funds) you don't take the tax hit until you sell the investment and realize the gain. For bonds, cds, and other cash type investments you have to pay taxes in the year they pay out the interest or dividend. 2) You can put money (up to a certain limit) in a traditional IRA and can subtract that amount from your income for tax calculation for the year you invest it. However, you are going to pay taxes on it when you take the money out at retirement. It really just delays the taxes. 3) If you put the money in a Roth IRA, you don't get a tax break now, but you don't have to pay any taxes on the money or the gains when you take it out at retirement. 4) The gains from some mutual funds can be tax exempt, but that just saves you from paying tax on the increase in value. 5) Don't fall for scams that try to use insurance policies as investments to avoid taxes. The fees are ginormous, which usually makes them a ripoff.",
"title": ""
},
{
"docid": "957c5899a0d1a893be298c8bffe79a4d",
"text": "It's got to be a bad chunk of data on Google. Yahoo finance does not show that anomaly for 1988, nor does the chart from Home Depot's investor relations site:",
"title": ""
}
] |
fiqa
|
9656fd943a44c219e8222f732021d38a
|
Selling a stock for gain to offset other stock loss
|
[
{
"docid": "209e0a3561e14be2b77fe04a34c4f754",
"text": "Long term gains are taxed at 15% maximum. Losses, up to the $3K/yr you cited, can offset ordinary income, so 25% or higher, depending on your income. Better to take the loss that way. With my usual disclaimer: Do not let the tax tail wag the investing dog.",
"title": ""
}
] |
[
{
"docid": "e8028417ab8882585d653989bfad1b06",
"text": "When you sell a stock that you own, you realize gains, or losses. Short-term gains, realized within a year of buying and selling an asset, are taxed at your maximum (or marginal) tax rate. Long term-gains, realized after a year, are taxed at a lower, preferential rate. The first thing to consider is losses. Losses can be cancelled against gains, reducing your tax liability. Losses can also be carried over to the next tax year and be redeemed against those gains. When you own a bunch of the same type of stock, bought at different times and prices, you can choose which shares to sell. This allows you to decide whether you realize short- or long-term gains (or losses). This is known as lot matching (or order matching). You want to sell the shares that lost value before selling the ones that gained value. Booking losses reduces your taxes; booking gains increases them. If faced with a choice between booking short term and long term losses, I'd go with the former. Since net short-term gains are taxed at a higher rate, I'd want to minimize the short-term tax liability before moving on to long-term tax liability. If my remaining shares had gains, I'd sell the ones purchased earliest since long-term gains are taxed at a lower rate, and delaying the booking of gains converts short-term gains into long-term ones. If there's a formula for this, I'd say it's (profit - loss) x (tax bracket) = tax paid",
"title": ""
},
{
"docid": "451e7176d208d3ff2634c0612d4b61bb",
"text": "The loss for B can be used to write off the gain for A. You will fill out a schedule 3 with cost base and proceeds of disposition. This will give you a $0 capital gain for the year and an amount of $5 (50% of the $10 loss) you can carry forward to offset future capital gains. You can also file a T1-a and carry the losses back up to 3 years if you're so inclined. It can't be used to offset other income (unless you die). Your C and D trades can't be on income account except for very unusual circumstances. It's not generally acceptable to the CRA for you to use 2 separate accounting methods. There are some intricacies but you should probably just use capital gains. There is one caveat that if you do short sales of Canadian listed securities, they will be on income account unless you fill out form T-123 and elect to have them all treated as capital gains. I just remembered one wrinkle in carrying forward capital losses. They don't reduce your capital gains anymore, but they reduce your taxable income. This means your net income won't be reduced and any benefits that are calculated from that (line 236), will not get an increase.",
"title": ""
},
{
"docid": "35d17466538d7ee9d31e8ea996238f46",
"text": "Your three options are: Options 2 and 3 are obviously identical (other than transaction costs), so if you want to keep the stock, go for option 1, otherwise, go for option 3 since you have the same effect as option 2 with no transaction costs. The loss will likely also offset some of the other short term gains you mentioned.",
"title": ""
},
{
"docid": "1276e1f81743f47e0912964e2eba3635",
"text": "\"Your strategy fails to control risk. Your \"\"inversed crash\"\" is called a rally. And These kind of things often turn into bigger rallies because of short squeezes, when all the people that are shorting a stock are forced to close their stock because of margin calls - its not that shorts \"\"scramble\"\" to close their position, the broker AUTOMATICALLY closes your short positions with market orders and you are stuck with the loss. So no, your \"\"trick\"\" is not enough. There are better ways to profit from a bearish outlook.\"",
"title": ""
},
{
"docid": "1d75ded6258a5b4aa5a7f8490256dc8a",
"text": "You need to use one of each, so a single order wouldn't cover this: The stop-loss order could be placed to handle triggering a sell market order if the stock trades at $95 or lower. If you want, you could use a stop-limit order if you have an exit price in mind should the stock price drop to $95 though that requires setting a price for the stop to execute and then another price for the sell order to execute. The limit sell order could be placed to handle triggering a sell if the stock rises above $105. On the bright side, once either is done the other could be canceled as it isn't applicable anymore.",
"title": ""
},
{
"docid": "17c82c8934c11cba29787c4df49b7d52",
"text": "In a comment on this answer you asked It's not clear to me why the ability to defer the gains would matter (since you never materially benefit until you actually sell) but the estate step up in basis is a great point! Could you describe a hypothetical exploitive scenario (utilizing a wash sale) in a little more detail? This sounds like you still have the same question as originally, so I'll take a stab at answering with an example. I sell some security for a $10,000 profit. I then sell another security at a $10,000 loss and immediately rebuy. So pay no taxes (without the rule). Assuming a 15% rate, that's $1500 in savings which I realize immediately. Next year, I sell that same security for a $20,000 profit over the $10,000 loss basis (so a $10,000 profit over my original purchase). I sell and buy another security to pay no taxes. In fact, I pay no taxes like this for fifty years as I live off my investments (and a pension or social security that uses up my tax deductions). Then I die. All my securities step up in basis to their current market value. So I completely evade taxes on $500,000 in profits. That's $75,000 in tax savings to make my heirs richer. And they're already getting at least $500,000 worth of securities. Especially consider the case where I sell a privately held security to a private buyer who then sells me back the same shares at the same price. Don't think that $10,000 is enough? Remember that you also get the original value. But this also scales. It could be $100,000 in gains as well, for $750,000 in tax savings over the fifty years. That's at least $5 million of securities. The effective result of this would be to make a 0% tax on capital gains for many rich people. Worse, a poorer person can't do the same thing. You need to have many investments to take advantage of this. If a relatively poor person with two $500 investments tried this, that person would lose all the benefit in trading fees. And of course such a person would run out of investments quickly. Really poor people have $0 in investments, so this is totally impractical.",
"title": ""
},
{
"docid": "2946b37fe124978cc75eb71e8f0a2c12",
"text": "\"A simple way to ask the question might be to say \"\"why can't I just use the same trick with my own shares to make money on the way down? Why is borrowing someone else's shares necessary to make the concept a viable one? Why isn't it just the inverse of 'going long'?\"\" A simple way to think about it is this: to make money by trading something, you must buy it for less than you sell it for. This applies to stocks like anything else. If you believe the price will go up, then you can buy them first and sell them later for a higher price. But if you believe the price will go down, the only way to buy low and sell high is to sell first and buy later. If you buy the stock and it goes down, any sale you make will lose you money. I'm still not sure I fully understand the point of your example, but one thing to note is that in both cases (i.e., whether you buy the share back at the end or not), you lost money. You say that you \"\"made $5 on the share price dropping\"\", but that isn't true at all: you can see in your example that your final account balance is negative in both cases. You paid $20 for the shares but only got $15 back; you lost $5 (or, in the other version of your example, paid $20 and got back $5 plus the depreciated shares). If you had bought the shares for $20 and sold them for, say, $25, then your account would end up with a positive $5 balance; that is what a gain would look like. But you can't achieve that if you buy the shares for $20 and later sell them for less. At a guess, you seem to be confusing the concept of making a profit with the concept of cutting your losses. It is true that if you buy the shares for $20 and sell them for $15, you lose only $5, whereas if you buy them for $20 and sell for $10, you lose the larger amount of $10. But those are both losses. Selling \"\"early\"\" as the price goes down doesn't make you any money; it just stops you from losing more money than you would if you sold later.\"",
"title": ""
},
{
"docid": "891ae7495fd34bd6e56b712388c08c47",
"text": "\"You have to calculate the total value of all shares and then ask yourself \"\"Would I invest that amount of money in this stock?\"\" If the answer is yes, then only sell what you need to sell. Take the $3k loss against your income, if you have no other gains. If you would not invest that amount of cash in that stock, then sell it all right now and carry forward the excess loss every year. Note at any point you have capital gains you can offset all of them with your loss carryover (not just $3k).\"",
"title": ""
},
{
"docid": "381a1ce7e502b1f9c4471e7dd0327f12",
"text": "\"This is called a Contingent Order and is set up so if one order is filled (in this case) the other order is cancelled. It's a common desire that one would wish to have a stop-loss in place but also a targeted sell price for their in-the-money sell point. Your broker will tell you all you need to know about how to enter this, if you explain you'd like to place a contingent order. (As Victor noted below, your specific order would be a \"\"One Cancels Other\"\" or \"\"OCO\"\") Great first question, welcome to Money,SE.\"",
"title": ""
},
{
"docid": "69a4efad355a9b1337be7e402623dcba",
"text": "As I recall, the gain for ISOs is considered ordinary income, and capital losses can only negate up to $3000 of this each year. If you exercised and held the stock, you have ordinary income to the exercise price, and cap gain above that, if you hold the stock for two years. EDIT - as noted below, this answer works for USians who found this question, but not for the OP who is Canadian, or at least asked a question at it relates to Canada's tax code.",
"title": ""
},
{
"docid": "63d965f32d4308863997d8eb23a05539",
"text": "If one wants to have a bound on the loss percentages that are acceptable, this is would be a way to enforce that. For example, suppose someone wants to have a 5% stop-loss but doesn't want this to be worse than 10% as if the stock goes down more than 10% then the sell shouldn't happen. Thus, if the stock opened in a gap down 15% one day, this triggers the stop-loss and would exit at too low of a price as the gap was quite high as I wonder how familiar are you with how much a stock's price could change that makes the prices not be as continuous as one would think. At least this would be my thinking on a volatile stock where one may want to try to limit losses if the stock does fall within a specific range.",
"title": ""
},
{
"docid": "29051a1f78e6280e783af10934bd5ac1",
"text": "Purchases and sales from the same trade date will both settle on the same settlement date. They don't have to pay for their purchases until later either. Because HFT typically make many offsetting trades -- buying, selling, buying, selling, buying, selling, etc -- when the purchases and sales settle, the amount they pay for their purchases will roughly cancel with the amount they receive for their sales (the difference being their profit or loss). Margin accounts and just having extra cash around can increase their ability to have trades that do not perfectly offset. In practice, the HFT's broker will take a smaller amount of cash (e.g. $1 million) as a deposit of capital, and will then allow the HFT to trade a larger amount of stock value long or short (e.g. $10 million, for 10:1 leverage). That $1 million needs to be enough to cover the net profit/loss when the trades settle, and the broker will monitor this to ensure that deposit will be enough.",
"title": ""
},
{
"docid": "b650fc4e0e907668b3089ab88e802163",
"text": "Equal sized gains and losses in alternating years would lead to an unjust positive tax. On the contrary. If I can take my gains at the long term rate (15%) in even years, but take losses in odd years, up to $3000, or let them offset short term gains at ordinary rate, I've just gamed the system. What is the purpose of the wash sale rule? Respectfully, we here can do a fine job of explaining how a bit of tax code works. And we can suggest the implication of those code bits. But, I suspect that it's not easy to explain the history of particular rules. For wash sale, the simple intent is to not let someone take a loss without actually selling the stock for a time. You'd be right to say the +/- 30 days is arbitrary. I'd ask you to keep 2 things in mind if you continue to frequent this board -",
"title": ""
},
{
"docid": "d87dc6a132fb23f070de78d1b19daad8",
"text": "When you buy a stock, you become a partial owner of the company that the stock is for. As the company is valued at a higher or lower amount, the stock will reflect that by gaining or losing value. You still own that stock. For example, if you bought a stock for $10 per share and next week it is worth $8 dollars per share, the only loss incurred is on paper. You do not have to pay the difference (which I think is what you are asking?) and will only physically lose that money if you sell at that point. Similarly if that stock becomes worth $12, you have only gained money on paper and can only physically see it if you sell at that point.",
"title": ""
},
{
"docid": "2fd055035118e9368579e888c579bdf7",
"text": "It depends to some extent on how you interpret the situation, so I think this is the general idea. Say you purchase one share at $50, and soon after, the price moves up, say, to $55. You now have an unrealized profit of $5. Now, you can either sell and realize that profit, or hold on to the position, expecting a further price appreciation. In either case, you will consider the price change from this traded price, which is $55, and not the price you actually bought at. Hence, if the price fell to $52 in the next trade, you have a loss of $3 on your previous profit of $5. This (even though your net P&L is calculated from the initial purchase price of $50), allows you to think in terms of your positions at the latest known prices. This is similar to a Markov process, in the sense that it doesn't matter which route the stock price (and your position's P&L) took to get to the current point; your decision should be based on the current/latest price level.",
"title": ""
}
] |
fiqa
|
e7cb9eaf8f498e083085b3f427396344
|
TaoStore: Overcoming Asynchronicity in Oblivious Data Storage
|
[
{
"docid": "a9ac82abcad5d4120a6c4d1ea8dacaee",
"text": "The advent of cloud computing has ushered in an era of mass data storage in remote servers. Remote data storage offers reduced data management overhead for data owners in a cost effective manner. Sensitive documents, however, need to be stored in encrypted format due to security concerns. But, encrypted storage makes it difficult to search on the stored documents. Therefore, this poses a major barrier towards selective retrieval of encrypted documents from the remote servers. Various protocols have been proposed for keyword search over encrypted data to address this issue. Most of the available protocols leak data access patterns due to efficiency reasons. Although, oblivious RAM based protocols can be used to hide data access patterns, such protocols are computationally intensive and do not scale well for real world datasets. In this paper, we introduce a novel attack that exploits data access pattern leakage to disclose significant amount of sensitive information using a modicum of prior knowledge. Our empirical analysis with a real world dataset shows that the proposed attack is able to disclose sensitive information with a very high accuracy. Additionally, we propose a simple technique to mitigate the risk against the proposed attack at the expense of a slight increment in computational resources and communication cost. Furthermore, our proposed mitigation technique is generic enough to be used in conjunction with any searchable encryption scheme that reveals data access pattern.",
"title": ""
}
] |
[
{
"docid": "6bc2f0ea840e4b14e1340aa0c0bf4f07",
"text": "A low-voltage low-power CMOS operational transconductance amplifier (OTA) with near rail-to-rail output swing is presented in this brief. The proposed circuit is based on the current-mirror OTA topology. In addition, several circuit techniques are adopted to enhance the voltage gain. Simulated from a 0.8-V supply voltage, the proposed OTA achieves a 62-dB dc gain and a gain–bandwidth product of 160 MHz while driving a 2-pF load. The OTA is designed in a 0.18m CMOS process. The power consumption is 0.25 mW including the common-mode feedback circuit.",
"title": ""
},
{
"docid": "73252fdecc2a01699bdadb4962b4b376",
"text": "Despite significant progress in image-based 3D scene flow estimation, the performance of such approaches has not yet reached the fidelity required by many applications. Simultaneously, these applications are often not restricted to image-based estimation: laser scanners provide a popular alternative to traditional cameras, for example in the context of self-driving cars, as they directly yield a 3D point cloud. In this paper, we propose to estimate 3D motion from such unstructured point clouds using a deep neural network. In a single forward pass, our model jointly predicts 3D scene flow as well as the 3D bounding box and rigid body motion of objects in the scene. While the prospect of estimating 3D scene flow from unstructured point clouds is promising, it is also a challenging task. We show that the traditional global representation of rigid body motion prohibits inference by CNNs, and propose a translation equivariant representation to circumvent this problem. For training our deep network, a large dataset is required. Because of this, we augment real scans from KITTI with virtual objects, realistically modeling occlusions and simulating sensor noise. A thorough comparison with classic and learning-based techniques highlights the robustness of the proposed approach.",
"title": ""
},
{
"docid": "69e98d180d82d559372612013b7bc6a2",
"text": "Intelligent fault diagnosis of bearings has been a heated research topic in the prognosis and health management of rotary machinery systems, due to the increasing amount of available data collected by sensors. This has given rise to more and more business desire to apply data-driven methods for health monitoring of machines. In recent years, various deep learning algorithms have been adapted to this field, including multi-layer perceptrons, autoencoders, convolutional neural networks, and so on. Among these methods, autoencoder is of particular interest for us because of its simple structure and its ability to learn useful features from data in an unsupervised fashion. Previous studies have exploited the use of autoencoders, such as denoising autoencoder, sparsity aotoencoder, and so on, either with one layer or with several layers stacked together, and they have achieved success to certain extent. In this paper, a bearing fault diagnosis method based on fully-connected winner-take-all autoencoder is proposed. The model explicitly imposes lifetime sparsity on the encoded features by keeping only $k$ % largest activations of each neuron across all samples in a mini-batch. A soft voting method is implemented to aggregate prediction results of signal segments sliced by a sliding window to increase accuracy and stability. A simulated data set is generated by adding white Gaussian noise to original signals to test the diagnosis performance under noisy environment. To evaluate the performance of the proposed method, we compare our methods with some state-of-the-art bearing fault diagnosis methods. The experiments result show that, with a simple two-layer network, the proposed method is not only capable of diagnosing with high precision under normal conditions, but also has better robustness to noise than some deeper and more complex models.",
"title": ""
},
{
"docid": "b758085688b08f6bab9026867e9e37fe",
"text": "A key challenge of facial expression recognition (FER) is to develop effective representations to balance the complex distribution of intra- and inter- class variations. The latest deep convolutional networks proposed for FER are trained by penalizing the misclassification of images via the softmax loss. In this paper, we show that better FER performance can be achieved by combining the deep metric loss and softmax loss in a unified two fully connected layer branches framework via joint optimization. A generalized adaptive (N+M)-tuplet clusters loss function together with the identity-aware hard-negative mining and online positive mining scheme are proposed for identity-invariant FER. It reduces the computational burden of deep metric learning, and alleviates the difficulty of threshold validation and anchor selection. Extensive evaluations demonstrate that our method outperforms many state-of-art approaches on the posed as well as spontaneous facial expression databases.",
"title": ""
},
{
"docid": "28d16f96ee1b7789666352f48876fbc4",
"text": "The non-data components of a visualization, such as axes and legends, can often be just as important as the data itself. They provide contextual information essential to interpreting the data. In this paper, we describe an automated system for choosing positions and labels for axis tick marks. Our system extends Wilkinson's optimization-based labeling approach to create a more robust, full-featured axis labeler. We define an expanded space of axis labelings by automatically generating additional nice numbers as needed and by permitting the extreme labels to occur inside the data range. These changes provide flexibility in problematic cases, without degrading quality elsewhere. We also propose an additional optimization criterion, legibility, which allows us to simultaneously optimize over label formatting, font size, and orientation. To solve this revised optimization problem, we describe the optimization function and an efficient search algorithm. Finally, we compare our method to previous work using both quantitative and qualitative metrics. This paper is a good example of how ideas from automated graphic design can be applied to information visualization.",
"title": ""
},
{
"docid": "50e58087f9a02a4a2d828b9434bdea17",
"text": "ÐThis paper concerns an efficient algorithm for the solution of the exterior orientation problem. Orthogonal decompositions are used to first isolate the unknown depths of feature points in the camera reference frame, allowing the problem to be reduced to an absolute orientation with scale problem, which is solved using the SVD. The key feature of this approach is the low computational cost compared to existing approaches. Index TermsÐExterior orientation, pose estimation, absolute orientation, efficient linear method.",
"title": ""
},
{
"docid": "cf0c4ebe8e2d3e8b8dcb668418a39374",
"text": "Despite the progress in Internet of Things (IoT) research, a general software engineering approach for systematic development of IoT systems and applications is still missing. A synthesis of the state of the art in the area can help frame the key abstractions related to such development. Such a framework could be the basis for guidelines for IoT-oriented software engineering.",
"title": ""
},
{
"docid": "384a0a9d9613750892225562cb5ff113",
"text": "Large scale, high concurrency, and vast amount of data are important trends for the new generation of website. Node.js becomes popular and successful to build data-intensive web applications. To study and compare the performance of Node.js, Python-Web and PHP, we used benchmark tests and scenario tests. The experimental results yield some valuable performance data, showing that PHP and Python-Web handle much less requests than that of Node.js in a certain time. In conclusion, our results clearly demonstrate that Node.js is quite lightweight and efficient, which is an idea fit for I/O intensive websites among the three, while PHP is only suitable for small and middle scale applications, and Python-Web is developer friendly and good for large web architectures. To the best of our knowledge, this is the first paper to evaluate these Web programming technologies with both objective systematic tests (benchmark) and realistic user behavior tests (scenario), especially taking Node.js as the main topic to discuss.",
"title": ""
},
{
"docid": "8716f5486949db1007577ca40a91e114",
"text": "The aim of this paper is to check the transient stability of IEEE 7 bus system in electric power system. Three generators are modelled in this system with different MW. Furthermore, modelling of all the system equipment is obtained by Power World Simulator Software. The upgrading and designing the electric power system transient stability analysis is necessary and also study of the stability of the system in short term disturbances is also content for study in itself. The transient stability analysis of IEEE 7 bus system in Power World Simulator determining the idea about the power system transient stability analysis is more important factor. The frequency and variation of power angle at bus and generator parameters are studied with 3-phase balanced fault condition. Also impact of disturbance on load in the system can also model.",
"title": ""
},
{
"docid": "dfcc931d9cd7d084bbbcf400f44756a5",
"text": "In this paper we address the problem of aligning very long (often more than one hour) audio files to their corresponding textual transcripts in an effective manner. We present an efficient recursive technique to solve this problem that works well even on noisy speech signals. The key idea of this algorithm is to turn the forced alignment problem into a recursive speech recognition problem with a gradually restricting dictionary and language model. The algorithm is tolerant to acoustic noise and errors or gaps in the text transcript or audio tracks. We report experimental results on a 3 hour audio file containing TV and radio broadcasts. We will show accurate alignments on speech under a variety of real acoustic conditions such as speech over music and speech over telephone lines. We also report results when the same audio stream has been corrupted with white additive noise or compressed using a popular web encoding format such as RealAudio. This algorithm has been used in our internal multimedia indexing project. It has processed more than 200 hours of audio from varied sources, such as WGBH NOVA documentaries and NPR web audio files. The system aligns speech media content in about one to five times realtime, depending on the acoustic conditions of the audio signal.",
"title": ""
},
{
"docid": "056c5033e71eecb8a683fded0dd149bb",
"text": "There is a severe lack of knowledge regarding the brain regions involved in human sexual performance in general, and female orgasm in particular. We used [15O]-H2O positron emission tomography to measure regional cerebral blood flow (rCBF) in 12 healthy women during a nonsexual resting state, clitorally induced orgasm, sexual clitoral stimulation (sexual arousal control) and imitation of orgasm (motor output control). Extracerebral markers of sexual performance and orgasm were rectal pressure variability (RPstd) and perceived level of sexual arousal (PSA). Sexual stimulation of the clitoris (compared to rest) significantly increased rCBF in the left secondary and right dorsal primary somatosensory cortex, providing the first account of neocortical processing of sexual clitoral information. In contrast, orgasm was mainly associated with profound rCBF decreases in the neocortex when compared with the control conditions (clitoral stimulation and imitation of orgasm), particularly in the left lateral orbitofrontal cortex, inferior temporal gyrus and anterior temporal pole. Significant positive correlations were found between RPstd and rCBF in the left deep cerebellar nuclei, and between PSA and rCBF in the ventral midbrain and right caudate nucleus. We propose that decreased blood flow in the left lateral orbitofrontal cortex signifies behavioural disinhibition during orgasm in women, and that deactivation of the temporal lobe is directly related to high sexual arousal. In addition, the deep cerebellar nuclei may be involved in orgasm-specific muscle contractions while the involvement of the ventral midbrain and right caudate nucleus suggests a role for dopamine in female sexual arousal and orgasm.",
"title": ""
},
{
"docid": "0dfd9fdc0fdaa5ccd2cbdd94833fade3",
"text": "There have been serious concerns recently about the security of microchips from hardware trojan horse insertion during manufacturing. This issue has been raised recently due to outsourcing of the chip manufacturing processes to reduce cost. This is an important consideration especially in critical applications such as avionics, communications, military, industrial and so on. A trojan is inserted into a main circuit at manufacturing and is mostly inactive unless it is triggered by a rare value or time event; then it produces a payload error in the circuit, potentially catastrophic. Because of its nature, a trojan may not be easily detected by functional or ATPG testing. The problem of trojan detection has been addressed only recently in very few works. Our work analyzes and formulates the trojan detection problem based on a frequency analysis under rare trigger values and provides procedures to generate input trigger vectors and trojan test vectors to detect trojan effects. We also provide experimental results.",
"title": ""
},
{
"docid": "c9972414881db682c219d69d59efa34a",
"text": "“Employee turnover” as a term is widely used in business circles. Although several studies have been conducted on this topic, most of the researchers focus on the causes of employee turnover. This research looked at extent of influence of various factors on employee turnover in urban and semi urban banks. The research was aimed at achieving the following objectives: identify the key factors of employee turnover; determine the extent to which the identified factors are influencing employees’ turnover. The study is based on the responses of the employees of leading banks. A self-developed questionnaire, measured on a Likert Scale was used to collect data from respondents. Quantitative research design was used and this design was chosen because its findings are generaliseable and data objective. The reliability of the data collected is done by split half method.. The collected data were being analyzed using a program called Statistical Package for Social Science (SPSS ver.16.0 For Windows). The data analysis is carried out by calculating mean, standard deviation and linear correlation. The difference between means of variable was estimated by using t-test. The following factors have significantly influenced employee turnover in banking sector: Work Environment, Job Stress, Compensation (Salary), Employee relationship with management, Career Growth.",
"title": ""
},
{
"docid": "10947ff2f981ddf28934df8ac640208d",
"text": "The future of tropical forest biodiversity depends more than ever on the effective management of human-modified landscapes, presenting a daunting challenge to conservation practitioners and land use managers. We provide a critical synthesis of the scientific insights that guide our understanding of patterns and processes underpinning forest biodiversity in the human-modified tropics, and present a conceptual framework that integrates a broad range of social and ecological factors that define and contextualize the possible future of tropical forest species. A growing body of research demonstrates that spatial and temporal patterns of biodiversity are the dynamic product of interacting historical and contemporary human and ecological processes. These processes vary radically in their relative importance within and among regions, and have effects that may take years to become fully manifest. Interpreting biodiversity research findings is frequently made difficult by constrained study designs, low congruence in species responses to disturbance, shifting baselines and an over-dependence on comparative inferences from a small number of well studied localities. Spatial and temporal heterogeneity in the potential prospects for biodiversity conservation can be explained by regional differences in biotic vulnerability and anthropogenic legacies, an ever-tighter coupling of human-ecological systems and the influence of global environmental change. These differences provide both challenges and opportunities for biodiversity conservation. Building upon our synthesis we outline a simple adaptive-landscape planning framework that can help guide a new research agenda to enhance biodiversity conservation prospects in the human-modified tropics.",
"title": ""
},
{
"docid": "f56f2119b3e65970db35676fe1cac9ba",
"text": "While behavioral and social sciences occupations comprise one of the largest portions of the \"STEM\" workforce, most studies of diversity in STEM overlook this population, focusing instead on fields such as biomedical or physical sciences. This study evaluates major demographic trends and productivity in the behavioral and social sciences research (BSSR) workforce in the United States during the past decade. Our analysis shows that the demographic trends for different BSSR fields vary. In terms of gender balance, there is no single trend across all BSSR fields; rather, the problems are field-specific, and disciplines such as economics and political science continue to have more men than women. We also show that all BSSR fields suffer from a lack of racial and ethnic diversity. The BSSR workforce is, in fact, less representative of racial and ethnic minorities than are biomedical sciences or engineering. Moreover, in many BSSR subfields, minorities are less likely to receive funding. We point to various funding distribution patterns across different demographic groups of BSSR scientists, and discuss several policy implications.",
"title": ""
},
{
"docid": "96339ea3e87a8df2e38c3d06fcfa4f54",
"text": "This study examines motives for virtually endorsing others on social media, focusing on the Facebook “like” function. Motives are studied in terms of Uses and Gratifications, Theory of Reasoned Action, and personality and technology factors. Data from an online survey of 213 respondents were examined using factorand hierarchical-regression analyses. Findings showed enjoyment and interpersonal relationship as most salient motives. Two types of user profiles emerged. Those with higher self-esteem, more diligence, more",
"title": ""
},
{
"docid": "a1915a869616b9c8c2547f66ec89de13",
"text": "The harvest yield in vineyards can vary significantly from year to year and also spatially within plots due to variations in climate, soil conditions and pests. Fine grained knowledge of crop yields can allow viticulturists to better manage their vineyards. The current industry practice for yield prediction is destructive, expensive and spatially sparse - during the growing season sparse samples are taken and extrapolated to determine overall yield. We present an automated method that uses computer vision to detect and count grape berries. The method could potentially be deployed across large vineyards taking measurements at every vine in a non-destructive manner. Our berry detection uses both shape and visual texture and we can demonstrate detection of green berries against a green leaf background. Berry detections are counted and the eventual harvest yield is predicted. Results are presented for 224 vines (over 450 meters) of two different grape varieties and compared against the actual harvest yield as groundtruth. We calibrate our berry count to yield and find that we can predict yield of individual vineyard rows to within 9.8% of actual crop weight.",
"title": ""
},
{
"docid": "21197ea03a0c9ce6061ea524aca10b52",
"text": "Developers of gamified business applications face the challenge of creating motivating gameplay strategies and creative design techniques to deliver subject matter not typically associated with games in a playful way. We currently have limited models that frame what makes gamification effective (i.e., engaging people with a business application). Thus, we propose a design-centric model and analysis tool for gamification: The kaleidoscope of effective gamification. We take a look at current models of game design, self-determination theory and the principles of systems design to deconstruct the gamification layer in the design of these applications. Based on the layers of our model, we provide design guidelines for effective gamification of business applications.",
"title": ""
},
{
"docid": "2a45fb350731967591487e0b6c9a820c",
"text": "In this chapter, we report the first experimental explorations of reinforcement learning in Tourette syndrome, realized by our team in the last few years. This report will be preceded by an introduction aimed to provide the reader with the state of the art of the knowledge concerning the neural bases of reinforcement learning at the moment of these studies and the scientific rationale beyond them. In short, reinforcement learning is learning by trial and error to maximize rewards and minimize punishments. This decision-making and learning process implicates the dopaminergic system projecting to the frontal cortex-basal ganglia circuits. A large body of evidence suggests that the dysfunction of the same neural systems is implicated in the pathophysiology of Tourette syndrome. Our results show that Tourette condition, as well as the most common pharmacological treatments (dopamine antagonists), affects reinforcement learning performance in these patients. Specifically, the results suggest a deficit in negative reinforcement learning, possibly underpinned by a functional hyperdopaminergia, which could explain the persistence of tics, despite their evident inadaptive (negative) value. This idea, together with the implications of these results in Tourette therapy and the future perspectives, is discussed in Section 4 of this chapter.",
"title": ""
}
] |
scidocsrr
|
52bf372f3351af3c09ccd800fb50233c
|
Adaptive Optical Self-Interference Cancellation Using a Semiconductor Optical Amplifier
|
[
{
"docid": "f84c399ff746a8721640e115fd20745e",
"text": "Self-interference cancellation invalidates a long-held fundamental assumption in wireless network design that radios can only operate in half duplex mode on the same channel. Beyond enabling true in-band full duplex, which effectively doubles spectral efficiency, self-interference cancellation tremendously simplifies spectrum management. Not only does it render entire ecosystems like TD-LTE obsolete, it enables future networks to leverage fragmented spectrum, a pressing global issue that will continue to worsen in 5G networks. Self-interference cancellation offers the potential to complement and sustain the evolution of 5G technologies toward denser heterogeneous networks and can be utilized in wireless communication systems in multiple ways, including increased link capacity, spectrum virtualization, any-division duplexing (ADD), novel relay solutions, and enhanced interference coordination. By virtue of its fundamental nature, self-interference cancellation will have a tremendous impact on 5G networks and beyond.",
"title": ""
}
] |
[
{
"docid": "ab582b371223c25f43e25058883e92fa",
"text": "Internet of Things is an emerging technology having the ability to change the way we live. In IoT vision, each and every 'thing' has the ability of talking to each other that brings the idea of Internet of Everything in reality. Numerous IoT services can make our daily life easier, smarter, and even safer. Using IoT in designing some special services can make a lifesaver system. In this paper, we have presented an IoT enabled approach that can provide emergency communication and location tracking services in a remote car that meets an unfortunate accident or any other emergency situation. Immediately after an accident or an emergency, the system either starts automatically or may be triggered manually. Depending upon type of emergency (police and security, fire and rescue, medical, or civil) it initiates communication and shares critical information e.g. location information, a set of relevant images taken from prefixed angles etc. with appropriate server / authority. Provision of interactive real-time multimedia communication, real-time location tracking etc. have also been integrated to the proposed system to monitor the exact condition in real-time basis. The system prototype has been designed with Raspberry Pi 3 Model B and UMTS-HSDPA communication protocol.",
"title": ""
},
{
"docid": "90414004f8681198328fb48431a34573",
"text": "Process models play important role in computer aided process engineering. Although the structure of these models are a priori known, model parameters should be estimated based on experiments. The accuracy of the estimated parameters largely depends on the information content of the experimental data presented to the parameter identification algorithm. Optimal experiment design (OED) can maximize the confidence on the model parameters. The paper proposes a new additive sequential evolutionary experiment design approach to maximize the amount of information content of experiments. The main idea is to use the identified models to design new experiments to gradually improve the model accuracy while keeping the collected information from previous experiments. This scheme requires an effective optimization algorithm, hence the main contribution of the paper is the incorporation of Evolutionary Strategy (ES) into a new iterative scheme of optimal experiment design (AS-OED). This paper illustrates the applicability of AS-OED for the design of feeding profile for a fed-batch biochemical reactor.",
"title": ""
},
{
"docid": "45d496fe8762fa52bbf6430eda2b7cfd",
"text": "This paper presents deployment algorithms for multiple mobile robots with line-of-sight sensing and communication capabilities in a simple nonconvex polygonal environment. The objective of the proposed algorithms is to achieve full visibility of the environment. We solve the problem by constructing a novel data structure called the vertex-induced tree and designing schemes to deploy over the nodes of this tree by means of distributed algorithms. The agents are assumed to have access to a local memory and their operation is partially asynchronous",
"title": ""
},
{
"docid": "c64b13db5a4c35861b06ec53c5c73946",
"text": "In this paper, we address the problem of searching for semantically similar images from a large database. We present a compact coding approach, supervised quantization. Our approach simultaneously learns feature selection that linearly transforms the database points into a low-dimensional discriminative subspace, and quantizes the data points in the transformed space. The optimization criterion is that the quantized points not only approximate the transformed points accurately, but also are semantically separable: the points belonging to a class lie in a cluster that is not overlapped with other clusters corresponding to other classes, which is formulated as a classification problem. The experiments on several standard datasets show the superiority of our approach over the state-of-the art supervised hashing and unsupervised quantization algorithms.",
"title": ""
},
{
"docid": "4b0b2c7168fa04543d77bee46af14b0a",
"text": "Individuals face privacy risks when providing personal location data to potentially untrusted location based services (LBSs). We develop and demonstrate CacheCloak, a system that enables realtime anonymization of location data. In CacheCloak, a trusted anonymizing server generates mobility predictions from historical data and submits intersecting predicted paths simultaneously to the LBS. Each new predicted path is made to intersect with other users' paths, ensuring that no individual user's path can be reliably tracked over time. Mobile users retrieve cached query responses for successive new locations from the trusted server, triggering new prediction only when no cached response is available for their current locations. A simulated hostile LBS with detailed mobility pattern data attempts to track users of CacheCloak, generating a quantitative measure of location privacy over time. GPS data from a GIS-based traffic simulation in an urban environment shows that CacheCloak can achieve realtime location privacy without loss of location accuracy or availability.",
"title": ""
},
{
"docid": "7d23d8d233a3fc7ff75edf361acbe642",
"text": "The diagnosis and treatment of chronic patellar instability caused by trochlear dysplasia can be challenging. A dysplastic trochlea leads to biomechanical and kinematic changes that often require surgical correction when symptomatic. In the past, trochlear dysplasia was classified using the 4-part Dejour classification system. More recently, new classification systems have been proposed. Future studies are needed to investigate long-term outcomes after trochleoplasty.",
"title": ""
},
{
"docid": "04b0f8be4eaa99aa6ee5cc6b7c6ad662",
"text": "Systems designed with measurement and attestation in mind are often layered, with the lower layers measuring the layers above them. Attestations of such systems, which we call layered attestations, must bundle together the results of a diverse set of application-specific measurements of various parts of the system. Some methods of layered at-testation are more trustworthy than others, so it is important for system designers to understand the trust consequences of different system configurations. This paper presents a formal framework for reasoning about layered attestations, and provides generic reusable principles for achieving trustworthy results.",
"title": ""
},
{
"docid": "8b51bcd5d36d9e15419d09b5fc8995b5",
"text": "In this technical report, we study estimator inconsistency in Vision-aided Inertial Navigation Systems (VINS) from a standpoint of system observability. We postulate that a leading cause of inconsistency is the gain of spurious information along unobservable directions, resulting in smaller uncertainties, larger estimation errors, and divergence. We support our claim with an analytical study of the Observability Gramian, along with its right nullspace, which constitutes the basis of the unobservable directions of the system. We develop an Observability-Constrained VINS (OC-VINS), which explicitly enforces the unobservable directions of the system, hence preventing spurious information gain and reducing inconsistency. Our analysis, along with the proposed method for reducing inconsistency, are extensively validated with simulation trials and real-world experimentation.",
"title": ""
},
{
"docid": "265d69d874481270c26eb371ca05ac51",
"text": "A compact dual-band dual-polarized antenna is proposed in this paper. The two pair dipoles with strong end coupling are used for the lower frequency band, and cross-placed patch dipoles are used for the upper frequency band. The ends of the dipoles for lower frequency band are bent to increase the coupling between adjacent dipoles, which can benefit the compactness and bandwidth of the antenna. Breaches are introduced at the ends of the dipoles of the upper band, which also benefit the compactness and matching of the antenna. An antenna prototype was fabricated and measured. The measured results show that the antenna can cover from 790 MHz to 960 MHz (19.4%) for lower band and from 1710 MHz to 2170 MHz (23.7%) for upper band with VSWR < 1.5. It is expected to be a good candidate design for base station antennas.",
"title": ""
},
{
"docid": "0a035cbf258996b1c1ae6662c8e2cc69",
"text": "This paper analyzes the authentication and key agreement protocol adopted by Universal Mobile Telecommunication System (UMTS), an emerging standard for third-generation (3G) wireless communications. The protocol, known as 3GPP AKA, is based on the security framework in GSM and provides significant enhancement to address and correct real and perceived weaknesses in GSM and other wireless communication systems. In this paper, we first show that the 3GPP AKA protocol is vulnerable to a variant of the so-called false base station attack. The vulnerability allows an adversary to redirect user traffic from one network to another. It also allows an adversary to use authentication vectors corrupted from one network to impersonate all other networks. Moreover, we demonstrate that the use of synchronization between a mobile station and its home network incurs considerable difficulty for the normal operation of 3GPP AKA. To address such security problems in the current 3GPP AKA, we then present a new authentication and key agreement protocol which defeats redirection attack and drastically lowers the impact of network corruption. The protocol, called AP-AKA, also eliminates the need of synchronization between a mobile station and its home network. AP-AKA specifies a sequence of six flows. Dependent on the execution environment, entities in the protocol have the flexibility of adaptively selecting flows for execution, which helps to optimize the efficiency of AP-AKA both in the home network and in foreign networks.",
"title": ""
},
{
"docid": "287b284529dc5d5ac183700917a42755",
"text": "Reconfiguration, by exchanging the functional links between the elements of the system, represents one of the most important measures which can improve the operational performance of a distribution system. The authors propose an original method, aiming at achieving such optimization through the reconfiguration of distribution systems taking into account various criteria in a flexible and robust approach. The novelty of the method consists in: the criteria for optimization are evaluated on active power distribution systems (containing distributed generators connected directly to the main distribution system and microgrids operated in grid-connected mode); the original formulation (Pareto optimality) of the optimization problem and an original genetic algorithm (based on NSGA-II) to solve the problem in a non-prohibitive execution time. The comparative tests performed on test systems have demonstrated the accuracy and promptness of the proposed algorithm. OPEN ACCESS Energies 2013, 6 1440",
"title": ""
},
{
"docid": "a31358ffda425f8e3f7fd15646d04417",
"text": "We elaborate the design and simulation of a planar antenna that is suitable for CubeSat picosatellites. The antenna operates at 436 MHz and its main features are miniature size and the built-in capability to produce circular polarization. The miniaturization procedure is given in detail, and the electrical performance of this small antenna is documented. Two main miniaturization techniques have been applied, i.e. dielectric loading and distortion of the current path. We have added an extra degree of freedom to the latter. The radiator is integrated with the chassis of the picosatellite and, at the same time, operates at the lower end of the UHF spectrum. In terms of electrical size, the structure presented herein is one of the smallest antennas that have been proposed for small satellites. Despite its small electrical size, the antenna maintains acceptable efficiency and gain performance in the band of interest.",
"title": ""
},
{
"docid": "fb2b4ebce6a31accb3b5407f24ad64ba",
"text": "The number of multi-robot systems deployed in field applications has risen dramatically over the years. Nevertheless, supervising and operating multiple robots at once is a difficult task for a single operator to execute. In this paper we propose a novel approach for utilizing advising automated agents when assisting an operator to better manage a team of multiple robots in complex environments. We introduce the Myopic Advice Optimization (MYAO) Problem and exemplify its implementation using an agent for the Search And Rescue (SAR) task. Our intelligent advising agent was evaluated through extensive field trials, with 44 non-expert human operators and 10 low-cost mobile robots, in simulation and physical deployment, and showed a significant improvement in both team performance and the operator’s satisfaction.",
"title": ""
},
{
"docid": "19ab044ed5154b4051cae54387767c9b",
"text": "An approach is presented for minimizing power consumption for digital systems implemented in CMOS which involves optimization at all levels of the design. This optimization includes the technology used to implement the digital circuits, the circuit style and topology, the architecture for implementing the circuits and at the highest level the algorithms that are being implemented. The most important technology consideration is the threshold voltage and its control which allows the reduction of supply voltage without signijcant impact on logic speed. Even further supply reductions can be made by the use of an architecture-based voltage scaling strategy, which uses parallelism and pipelining, to tradeoff silicon area and power reduction. Since energy is only consumed when capacitance is being switched, power can be reduced by minimizing this capacitance through operation reduction, choice of number representation, exploitation of signal correlations, resynchronization to minimize glitching, logic design, circuit design, and physical design. The low-power techniques that are presented have been applied to the design of a chipset for a portable multimedia terminal that supports pen input, speech I/O and fullmotion video. The entire chipset that perjorms protocol conversion, synchronization, error correction, packetization, buffering, video decompression and D/A conversion operates from a 1.1 V supply and consumes less than 5 mW.",
"title": ""
},
{
"docid": "42cf4bd800000aed5e0599cba52ba317",
"text": "There is a significant amount of controversy related to the optimal amount of dietary carbohydrate. This review summarizes the health-related positives and negatives associated with carbohydrate restriction. On the positive side, there is substantive evidence that for many individuals, low-carbohydrate, high-protein diets can effectively promote weight loss. Low-carbohydrate diets (LCDs) also can lead to favorable changes in blood lipids (i.e., decreased triacylglycerols, increased high-density lipoprotein cholesterol) and decrease the severity of hypertension. These positives should be balanced by consideration of the likelihood that LCDs often lead to decreased intakes of phytochemicals (which could increase predisposition to cardiovascular disease and cancer) and nondigestible carbohydrates (which could increase risk for disorders of the lower gastrointestinal tract). Diets restricted in carbohydrates also are likely to lead to decreased glycogen stores, which could compromise an individual's ability to maintain high levels of physical activity. LCDs that are high in saturated fat appear to raise low-density lipoprotein cholesterol and may exacerbate endothelial dysfunction. However, for the significant percentage of the population with insulin resistance or those classified as having metabolic syndrome or prediabetes, there is much experimental support for consumption of a moderately restricted carbohydrate diet (i.e., one providing approximately 26%-44 % of calories from carbohydrate) that emphasizes high-quality carbohydrate sources. This type of dietary pattern would likely lead to favorable changes in the aforementioned cardiovascular disease risk factors, while minimizing the potential negatives associated with consumption of the more restrictive LCDs.",
"title": ""
},
{
"docid": "f4617250b5654a673219d779952db35f",
"text": "Convolutional neural network (CNN) models have achieved tremendous success in many visual detection and recognition tasks. Unfortunately, visual tracking, a fundamental computer vision problem, is not handled well using the existing CNN models, because most object trackers implemented with CNN do not effectively leverage temporal and contextual information among consecutive frames. Recurrent neural network (RNN) models, on the other hand, are often used to process text and voice data due to their ability to learn intrinsic representations of sequential and temporal data. Here, we propose a novel neural network tracking model that is capable of integrating information over time and tracking a selected target in video. It comprises three components: a CNN extracting best tracking features in each video frame, an RNN constructing video memory state, and a reinforcement learning (RL) agent making target location decisions. The tracking problem is formulated as a decision-making process, and our model can be trained with RL algorithms to learn good tracking policies that pay attention to continuous, inter-frame correlation and maximize tracking performance in the long run. We compare our model with an existing neural-network based tracking method and show that the proposed tracking approach works well in various scenarios by performing rigorous validation experiments on artificial video sequences with ground truth. To the best of our knowledge, our tracker is the first neural-network tracker that combines convolutional and recurrent networks with RL algorithms.",
"title": ""
},
{
"docid": "ad9dcb0d49afccecf336621a782bca09",
"text": "Online reviews are an important source for consumers to evaluate products/services on the Internet (e.g. Amazon, Yelp, etc.). However, more and more fraudulent reviewers write fake reviews to mislead users. To maximize their impact and share effort, many spam attacks are organized as campaigns, by a group of spammers. In this paper, we propose a new two-step method to discover spammer groups and their targeted products. First, we introduce NFS (Network Footprint Score), a new measure that quantifies the likelihood of products being spam campaign targets. Second, we carefully devise GroupStrainer to cluster spammers on a 2-hop subgraph induced by top ranking products. Our approach has four key advantages: (i) unsupervised detection; both steps require no labeled data, (ii) adversarial robustness; we quantify statistical distortions in the review network, of which spammers have only a partial view, and avoid any side information that spammers can easily evade, (iii) sensemaking; the output facilitates the exploration of the nested hierarchy (i.e., organization) among the spammers, and finally (iv) scalability; both steps have complexity linear in network size, moreover, GroupStrainer operates on a carefully induced subnetwork. We demonstrate the efficiency and effectiveness of our approach on both synthetic and real-world datasets from two different domains with millions of products and reviewers. Moreover, we discover interesting strategies that spammers employ through case studies of our detected groups.",
"title": ""
},
{
"docid": "809508abfa4d7dfad1c43f09c8aa137e",
"text": "In this article, an original design of a range illuminator based on a stepped-septum polarizer and a dual-mode horn is discussed. However, the designed polarizer can also be used with other waveguide antennas, such as pyramidal horns and corrugated horns. A simple procedure for determining the initial septum geometry for the subsequent optimization is described, and based on this, a two-step septum polarizer is developed. A carefully designed dual-mode horn antenna with a rectangular aperture is then utilized to increase the illuminator's gain and suppress sidelobe levels. Results of full-wave electromagnetic simulations are presented and compared to experimentally measured data with good agreement.",
"title": ""
},
{
"docid": "62c3c062bbea8151543e0491190cf02d",
"text": "In this article, we present a survey of recent advances in passive human behaviour recognition in indoor areas using the channel state information (CSI) of commercial WiFi systems. Movement of human body causes a change in the wireless signal reflections, which results in variations in the CSI. By analyzing the data streams of CSIs for different activities and comparing them against stored models, human behaviour can be recognized. This is done by extracting features from CSI data streams and using machine learning techniques to build models and classifiers. The techniques from the literature that are presented herein have great performances, however, instead of the machine learning techniques employed in these works, we propose to use deep learning techniques such as long-short term memory (LSTM) recurrent neural network (RNN), and show the improved performance. We also discuss about different challenges such as environment change, frame rate selection, and multi-user scenario, and suggest possible directions for future work.",
"title": ""
}
] |
scidocsrr
|
ca375bbe967f4a346f70e10602ed3a8e
|
Spatial Predictive Control for Agile Semi-Autonomous Ground Vehicles
|
[
{
"docid": "6cb7cded3c10f00228ac58ff3b82d45e",
"text": "This paper presents a hierarchical control framework for the obstacle avoidance of autonomous and semi-autonomous ground vehicles. The high-level planner is based on motion primitives created from a four-wheel nonlinear dynamic model. Parameterized clothoids and drifting maneuvers are used to improve vehicle agility. The low-level tracks the planned trajectory with a nonlinear Model Predictive Controller. The first part of the paper describes the proposed control architecture and methodology. The second part presents simulative and experimental results with an autonomous and semi-autonomous ground vehicle traveling at high speed on an icy surface.",
"title": ""
}
] |
[
{
"docid": "543218f4bb3516a1d588715b7ede8730",
"text": "In this paper, we present a CMOS digital image stabilization algorithm based on the characteristics of a rolling shutter camera. Due to the rolling shuttering mechanism of a CMOS sensor, a CMOS video frame shows CMOS distortions which are not observed in a CCD video frame, and previous video stabilization techniques cannot handle these distortions properly even though they can make a visually stable CMOS video sequence. In our proposed algorithm, we first suggest a CMOS distortion model. This model is based on a rolling shutter mechanism which provides a solution to solve the CMOS distortion problem. Next, we estimate the global image motion and the CMOS distortion transformation directly from the homography between CMOS frames. Using the two transformations, we remove CMOS distortions as well as jittering motions in a CMOS video. In the experimental results, we demonstrate that our proposed algorithm can handle the CMOS distortion problem more effectively as well as the jittering problem in a CMOS video compared to previous CCD-based digital image stabilization techniques.",
"title": ""
},
{
"docid": "a7ab755978c9309513ac79dbd6b09763",
"text": "In this paper, we propose a denoising method motivated by our previous analysis of the performance bounds for image denoising. Insights from that study are used here to derive a high-performance practical denoising algorithm. We propose a patch-based Wiener filter that exploits patch redundancy for image denoising. Our framework uses both geometrically and photometrically similar patches to estimate the different filter parameters. We describe how these parameters can be accurately estimated directly from the input noisy image. Our denoising approach, designed for near-optimal performance (in the mean-squared error sense), has a sound statistical foundation that is analyzed in detail. The performance of our approach is experimentally verified on a variety of images and noise levels. The results presented here demonstrate that our proposed method is on par or exceeding the current state of the art, both visually and quantitatively.",
"title": ""
},
{
"docid": "f3f4cb6e7e33f54fca58c14ce82d6b46",
"text": "In this letter, a novel slot array antenna with a substrate-integrated coaxial line (SICL) technique is proposed. The proposed antenna has radiation slots etched homolaterally along the mean line in the top metallic layer of SICL and achieves a compact transverse dimension. A prototype with 5 <inline-formula><tex-math notation=\"LaTeX\">$\\times$ </tex-math></inline-formula> 10 longitudinal slots is designed and fabricated with a multilayer liquid crystal polymer (LCP) process. A maximum gain of 15.0 dBi is measured at 35.25 GHz with sidelobe levels of <inline-formula> <tex-math notation=\"LaTeX\">$-$</tex-math></inline-formula> 28.2 dB (<italic>E</italic>-plane) and <inline-formula> <tex-math notation=\"LaTeX\">$-$</tex-math></inline-formula> 33.1 dB (<italic>H</italic>-plane). The close correspondence between experimental results and designed predictions on radiation patterns has validated the proposed excogitation in the end.",
"title": ""
},
{
"docid": "3df9bacf95281fc609ee7fd2d4724e91",
"text": "The deleterious effects of plastic debris on the marine environment were reviewed by bringing together most of the literature published so far on the topic. A large number of marine species is known to be harmed and/or killed by plastic debris, which could jeopardize their survival, especially since many are already endangered by other forms of anthropogenic activities. Marine animals are mostly affected through entanglement in and ingestion of plastic litter. Other less known threats include the use of plastic debris by \"invader\" species and the absorption of polychlorinated biphenyls from ingested plastics. Less conspicuous forms, such as plastic pellets and \"scrubbers\" are also hazardous. To address the problem of plastic debris in the oceans is a difficult task, and a variety of approaches are urgently required. Some of the ways to mitigate the problem are discussed.",
"title": ""
},
{
"docid": "d308f448dc6d951948ccf4319aef359f",
"text": "Spondylolysis is an osseous defect of the pars interarticularis, thought to be a developmental or acquired stress fracture secondary to chronic low-grade trauma. It is encountered most frequently in adolescents, most commonly involving the lower lumbar spine, with particularly high prevalence among athletes involved in certain sports or activities. Spondylolysis can be asymptomatic or can be a cause of spine instability, back pain, and radiculopathy. The biomechanics and pathophysiology of spondylolysis are complex and debated. Imaging is utilized to detect spondylolysis, distinguish acute and active lesions from chronic inactive non-union, help establish prognosis, guide treatment, and to assess bony healing. Radiography with satisfactory technical quality can often demonstrate a pars defect. Multislice CT with multiplanar reformats is the most accurate modality for detecting the bony defect and may also be used for assessment of osseous healing; however, as with radiographs, it is not sensitive for detection of the early edematous stress response without a fracture line and exposes the patient to ionizing radiation. Magnetic resonance (MR) imaging should be used as the primary investigation for adolescents with back pain and suspected stress reactions of the lumbar pars interarticularis. Several imaging pitfalls render MR imaging less sensitive than CT for directly visualizing the pars defects (regional degenerative changes and sclerosis). Nevertheless, the presence of bone marrow edema on fluid-sensitive images is an important early finding that may suggest stress response without a visible fracture line. Moreover, MR is the imaging modality of choice for identifying associated nerve root compression. Single-photon emission computed tomography (SPECT) use is limited by a high rate of false-positive and false-negative results and by considerable ionizing radiation exposure. In this article, we provide a review of the current concepts regarding spondylolysis, its epidemiology, pathogenesis, and general treatment guidelines, as well as a detailed review and discussion of the imaging principles for the diagnosis and follow-up of this condition.",
"title": ""
},
{
"docid": "61f9711b65d142b5537b7d3654bbbc3c",
"text": "Now-a-days as there is prohibitive demand for agricultural industry, effective growth and improved yield of fruit is necessary and important. For this purpose farmers need manual monitoring of fruits from harvest till its progress period. But manual monitoring will not give satisfactory result all the times and they always need satisfactory advice from expert. So it requires proposing an efficient smart farming technique which will help for better yield and growth with less human efforts. We introduce a technique which will diagnose and classify external disease within fruits. Traditional system uses thousands of words which lead to boundary of language. Whereas system that we have come up with, uses image processing techniques for implementation as image is easy way for conveying. In the proposed work, OpenCV library is applied for implementation. K-means clustering method is applied for image segmentation, the images are catalogue and mapped to their respective disease categories on basis of four feature vectors color, morphology, texture and structure of hole on the fruit. The system uses two image databases, one for implementation of query images and the other for training of already stored disease images. Artificial Neural Network (ANN) concept is used for pattern matching and classification of diseases.",
"title": ""
},
{
"docid": "a411780d406e8b720303d18cd6c9df68",
"text": "Functional organization of the lateral temporal cortex in humans is not well understood. We recorded blood oxygenation signals from the temporal lobes of normal volunteers using functional magnetic resonance imaging during stimulation with unstructured noise, frequency-modulated (FM) tones, reversed speech, pseudowords and words. For all conditions, subjects performed a material-nonspecific detection response when a train of stimuli began or ceased. Dorsal areas surrounding Heschl's gyrus bilaterally, particularly the planum temporale and dorsolateral superior temporal gyrus, were more strongly activated by FM tones than by noise, suggesting a role in processing simple temporally encoded auditory information. Distinct from these dorsolateral areas, regions centered in the superior temporal sulcus bilaterally were more activated by speech stimuli than by FM tones. Identical results were obtained in this region using words, pseudowords and reversed speech, suggesting that the speech-tones activation difference is due to acoustic rather than linguistic factors. In contrast, previous comparisons between word and nonword speech sounds showed left-lateralized activation differences in more ventral temporal and temporoparietal regions that are likely involved in processing lexical-semantic or syntactic information associated with words. The results indicate functional subdivision of the human lateral temporal cortex and provide a preliminary framework for understanding the cortical processing of speech sounds.",
"title": ""
},
{
"docid": "9a2d79d9df9e596e26f8481697833041",
"text": "Novelty search is a recent artificial evolution technique that challenges traditional evolutionary approaches. In novelty search, solutions are rewarded based on their novelty, rather than their quality with respect to a predefined objective. The lack of a predefined objective precludes premature convergence caused by a deceptive fitness function. In this paper, we apply novelty search combined with NEAT to the evolution of neural controllers for homogeneous swarms of robots. Our empirical study is conducted in simulation, and we use a common swarm robotics task—aggregation, and a more challenging task—sharing of an energy recharging station. Our results show that novelty search is unaffected by deception, is notably effective in bootstrapping evolution, can find solutions with lower complexity than fitness-based evolution, and can find a broad diversity of solutions for the same task. Even in non-deceptive setups, novelty search achieves solution qualities similar to those obtained in traditional fitness-based evolution. Our study also encompasses variants of novelty search that work in concert with fitness-based evolution to combine the exploratory character of novelty search with the exploitatory character of objective-based evolution. We show that these variants can further improve the performance of novelty search. Overall, our study shows that novelty search is a promising alternative for the evolution of controllers for robotic swarms.",
"title": ""
},
{
"docid": "15d70d12d8c410907675c528ae1bafda",
"text": "This is an extremely welcome addition to the Information Retrieval (IR) literature. Because of its technical approach it is much different from most of the available books on IR. The book consists of five sections containing eighteen chapters. The chapters are written by different authors.",
"title": ""
},
{
"docid": "100b4df0a86534cba7078f4afc247206",
"text": "Presented in this article is a review of manufacturing techniques and introduction of reconfigurable manufacturing systems; a new paradigm in manufacturing which is designed for rapid adjustment of production capacity and functionality, in response to new market conditions. A definition of reconfigurable manufacturing systems is outlined and an overview of available manufacturing techniques, their key drivers and enablers, and their impacts, achievements and limitations is presented. A historical review of manufacturing from the point-of-view of the major developments in the market, technology and sciences issues affecting manufacturing is provided. The new requirements for manufacturing are discussed and characteristics of reconfigurable manufacturing systems and their key role in future manufacturing are explained. The paper is concluded with a brief review of specific technologies and research issues related to RMSs.",
"title": ""
},
{
"docid": "fa55a893ff3c77928644f7bfdac0c643",
"text": "Evaluating the maxilla-mandibular vertical dimension is of great importance in constructing successful denture prosthesis, however it is a tedious process which may be misinterpreted leading to false readings. Hence with the aid of cephalometric analysis a cephalogram may present a graphic representation .this study aims to introduce a new mathematical method for of determination the occlusal vertical dimension (O.V.D.). : The first part was conducted to derive a clinical ratio between the O.V.D. and the ear-eye distance, as well as to derive a radiographical ratio between the same distances on a lateral cephalometric view. The second part of this study aimed to evaluate the accuracy of clinical and radiographical application of the ratios that were derived from the first part in estimating the O.V.D from the ear-eye distance measured in dentate subjects.",
"title": ""
},
{
"docid": "9006586ffd85d5c2fb7611b3b0332519",
"text": "Systematic compositionality is the ability to recombine meaningful units with regular and predictable outcomes, and it’s seen as key to the human capacity for generalization in language. Recent work (Lake and Baroni, 2018) has studied systematic compositionality in modern seq2seq models using generalization to novel navigation instructions in a grounded environment as a probing tool. Lake and Baroni’s main experiment required the models to quickly bootstrap the meaning of new words. We extend this framework here to settings where the model needs only to recombine well-trained functional words (such as “around” and “right”) in novel contexts. Our findings confirm and strengthen the earlier ones: seq2seq models can be impressively good at generalizing to novel combinations of previously-seen input, but only when they receive extensive training on the specific pattern to be generalized (e.g., generalizing from many examples of “X around right” to “jump around right”), while failing when generalization requires novel application of compositional rules (e.g., inferring the meaning of “around right” from those of “right” and “around”).",
"title": ""
},
{
"docid": "e082b7792f72d54c63ed025ae5c7fa0f",
"text": "Cloud computing's pay-per-use model greatly reduces upfront cost and also enables on-demand scalability as service demand grows or shrinks. Hybrid clouds are an attractive option in terms of cost benefit, however, without proper elastic resource management, computational resources could be over-provisioned or under-provisioned, resulting in wasting money or failing to satisfy service demand. In this paper, to accomplish accurate performance prediction and cost-optimal resource management for hybrid clouds, we introduce Workload-tailored Elastic Compute Units (WECU) as a measure of computing resources analogous to Amazon EC2's ECUs, but customized for a specific workload. We present a dynamic programming-based scheduling algorithm to select a combination of private and public resources which satisfy a desired throughput. Using a loosely-coupled benchmark, we confirmed WECUs have 24 (J% better runtime prediction ability than ECUs on average. Moreover, simulation results with a real workload distribution of web service requests show that our WECU-based algorithm reduces costs by 8-31% compared to a fixed provisioning approach.",
"title": ""
},
{
"docid": "c7de7b159579b5c8668f2a072577322c",
"text": "This paper presents a method for effectively using unlabeled sequential data in the learning of hidden Markov models (HMMs). With the conventional approach, class labels for unlabeled data are assigned deterministically by HMMs learned from labeled data. Such labeling often becomes unreliable when the number of labeled data is small. We propose an extended Baum-Welch (EBW) algorithm in which the labeling is undertaken probabilistically and iteratively so that the labeled and unlabeled data likelihoods are improved. Unlike the conventional approach, the EBW algorithm guarantees convergence to a local maximum of the likelihood. Experimental results on gesture data and speech data show that when labeled training data are scarce, by using unlabeled data, the EBW algorithm improves the classification performance of HMMs more robustly than the conventional naive labeling (NL) approach. keywords Unlabeled data, sequential data, hidden Markov models, extended Baum-Welch algorithm.",
"title": ""
},
{
"docid": "bf4f90ff70dd8b195983f55bf3752718",
"text": "In this paper, we consider cooperative spectrum sensing based on energy detection in cognitive radio networks. Soft combination of the observed energy values from different cognitive radio users is investigated. Maximal ratio combination (MRC) is theoretically proved to be nearly optimal in low signal- to-noise ratio (SNR) region, an usual scenario in the context of cognitive radio. Both MRC and equal gain combination (EGC) exhibit significant performance improvement over conventional hard combination. Encouraged by the performance gain of soft combination, we propose a new softened hard combination scheme with two-bit overhead for each user and achieve a good tradeoff between detection performance and complexity. While traditionally energy detection suffers from an SNR wall caused by noise power uncertainty, it is shown in this paper that an SNR wall reduction can be achieved by employing cooperation among independent cognitive radio users.",
"title": ""
},
{
"docid": "cc04572df87def5dab42962ab42ce1f3",
"text": "Increasing the level of transparency in rehabilitation devices has been one of the main goals in robot-aided neurorehabilitation for the past two decades. This issue is particularly important to robotic structures that mimic the human counterpart's morphology and attach directly to the limb. Problems arise for complex joints such as the human wrist, which cannot be accurately matched with a traditional mechanical joint. In such cases, mechanical differences between human and robotic joint cause hyperstaticity (i.e. overconstraint) which, coupled with kinematic misalignments, leads to uncontrolled force/torque at the joint. This paper focuses on the prono-supination (PS) degree of freedom of the forearm. The overall force and torque in the wrist PS rotation is quantified by means of a wrist robot. A practical solution to avoid hyperstaticity and reduce the level of undesired force/torque in the wrist is presented, which is shown to reduce 75% of the force and 68% of the torque.",
"title": ""
},
{
"docid": "c999bd0903b53285c053c76f9fcc668f",
"text": "In this paper, a bibliographical review on reconfigurable (active) fault-tolerant control systems (FTCS) is presented. The existing approaches to fault detection and diagnosis (FDD) and fault-tolerant control (FTC) in a general framework of active fault-tolerant control systems (AFTCS) are considered and classified according to different criteria such as design methodologies and applications. A comparison of different approaches is briefly carried out. Focuses in the field on the current research are also addressed with emphasis on the practical application of the techniques. In total, 376 references in the open literature, dating back to 1971, are compiled to provide an overall picture of historical, current, and future developments in this area. # 2008 Elsevier Ltd. All rights reserved.",
"title": ""
},
{
"docid": "3d5165a30aac97d9548d19c907eed466",
"text": "A battery management system (BMS) based on the CAN-bus was designed for the Li-ion battery pack which consisted of many series-connected battery cells and was distributed dispersedly on the electric vehicle (EV). The BMS consisted of one master module and several sampling modules. The hardware design of the sampling circuit and the CAN expanding circuit was introduced. The strategies of the battery SOC (state of charge) estimation and the battery safety management were also presented.",
"title": ""
},
{
"docid": "3682143e9cfe7dd139138b3b533c8c25",
"text": "In brushless excitation systems, the rotating diodes can experience open- or short-circuits. For a three-phase synchronous generator under no-load, we present theoretical development of effects of diode failures on machine output voltage. Thereby, we expect the spectral response faced with each fault condition, and we propose an original algorithm for state monitoring of rotating diodes. Moreover, given experimental observations of the spectral behavior of stray flux, we propose an alternative technique. Laboratory tests have proven the effectiveness of the proposed methods for detection of fault diodes, even when the generator has been fully loaded. However, their ability to distinguish between cases of diodes interrupted and short-circuited, has been limited to the no-load condition, and certain loads of specific natures.",
"title": ""
},
{
"docid": "4a30caf967a8b8d6b4913043514ad99a",
"text": "Massive MIMO involves the use of large scale antenna arrays for high-gain adaptive beamforming and high-order spatial multiplexing. An important design challenge in Massive MIMO systems is the acquisition of channel state information at the transmit array, where accurate channel knowledge is critical for obtaining the best performance with Multi-User MIMO transmission on the downlink. In this paper, we explore the use of a product codebook feedback methodology for two-dimensional antenna arrays where the codebook feedback strategy is decomposed into two separate feedback processes, one for azimuth and one for elevation. We specifically address the case where the transmit array consists of cross-polarized antennas and show how two separate codebook feedback processes can reduce reference signal overhead and simplify the mobile complexity while providing significant gains in performance over existing LTE configurations.",
"title": ""
}
] |
scidocsrr
|
e52b7f030e81aeb694eb7ea53c4ab32c
|
Identification of embedded mathematical formulas in PDF documents using SVM
|
[
{
"docid": "c0d4f81bb55e1578f2a11dc712937a80",
"text": "Recognizing mathematical expressions in PDF documents is a new and important field in document analysis. It is quite different from extracting mathematical expressions in image-based documents. In this paper, we propose a novel method by combining rule-based and learning-based methods to detect both isolated and embedded mathematical expressions in PDF documents. Moreover, various features of formulas, including geometric layout, character and context content, are used to adapt to a wide range of formula types. Experimental results show satisfactory performance of the proposed method. Furthermore, the method has been successfully incorporated into a commercial software package for large-scale Chinese e-Book production.",
"title": ""
}
] |
[
{
"docid": "3e9845c255b5e816741c04c4f7cf5295",
"text": "This paper presents the packaging technology and the integrated antenna design for a miniaturized 122-GHz radar sensor. The package layout and the assembly process are shortly explained. Measurements of the antenna including the flip chip interconnect are presented that have been achieved by replacing the IC with a dummy chip that only contains a through-line. Afterwards, radiation pattern measurements are shown that were recorded using the radar sensor as transmitter. Finally, details of the fully integrated radar sensor are given, together with results of the first Doppler measurements.",
"title": ""
},
{
"docid": "7dcd4a4e687975b6b774487303fc1a40",
"text": "Analysis of kinship from facial images or videos is an important problem. Prior machine learning and computer vision studies approach kinship analysis as a verification or recognition task. In this paper, first time in the literature, we propose a kinship synthesis framework, which generates smile videos of (probable) children from the smile videos of parents. While the appearance of a child’s smile is learned using a convolutional encoder-decoder network, another neural network models the dynamics of the corresponding smile. The smile video of the estimated child is synthesized by the combined use of appearance and dynamics models. In order to validate our results, we perform kinship verification experiments using videos of real parents and estimated children generated by our framework. The results show that generated videos of children achieve higher correct verification rates than those of real children. Our results also indicate that the use of generated videos together with the real ones in the training of kinship verification models, increases the accuracy, suggesting that such videos can be used as a synthetic dataset.",
"title": ""
},
{
"docid": "bfa178f35027a55e8fd35d1c87789808",
"text": "We present a generative model for the unsupervised learning of dependency structures. We also describe the multiplicative combination of this dependency model with a model of linear constituency. The product model outperforms both components on their respective evaluation metrics, giving the best published figures for unsupervised dependency parsing and unsupervised constituency parsing. We also demonstrate that the combined model works and is robust cross-linguistically, being able to exploit either attachment or distributional reg ularities that are salient in the data.",
"title": ""
},
{
"docid": "f9b01c707482eebb9af472fd019f56eb",
"text": "In this paper we discuss the task of discovering topical influ ence within the online social network T WITTER. The main goal of this research is to discover who the influenti al users are with respect to a certain given topic. For this research we have sampled a portion of the T WIT ER social graph, from which we have distilled topics and topical activity, and constructed a se t of diverse features which we believe are useful in capturing the concept of topical influence. We will use sev eral correlation and classification techniques to determine which features perform best with respect to the TWITTER network. Our findings support the claim that only looking at simple popularity features such a s the number of followers is not enough to capture the concept of topical influence. It appears that mor e int icate features are required.",
"title": ""
},
{
"docid": "3d7b37c5328e3631bd8442e2de67fb62",
"text": "In recent years, deep neural networks have achieved great success in the field of computer vision. However, it is still a big challenge to deploy these deep models on resource-constrained embedded devices such as mobile robots, smart phones and so on. Therefore, network compression for such platforms is a reasonable solution to reduce memory consumption and computation complexity. In this paper, a novel channel pruning method based on genetic algorithm is proposed to compress very deep Convolution Neural Networks (CNNs). Firstly, a pre-trained CNN model is pruned layer by layer according to the sensitivity of each layer. After that, the pruned model is fine-tuned based on knowledge distillation framework. These two improvements significantly decrease the model redundancy with less accuracy drop. Channel selection is a combinatorial optimization problem that has exponential solution space. In order to accelerate the selection process, the proposed method formulates it as a search problem, which can be solved efficiently by genetic algorithm. Meanwhile, a two-step approximation fitness function is designed to further improve the efficiency of genetic process. The proposed method has been verified on three benchmark datasets with two popular CNN models: VGGNet and ResNet. On the CIFAR-100 and ImageNet datasets, our approach outperforms several state-of-the-art methods. On the CIFAR-10 and SVHN datasets, the pruned VGGNet achieves better performance than the original model with 8× parameters compression and 3× FLOPs reduction.",
"title": ""
},
{
"docid": "a1c917d7a685154060ddd67d631ea061",
"text": "In this paper, for finding the place of plate, a real time and fast method is expressed. In our suggested method, the image is taken to HSV color space; then, it is broken into blocks in a stable size. In frequent process, each block, in special pattern is probed. With the appearance of pattern, its neighboring blocks according to geometry of plate as a candidate are considered and increase blocks, are omitted. This operation is done for all of the uncontrolled blocks of images. First, all of the probable candidates are exploited; then, the place of plate is obtained among exploited candidates as density and geometry rate. In probing every block, only its lip pixel is studied which consists 23.44% of block area. From the features of suggestive method, we can mention the lack of use of expensive operation in image process and its low dynamic that it increases image process speed. This method is examined on the group of picture in background, distance and point of view. The rate of exploited plate reached at 99.33% and character recognition rate achieved 97%.",
"title": ""
},
{
"docid": "aa9450cdbdb1162015b4d931c32010fb",
"text": "The design of a low-cost rectenna for low-power applications is presented. The rectenna is designed with the use of analytical models and closed-form analytical expressions. This allows for a fast design of the rectenna system. To acquire a small-area rectenna, a layered design is proposed. Measurements indicate the validity range of the analytical models.",
"title": ""
},
{
"docid": "6fe413cf75a694217c30a9ef79fab589",
"text": "Zusammenfassung) Biometrics have been used for secure identification and authentication for more than two decades since biometric data is unique, non-transferable, unforgettable, and always with us. Recently, biometrics has pervaded other aspects of security applications that can be listed under the topic of “Biometric Cryptosystems”. Although the security of some of these systems is questionable when they are utilized alone, integration with other technologies such as digital signatures or Identity Based Encryption (IBE) schemes results in cryptographically secure applications of biometrics. It is exactly this field of biometric cryptosystems that we focused in this thesis. In particular, our goal is to design cryptographic protocols for biometrics in the framework of a realistic security model with a security reduction. Our protocols are designed for biometric based encryption, signature and remote authentication. We first analyze the recently introduced biometric remote authentication schemes designed according to the security model of Bringer et al.. In this model, we show that one can improve the database storage cost significantly by designing a new architecture, which is a two-factor authentication protocol. This construction is also secure against the new attacks we present, which disprove the claimed security of remote authentication schemes, in particular the ones requiring a secure sketch. Thus, we introduce a new notion called “Weak-identity Privacy” and propose a new construction by combining cancelable biometrics and distributed remote authentication in order to obtain a highly secure biometric authentication system. We continue our research on biometric remote authentication by analyzing the security issues of multi-factor biometric authentication (MFBA). We formally describe the security model for MFBA that captures simultaneous attacks against these systems and define the notion of user privacy, where the goal of the adversary is to impersonate a client to the server. We design a new protocol by combining bipartite biotokens, homomorphic encryption and zero-knowledge proofs and provide a security reduction to achieve user privacy. The main difference of this MFBA protocol is that the server-side computations are performed in the encrypted domain but without requiring a decryption key for the authentication decision of the server. Thus, leakage of the secret key of any system component does not affect the security of the scheme as opposed to the current biometric systems involving crypto-",
"title": ""
},
{
"docid": "7f09bdd6a0bcbed0d9525c5d20cf8cbb",
"text": "Distributed are increasing being thought of as a platform for decentralised applications — DApps — and the the focus for many is shifting from Bitcoin to Smart Contracts. It’s thought that encoding contracts and putting them “on the blockchain” will result in a new generation of organisations that are leaner and more efficient than their forebears (“Capps”?”), disrupting these forebears in the process. However, the most interesting aspect of Bitcoin and blockchain is that it involved no new technology, no new math. Their emergence was due to changes in the environment: the priceperformance and penetration of broadband networks reached a point that it was economically viable for a decentralised solution, such as Bitcoin to compete with traditional payment (international remittance) networks. This is combining with another trend — the shift from monolithic firms to multi-sided markets such as AirBnb et al and the rise of “platform businesses” — to enable a new class of solution to emerge. These new solutions enable firms to interact directly, without the need for a facilitator such as a market, exchange, or even a blockchain. In the past these facilitators were firms. More recently they have been “platform businesses.” In the future they may not exist at all. The shift to a distributed environment enables us to reconsider many of the ideas from distributed AI and linked data. Where are the opportunities? How can we avoid the mistakes of the past?",
"title": ""
},
{
"docid": "b82805187bdfd14a4dd5efc6faf70f10",
"text": "8 Cloud computing has gained tremendous popularity in recent years. By outsourcing computation and 9 storage requirements to public providers and paying for the services used, customers can relish upon the 10 advantages of this new paradigm. Cloud computing provides with a comparably lower-cost, scalable, a 11 location-independent platform for managing clients’ data. Compared to a traditional model of computing, 12 which uses dedicated in-house infrastructure, cloud computing provides unprecedented benefits regarding 13 cost and reliability. Cloud storage is a new cost-effective paradigm that aims at providing high 14 availability, reliability, massive scalability and data sharing. However, outsourcing data to a cloud service 15 provider introduces new challenges from the perspectives of data correctness and security. Over the years, 16 many data integrity schemes have been proposed for protecting outsourced data. This paper aims to 17 enhance the understanding of security issues associated with cloud storage and highlights the importance 18 of data integrity schemes for outsourced data. In this paper, we have presented a taxonomy of existing 19 data integrity schemes use for cloud storage. A comparative analysis of existing schemes is also provided 20 along with a detailed discussion on possible security attacks and their mitigations. Additionally, we have 21 discussed design challenges such as computational efficiency, storage efficiency, communication 22 efficiency, and reduced I/O in these schemes. Furthermore; we have highlighted future trends and open 23 issues, for future research in cloud storage security. 24",
"title": ""
},
{
"docid": "4e8d7e1fdb48da4198e21ae1ef2cd406",
"text": "This paper describes a procedure for the creation of large-scale video datasets for action classification and localization from unconstrained, realistic web data. The scalability of the proposed procedure is demonstrated by building a novel video benchmark, named SLAC (Sparsely Labeled ACtions), consisting of over 520K untrimmed videos and 1.75M clip annotations spanning 200 action categories. Using our proposed framework, annotating a clip takes merely 8.8 seconds on average. This represents a saving in labeling time of over 95% compared to the traditional procedure of manual trimming and localization of actions. Our approach dramatically reduces the amount of human labeling by automatically identifying hard clips, i.e., clips that contain coherent actions but lead to prediction disagreement between action classifiers. A human annotator can disambiguate whether such a clip truly contains the hypothesized action in a handful of seconds, thus generating labels for highly informative samples at little cost. We show that our large-scale dataset can be used to effectively pretrain action recognition models, significantly improving final metrics on smaller-scale benchmarks after fine-tuning. On Kinetics [14], UCF-101 [30] and HMDB-51 [15], models pre-trained on SLAC outperform baselines trained from scratch, by 2.0%, 20.1% and 35.4% in top-1 accuracy, respectively when RGB input is used. Furthermore, we introduce a simple procedure that leverages the sparse labels in SLAC to pre-train action localization models. On THUMOS14 [12] and ActivityNet-v1.3[2], our localization model improves the mAP of baseline model by 8.6% and 2.5%, respectively.",
"title": ""
},
{
"docid": "1db42d9d65737129fa08a6ad4d52d27e",
"text": "This study introduces a unique prototype system for structural health monitoring (SHM), SmartSync, which uses the building’s existing Internet backbone as a system of virtual instrumentation cables to permit modular and largely plug-and-play deployments. Within this framework, data streams from distributed heterogeneous sensors are pushed through network interfaces in real time and seamlessly synchronized and aggregated by a centralized server, which performs basic data acquisition, event triggering, and database management while also providing an interface for data visualization and analysis that can be securely accessed. The system enables a scalable approach to monitoring tall and complex structures that can readily interface a variety of sensors and data formats (analog and digital) and can even accommodate variable sampling rates. This study overviews the SmartSync system, its installation/operation in theworld’s tallest building, Burj Khalifa, and proof-of-concept in triggering under dual excitations (wind and earthquake).DOI: 10.1061/(ASCE)ST.1943-541X.0000560. © 2013 American Society of Civil Engineers. CE Database subject headings: High-rise buildings; Structural health monitoring; Wind loads; Earthquakes. Author keywords: Tall buildings; Structural health monitoring; System identification.",
"title": ""
},
{
"docid": "61ffc67f0e242afd8979d944cbe2bff4",
"text": "Diprosopus is a rare congenital malformation associated with high mortality. Here, we describe a patient with diprosopus, multiple life-threatening anomalies, and genetic mutations. Prenatal diagnosis and counseling made a beneficial impact on the family and medical providers in the care of this case.",
"title": ""
},
{
"docid": "34bf7fb014f5b511943526c28407cb4b",
"text": "Mobile devices can be maliciously exploited to violate the privacy of people. In most attack scenarios, the adversary takes the local or remote control of the mobile device, by leveraging a vulnerability of the system, hence sending back the collected information to some remote web service. In this paper, we consider a different adversary, who does not interact actively with the mobile device, but he is able to eavesdrop the network traffic of the device from the network side (e.g., controlling a Wi-Fi access point). The fact that the network traffic is often encrypted makes the attack even more challenging. In this paper, we investigate to what extent such an external attacker can identify the specific actions that a user is performing on her mobile apps. We design a system that achieves this goal using advanced machine learning techniques. We built a complete implementation of this system, and we also run a thorough set of experiments, which show that our attack can achieve accuracy and precision higher than 95%, for most of the considered actions. We compared our solution with the three state-of-the-art algorithms, and confirming that our system outperforms all these direct competitors.",
"title": ""
},
{
"docid": "0815549f210c57b28a7e2fc87c20f616",
"text": "Portable automatic seizure detection system is very convenient for epilepsy patients to carry. In order to make the system on-chip trainable with high efficiency and attain high detection accuracy, this paper presents a very large scale integration (VLSI) design based on the nonlinear support vector machine (SVM). The proposed design mainly consists of a feature extraction (FE) module and an SVM module. The FE module performs the three-level Daubechies discrete wavelet transform to fit the physiological bands of the electroencephalogram (EEG) signal and extracts the time–frequency domain features reflecting the nonstationary signal properties. The SVM module integrates the modified sequential minimal optimization algorithm with the table-driven-based Gaussian kernel to enable efficient on-chip learning. The presented design is verified on an Altera Cyclone II field-programmable gate array and tested using the two publicly available EEG datasets. Experiment results show that the designed VLSI system improves the detection accuracy and training efficiency.",
"title": ""
},
{
"docid": "ef584ca8b3e9a7f8335549927df1dc16",
"text": "Rapid evolution in technology and the internet brought us to the era of online services. E-commerce is nothing but trading goods or services online. Many customers share their good or bad opinions about products or services online nowadays. These opinions become a part of the decision-making process of consumer and make an impact on the business model of the provider. Also, understanding and considering reviews will help to gain the trust of the customer which will help to expand the business. Many users give reviews for the single product. Such thousands of review can be analyzed using big data effectively. The results can be presented in a convenient visual form for the non-technical user. Thus, the primary goal of research work is the classification of customer reviews given for the product in the map-reduce framework.",
"title": ""
},
{
"docid": "c2571f794304a6b0efdc4fe22bac89e5",
"text": "PURPOSE\nThe aim of this study was to analyse the psychometric properties of the Portuguese version of the body image scale (BIS; Hopwood, P., Fletcher, I., Lee, A., Al Ghazal, S., 2001. A body image scale for use with cancer patients. European Journal of Cancer, 37, 189-197). This is a brief and psychometric robust measure of body image for use with cancer patients, independently of age, cancer type, treatment or stage of the disease and it was developed in collaboration with the European Organization for Research and Treatment of Cancer (EORTC) Quality of Life Study Group.\n\n\nMETHOD\nThe sample is comprised of 173 Portuguese postoperative breast cancer patients that completed a battery of measures that included the BIS and other scales of body image and quality of life, in order to explore its construct validity.\n\n\nRESULTS\nThe Portuguese version of BIS confirmed the original unidimensional structure and demonstrated adequate internal consistency, both in the global sample (alpha=.93) as in surgical subgroups (mastectomy=.92 and breast-conserving surgery=.93). Evidence for the construct validity was provided through moderate to largely sized correlations between the BIS and other related measures. In further support of its discriminant validity, significant differences in BIS scores were found between women who underwent mastectomy and those who underwent breast-conserving surgery, with the former presenting higher scores. Age and time since diagnosis were not associated with BIS scores.\n\n\nCONCLUSIONS\nThe Portuguese BIS proved to be a reliable and valid measure of body image concerns in a sample of breast cancer patients, allowing a brief and comprehensive assessment, both on clinical and research settings.",
"title": ""
},
{
"docid": "ed65e73d6e78f44390d1734bfad77b54",
"text": "Frequency overlap across wireless networks with different radio technologies can cause severe interference and reduce communication reliability. The circumstances are particularly unfavorable for ZigBee networks that share the 2.4 GHz ISM band with WiFi senders capable of 10 to 100 times higher transmission power. Our work first examines the interference patterns between ZigBee and WiFi networks at the bit-level granularity. Under certain conditions, ZigBee activities can trigger a nearby WiFi transmitter to back off, in which case the header is often the only part of the Zig-Bee packet being corrupted. We call this the symmetric interference regions, in comparison to the asymmetric regions where the ZigBee signal is too weak to be detected by WiFi senders, but WiFi activity can uniformly corrupt any bit in a ZigBee packet. With these observations, we design BuzzBuzz to mitigate WiFi interference through header and payload redundancy. Multi-Headers provides header redundancy giving ZigBee nodes multiple opportunities to detect incoming packets. Then, TinyRS, a full-featured Reed Solomon library for resource-constrained devices, helps decoding polluted packet payload. On a medium-sized testbed, BuzzBuzz improves the ZigBee network delivery rate by 70%. Furthermore, BuzzBuzz reduces ZigBee retransmissions by a factor of three, which increases the WiFi throughput by 10%.",
"title": ""
},
{
"docid": "db6633228791ca2c725a804f3e58252e",
"text": "Developments and new advances in medical technology and the improvement of people’s living standards have helped to make many people healthier. However, there are still large design deficiencies due to the imbalanced distribution of medical resources, especially in developing countries. To address this issue, a video conference-based telemedicine system is deployed to break the limitations of medical resources in terms of time and space. By outsourcing medical resources from big hospitals to rural and remote ones, centralized and high quality medical resources can be shared to achieve a higher salvage rate while improving the utilization of medical resources. Though effective, existing telemedicine systems only treat patients’ physiological diseases, leaving another challenging problem unsolved: How to remotely detect patients’ emotional state to diagnose psychological diseases. In this paper, we propose a novel healthcare system based on a 5G Cognitive System (5G-Csys). The 5G-Csys consists of a resource cognitive engine and a data cognitive engine. Resource cognitive intelligence, based on the learning of network contexts, aims at ultra-low latency and ultra-high reliability for cognitive applications. Data cognitive intelligence, based on the analysis of healthcare big data, is used to handle a patient’s health status physiologically and psychologically. In this paper, the architecture of 5G-Csys is first presented, and then the key technologies and application scenarios are discussed. To verify our proposal, we develop a prototype platform of 5G-Csys, incorporating speech emotion recognition. We present our experimental results to demonstrate the effectiveness of the proposed system. We hope this paper will attract further research in the field of healthcare based on 5G cognitive systems.",
"title": ""
}
] |
scidocsrr
|
66f65d037d045dcdfd9347297b45ef8e
|
Application of knowledge-based approaches in software architecture: A systematic mapping study
|
[
{
"docid": "ca6b556eb4de9a8f66aefd5505c20f3d",
"text": "Knowledge is a broad and abstract notion that has defined epistemological debate in western philosophy since the classical Greek era. In the past Richard Watson was the accepting senior editor for this paper. MISQ Review articles survey, conceptualize, and synthesize prior MIS research and set directions for future research. For more details see http://www.misq.org/misreview/announce.html few years, however, there has been a growing interest in treating knowledge as a significant organizational resource. Consistent with the interest in organizational knowledge and knowledge management (KM), IS researchers have begun promoting a class of information systems, referred to as knowledge management systems (KMS). The objective of KMS is to support creation, transfer, and application of knowledge in organizations. Knowledge and knowledge management are complex and multi-faceted concepts. Thus, effective development and implementation of KMS requires a foundation in several rich",
"title": ""
}
] |
[
{
"docid": "44b71e1429f731cc2d91f919182f95a4",
"text": "Power management of multi-core processors is extremely important because it allows power/energy savings when all cores are not used. OS directed power management according to ACPI (Advanced Power and Configurations Interface) specifications is the common approach that industry has adopted for this purpose. While operating systems are capable of such power management, heuristics for effectively managing the power are still evolving. The granularity at which the cores are slowed down/turned off should be designed considering the phase behavior of the workloads. Using 3-D, video creation, office and e-learning applications from the SYSmark benchmark suite, we study the challenges in power management of a multi-core processor such as the AMD Quad-Core Opteron\" and Phenom\". We unveil effects of the idle core frequency on the performance and power of the active cores. We adjust the idle core frequency to have the least detrimental effect on the active core performance. We present optimized hardware and operating system configurations that reduce average active power by 30% while reducing performance by an average of less than 3%. We also present complete system measurements and power breakdown between the various systems components using the SYSmark and SPEC CPU workloads. It is observed that the processor core and the disk consume the most power, with core having the highest variability.",
"title": ""
},
{
"docid": "073e3296fc2976f0db2f18a06b0cb816",
"text": "Nowadays spoofing detection is one of the priority research areas in the field of automatic speaker verification. The success of Automatic Speaker Verification Spoofing and Countermeasures (ASVspoof) Challenge 2015 confirmed the impressive perspective in detection of unforeseen spoofing trials based on speech synthesis and voice conversion techniques. However, there is a small number of researches addressed to replay spoofing attacks which are more likely to be used by non-professional impersonators. This paper describes the Speech Technology Center (STC) anti-spoofing system submitted for ASVspoof 2017 which is focused on replay attacks detection. Here we investigate the efficiency of a deep learning approach for solution of the mentioned-above task. Experimental results obtained on the Challenge corpora demonstrate that the selected approach outperforms current state-of-the-art baseline systems in terms of spoofing detection quality. Our primary system produced an EER of 6.73% on the evaluation part of the corpora which is 72% relative improvement over the ASVspoof 2017 baseline system.",
"title": ""
},
{
"docid": "bfa2f3edf0bd1c27bfe3ab90dde6fd75",
"text": "Sophorolipids are biosurfactants belonging to the class of the glycolipid, produced mainly by the osmophilic yeast Candida bombicola. Structurally they are composed by a disaccharide sophorose (2’-O-β-D-glucopyranosyl-β-D-glycopyranose) which is linked β -glycosidically to a long fatty acid chain with generally 16 to 18 atoms of carbon with one or more unsaturation. They are produced as a complex mix containing up to 40 molecules and associated isomers, depending on the species which produces it, the substrate used and the culture conditions. They present properties which are very similar or superior to the synthetic surfactants and other biosurfactants with the advantage of presenting low toxicity, higher biodegradability, better environmental compatibility, high selectivity and specific activity in a broad range of temperature, pH and salinity conditions. Its biological activities are directly related with its chemical structure. Sophorolipids possess a great potential for application in areas such as: food; bioremediation; cosmetics; pharmaceutical; biomedicine; nanotechnology and enhanced oil recovery.",
"title": ""
},
{
"docid": "4f84d3a504cf7b004a414346bb19fa94",
"text": "Abstract—The electric power supplied by a photovoltaic power generation systems depends on the solar irradiation and temperature. The PV system can supply the maximum power to the load at a particular operating point which is generally called as maximum power point (MPP), at which the entire PV system operates with maximum efficiency and produces its maximum power. Hence, a Maximum power point tracking (MPPT) methods are used to maximize the PV array output power by tracking continuously the maximum power point. The proposed MPPT controller is designed for 10kW solar PV system installed at Cape Institute of Technology. This paper presents the fuzzy logic based MPPT algorithm. However, instead of one type of membership function, different structures of fuzzy membership functions are used in the FLC design. The proposed controller is combined with the system and the results are obtained for each membership functions in Matlab/Simulink environment. Simulation results are decided that which membership function is more suitable for this system.",
"title": ""
},
{
"docid": "2bbbd2d1accca21cdb614a0324aa1a0d",
"text": "We propose a novel direct visual-inertial odometry method for stereo cameras. Camera pose, velocity and IMU biases are simultaneously estimated by minimizing a combined photometric and inertial energy functional. This allows us to exploit the complementary nature of vision and inertial data. At the same time, and in contrast to all existing visual-inertial methods, our approach is fully direct: geometry is estimated in the form of semi-dense depth maps instead of manually designed sparse keypoints. Depth information is obtained both from static stereo - relating the fixed-baseline images of the stereo camera - and temporal stereo - relating images from the same camera, taken at different points in time. We show that our method outperforms not only vision-only or loosely coupled approaches, but also can achieve more accurate results than state-of-the-art keypoint-based methods on different datasets, including rapid motion and significant illumination changes. In addition, our method provides high-fidelity semi-dense, metric reconstructions of the environment, and runs in real-time on a CPU.",
"title": ""
},
{
"docid": "86bdb6616629da9c2574dc722b003ccf",
"text": "This paper considers the problem of extending Training an Agent Manually via Evaluative Reinforcement (TAMER) in continuous state and action spaces. Investigative research using the TAMER framework enables a non-technical human to train an agent through a natural form of human feedback (negative or positive). The advantages of TAMER have been shown on tasks of training agents by only human feedback or combining human feedback with environment rewards. However, these methods are originally designed for discrete state-action, or continuous state-discrete action problems. This paper proposes an extension of TAMER to allow both continuous states and actions, called ACTAMER. The new framework utilizes any general function approximation of a human trainer’s feedback signal. Moreover, a combined capability of ACTAMER and reinforcement learning is also investigated and evaluated. The combination of human feedback and reinforcement learning is studied in both settings: sequential and simultaneous. Our experimental results demonstrate the proposed method successfully allowing a human to train an agent in two continuous state-action domains: Mountain Car and Cart-pole (balancing).",
"title": ""
},
{
"docid": "35b64e16a8a86ddbee49177f75a662fd",
"text": "Large scale, multidisciplinary, engineering designs are always difficult due to the complexity and dimensionality of these problems. Direct coupling between the analysis codes and the optimization routines can be prohibitively time consuming due to the complexity of the underlying simulation codes. One way of tackling this problem is by constructing computationally cheap(er) approximations of the expensive simulations that mimic the behavior of the simulation model as closely as possible. This paper presents a data driven, surrogate-based optimization algorithm that uses a trust region-based sequential approximate optimization (SAO) framework and a statistical sampling approach based on design of experiment (DOE) arrays. The algorithm is implemented using techniques from two packages—SURFPACK and SHEPPACK that provide a collection of approximation algorithms to build the surrogates and three different DOE techniques—full factorial (FF), Latin hypercube sampling, and central composite design—are used to train the surrogates. The results are compared with the optimization results obtained by directly coupling an optimizer with the simulation code. The biggest concern in using the SAO framework based on statistical sampling is the generation of the required database. As the number of design variables grows, the computational cost of generating the required database grows rapidly. A data driven approach is proposed to tackle this situation, where the trick is to run the expensive simulation if and only if a nearby data point does not exist in the cumulatively growing database. Over time the database matures and is enriched as more and more optimizations are performed. Results show that the proposed methodology dramatically reduces the total number of calls to the expensive simulation runs during the optimization process.",
"title": ""
},
{
"docid": "a61c1e5c1eafd5efd8ee7021613cf90d",
"text": "A millimeter-wave (mmW) bandpass filter (BPF) using substrate integrated waveguide (SIW) is proposed in this work. A BPF with three resonators is formed by etching slots on the top metal plane of the single SIW cavity. The filter is investigated with the theory of electric coupling mechanism. The design procedure and design curves of the coupling coefficient (K) and quality factor (Q) are given and discussed here. The extracted K and Q are used to determine the filter circuit dimensions. In order to prove the validity, a SIW BPF operating at 140 GHz is fabricated in a single circuit layer using low temperature co-fired ceramic (LTCC) technology. The measured insertion loss is 1.913 dB at 140 GHz with a fractional bandwidth of 13.03%. The measured results are in good agreement with simulated results in such high frequency.",
"title": ""
},
{
"docid": "a58cbbff744568ae7abd2873d04d48e9",
"text": "Training real-world Deep Neural Networks (DNNs) can take an eon (i.e., weeks or months) without leveraging distributed systems. Even distributed training takes inordinate time, of which a large fraction is spent in communicating weights and gradients over the network. State-of-the-art distributed training algorithms use a hierarchy of worker-aggregator nodes. The aggregators repeatedly receive gradient updates from their allocated group of the workers, and send back the updated weights. This paper sets out to reduce this significant communication cost by embedding data compression accelerators in the Network Interface Cards (NICs). To maximize the benefits of in-network acceleration, the proposed solution, named INCEPTIONN (In-Network Computing to Exchange and Process Training Information Of Neural Networks), uniquely combines hardware and algorithmic innovations by exploiting the following three observations. (1) Gradients are significantly more tolerant to precision loss than weights and as such lend themselves better to aggressive compression without the need for the complex mechanisms to avert any loss. (2) The existing training algorithms only communicate gradients in one leg of the communication, which reduces the opportunities for in-network acceleration of compression. (3) The aggregators can become a bottleneck with compression as they need to compress/decompress multiple streams from their allocated worker group. To this end, we first propose a lightweight and hardware-friendly lossy-compression algorithm for floating-point gradients, which exploits their unique value characteristics. This compression not only enables significantly reducing the gradient communication with practically no loss of accuracy, but also comes with low complexity for direct implementation as a hardware block in the NIC. To maximize the opportunities for compression and avoid the bottleneck at aggregators, we also propose an aggregator-free training algorithm that exchanges gradients in both legs of communication in the group, while the workers collectively perform the aggregation in a distributed manner. Without changing the mathematics of training, this algorithm leverages the associative property of the aggregation operator and enables our in-network accelerators to (1) apply compression for all communications, and (2) prevent the aggregator nodes from becoming bottlenecks. Our experiments demonstrate that INCEPTIONN reduces the communication time by 70.9~80.7% and offers 2.2~3.1x speedup over the conventional training system, while achieving the same level of accuracy.",
"title": ""
},
{
"docid": "758eb7a0429ee116f7de7d53e19b3e02",
"text": "With the rapid development of the Internet, many types of websites have been developed. This variety of websites makes it necessary to adopt systemized evaluation criteria with a strong theoretical basis. This study proposes a set of evaluation criteria derived from an architectural perspective which has been used for over a 1000 years in the evaluation of buildings. The six evaluation criteria are internal reliability and external security for structural robustness, useful content and usable navigation for functional utility, and system interface and communication interface for aesthetic appeal. The impacts of the six criteria on user satisfaction and loyalty have been investigated through a large-scale survey. The study results indicate that the six criteria have different impacts on user satisfaction for different types of websites, which can be classified along two dimensions: users’ goals and users’ activity levels.",
"title": ""
},
{
"docid": "fdfcf2f910884bf899623d2711386db2",
"text": "A number of vehicles may be controlled and supervised by traffic security and its management. The License Plate Recognition is broadly employed in traffic management to recognize a vehicle whose owner has despoiled traffic laws or to find stolen vehicles. Vehicle License Plate Detection and Recognition is a key technique in most of the traffic related applications such as searching of stolen vehicles, road traffic monitoring, airport gate monitoring, speed monitoring and automatic parking lots access control. It is simply the ability of automatically extract and recognition of the vehicle license number plate's character from a captured image. Number Plate Recognition method suffered from problem of feature selection process. The current method of number plate recognition system only focus on local, global and Neural Network process of Feature Extraction and process for detection. The Optimized Feature Selection process improves the detection ratio of number plate recognition. In this paper, it is proposed a new methodology for `License Plate Recognition' based on wavelet transform function. This proposed methodology compare with Correlation based method for detection of number plate. Empirical result shows that better performance in comparison of correlation based technique for number plate recognition. Here, it is modified the Matching Technique for numberplate recognition by using Multi-Class RBF Neural Network Optimization.",
"title": ""
},
{
"docid": "fde0b02f0dbf01cd6a20b02a44cdc6cf",
"text": "This paper presents a process for capturing spatially and directionally varying illumination from a real-world scene and using this lighting to illuminate computer-generated objects. We use two devices for capturing such illumination. In the first we photograph an array of mirrored spheres in high dynamic range to capture the spatially varying illumination. In the second, we obtain higher resolution data by capturing images with an high dynamic range omnidirectional camera as it traverses across a plane. For both methods we apply the light field technique to extrapolate the incident illumination to a volume. We render computer-generated objects as illuminated by this captured illumination using a custom shader within an existing global illumination rendering system. To demonstrate our technique we capture several spatially-varying lighting environments with spotlights, shadows, and dappled lighting and use them to illuminate synthetic scenes. We also show comparisons to real objects under the same illumination.",
"title": ""
},
{
"docid": "1ad92c6656e89a40b0a376f8c1693760",
"text": "This paper presents an overview of our work towards building socially intelligent, cooperative humanoid robots that can work and learn in partnership with people. People understand each other in social terms, allowing them to engage others in a variety of complex social interactions including communication, social learning, and cooperation. We present our theoretical framework that is a novel combination of Joint Intention Theory and Situated Learning Theory and demonstrate how this framework can be applied to develop our sociable humanoid robot, Leonardo. We demonstrate the robot’s ability to learn quickly and effectively from natural human instruction using gesture and dialog, and then cooperate to perform a learned task jointly with a person. Such issues must be addressed to enable many new and exciting applications for robots that require them to play a long-term role in people’s daily lives.",
"title": ""
},
{
"docid": "5c76caebe05acd7d09e6cace0cac9fe1",
"text": "A program that detects people in images has a multitude of potential applications, including tracking for biomedical applications or surveillance, activity recognition for person-device interfaces (device control, video games), organizing personal picture collections, and much more. However, detecting people is difficult, as the appearance of a person can vary enormously because of changes in viewpoint or lighting, clothing style, body pose, individual traits, occlusion, and more. It then makes sense that the first people detectors were really detectors of pedestrians, that is, people walking at a measured pace on a sidewalk, and viewed from a fixed camera. Pedestrians are nearly always upright, their arms are mostly held along the body, and proper camera placement relative to pedestrian traffic can virtually ensure a view from the front or from behind (Figure 1). These factors reduce variation of appearance, although clothing, illumination, background, occlusions, and somewhat limited variations of pose still present very significant challenges.",
"title": ""
},
{
"docid": "b4ae619b0b9cc966622feb2dceda0f2e",
"text": "A novel pressure sensing circuit for non-invasive RF/microwave blood glucose sensors is presented in this paper. RF sensors are of interest to researchers for measuring blood glucose levels non-invasively. For the measurements, the finger is a popular site that has a good amount of blood supply. When a finger is placed on top of the RF sensor, the electromagnetic fields radiating from the sensor interact with the blood in the finger and the resulting sensor response depends on the permittivity of the blood. The varying glucose level in the blood results in a permittivity change causing a shift in the sensor's response. Therefore, by observing the sensor's frequency response it may be possible to predict the blood glucose level. However, there are two crucial points in taking and subsequently predicting the blood glucose level. These points are; the position of the finger on the sensor and the pressure applied onto the sensor. A variation in the glucose level causes a very small frequency shift. However, finger positioning and applying inconsistent pressure have more pronounced effect on the sensor response. For this reason, it may not be possible to take a correct reading if these effects are not considered carefully. Two novel pressure sensing circuits are proposed and presented in this paper to accurately monitor the pressure applied.",
"title": ""
},
{
"docid": "855f67a94e8425846584e5c82355fa91",
"text": "This paper is the product of a workshop held in Amsterdam during the Software Technology and Practice Conference (STEP 2003). The purpose of the paper is to propose Bloom's taxonomy levels for the Guide to the Software Engineering Body of Knowledge (SWEBOK) topics for three software engineer profiles: a new graduate, a graduate with four years of experience, and an experienced member of a software engineering process group. Bloom's taxonomy levels are proposed for topics of four knowledge areas of the SWEBOK Guide: software maintenance, software engineering management, software engineering process, and software quality. By proposing Bloom's taxonomy in this way, the paper aims to illustrate how such profiles could be used as a tool in defining job descriptions, software engineering role descriptions within a software engineering process definition, professional development paths, and training programs.",
"title": ""
},
{
"docid": "a7c0bdbf05ce5d8da20a80dcc3bfaec0",
"text": "Neurosurgery is a medical specialty that relies heavily on imaging. The use of computed tomography and magnetic resonance images during preoperative planning and intraoperative surgical navigation is vital to the success of the surgery and positive patient outcome. Augmented reality application in neurosurgery has the potential to revolutionize and change the way neurosurgeons plan and perform surgical procedures in the future. Augmented reality technology is currently commercially available for neurosurgery for simulation and training. However, the use of augmented reality in the clinical setting is still in its infancy. Researchers are now testing augmented reality system prototypes to determine and address the barriers and limitations of the technology before it can be widely accepted and used in the clinical setting.",
"title": ""
},
{
"docid": "3a2729b235884bddc05dbdcb6a1c8fc9",
"text": "The people of Tumaco-La Tolita culture inhabited the borders of present-day Colombia and Ecuador. Already extinct by the time of the Spaniards arrival, they left a huge collection of pottery artifacts depicting everyday life; among these, disease representations were frequently crafted. In this article, we present the results of the personal examination of the largest collections of Tumaco-La Tolita pottery in Colombia and Ecuador; cases of Down syndrome, achondroplasia, mucopolysaccharidosis I H, mucopolysaccharidosis IV, a tumor of the face and a benign tumor in an old woman were found. We believe these to be among the earliest artistic representations of disease.",
"title": ""
},
{
"docid": "28c0ce094c4117157a27f272dbb94b91",
"text": "This paper reports the design of a color dynamic and active-pixel vision sensor (C-DAVIS) for robotic vision applications. The C-DAVIS combines monochrome eventgenerating dynamic vision sensor pixels and 5-transistor active pixels sensor (APS) pixels patterned with an RGBW color filter array. The C-DAVIS concurrently outputs rolling or global shutter RGBW coded VGA resolution frames and asynchronous monochrome QVGA resolution temporal contrast events. Hence the C-DAVIS is able to capture spatial details with color and track movements with high temporal resolution while keeping the data output sparse and fast. The C-DAVIS chip is fabricated in TowerJazz 0.18um CMOS image sensor technology. An RGBW 2×2-pixel unit measures 20um × 20um. The chip die measures 8mm × 6.2mm.",
"title": ""
},
{
"docid": "d50d3997572847200f12d69f61224760",
"text": "The main function of a network layer is to route packets from the source machine to the destination machine. Algorithms that are used for route selection and data structure are the main parts for the network layer. In this paper we examine the network performance when using three routing protocols, RIP, OSPF and EIGRP. Video, HTTP and Voice application where configured for network transfer. We also examine the behaviour when using link failure/recovery controller between network nodes. The simulation results are analyzed, with a comparison between these protocols on the effectiveness and performance in network implemented.",
"title": ""
}
] |
scidocsrr
|
4076916a92949d38f50ddaa1cf48356c
|
Experiments with Convolutional Neural Network Models for Answer Selection
|
[
{
"docid": "87f0a390580c452d77fcfc7040352832",
"text": "• J. Wieting, M. Bansal, K. Gimpel, K. Livescu, and D. Roth. 2015. From paraphrase database to compositional paraphrase model and back. TACL. • K. S. Tai, R. Socher, and C. D. Manning. 2015. Improved semantic representations from treestructured long short-term memory networks. ACL. • W. Yin and H. Schutze. 2015. Convolutional neural network for paraphrase identification. NAACL. The product also streams internet radio and comes with a 30-day free trial for realnetworks' rhapsody music subscription. The device plays internet radio streams and comes with a 30-day trial of realnetworks rhapsody music service. Given two sentences, measure their similarity:",
"title": ""
},
{
"docid": "87e315548e67f8de46ad0cb3db8b7aaa",
"text": "We study answer selection for question answering, in which given a question and a set of candidate answer sentences, the goal is to identify the subset that contains the answer. Unlike previous work which treats this task as a straightforward pointwise classification problem, we model this problem as a ranking task and propose a pairwise ranking approach that can directly exploit existing pointwise neural network models as base components. We extend the Noise-Contrastive Estimation approach with a triplet ranking loss function to exploit interactions in triplet inputs over the question paired with positive and negative examples. Experiments on TrecQA and WikiQA datasets show that our approach achieves state-of-the-art effectiveness without the need for external knowledge sources or feature engineering.",
"title": ""
}
] |
[
{
"docid": "a8d4d352a8958628ee98ccf950e2ef2d",
"text": "This study presents a methodology that will produce a viable fault surrogate. The focus of the effort is on the precise measurement of software development process and product outcomes. Tools and processes for the static measurement of the source code have been installed and made operational in a large embedded software system. Source code measurements have been gathered unobtrusively for each build in the software evolution process. The measurements are synthesized to obtain the fault surrogate. The complexity of sequential builds is compared and a new measure, code churn, is calculated. This paper will demonstrate the effectiveness of code complexity churn by validating it against the testing problem reports.",
"title": ""
},
{
"docid": "9d296a940714bda3ec2731438496f150",
"text": "A common approach in positive-unlabeled learning is to train a classification model between labeled and unlabeled data. This strategy is in fact known to give an optimal classifier under mild conditions; however, it results in biased empirical estimates of the classifier performance. In this work, we show that the typically used performance measures such as the receiver operating characteristic curve, or the precisionrecall curve obtained on such data can be corrected with the knowledge of class priors; i.e., the proportions of the positive and negative examples in the unlabeled data. We extend the results to a noisy setting where some of the examples labeled positive are in fact negative and show that the correction also requires the knowledge of the proportion of noisy examples in the labeled positives. Using state-of-the-art algorithms to estimate the positive class prior and the proportion of noise, we experimentally evaluate two correction approaches and demonstrate their efficacy on real-life data. Introduction Performance estimation in binary classification is tightly related to the nature of the classification task. As a result, different performance measures may be directly optimized during training. When (mis)classification costs are available, the classifier is ideally trained and evaluated in a costsensitive mode to minimize the expected cost (Whalen 1971; Elkan 2001). More often, however, classification costs are unknown and the overall performance is assessed by averaging the performance over a range of classification modes. The most extensively studied and widely used performance evaluation in binary classification involves estimating the Receiver Operating Characteristic (ROC) curve that plots the true positive rate of a classifier as a function of its false positive rate (Fawcett 2006). The ROC curve provides insight into trade-offs between the classifier’s accuracies on positive versus negative examples over a range of decision thresholds. Furthermore, the area under the ROC curve (AUC) has a meaningful probabilistic interpretation that correlates with the ability of the classifier to separate classes and is often used to rank classifiers (Hanley and McNeil 1982). Another important performance criterion generally used in information retrieval relies on the precision-recall Copyright c © 2017, Association for the Advancement of Artificial Intelligence (www.aaai.org). All rights reserved. (pr-rc) curve, a plot of precision as a function of recall. The precision-recall evaluation, including summary statistics derived from the pr-rc curve, may be preferred to ROC curves when classes are heavily skewed (Davis and Goadrich 2006). Although model learning and performance evaluation in a supervised setting are well understood (Hastie et al. 2001), the availability of unlabeled data gives additional options and also presents new challenges. A typical semi-supervised scenario involves the availability of positive, negative and (large quantities of) unlabeled data. Here, the unlabeled data can be used to improve training (Blum and Mitchell 1998) or unbias the labeled data (Cortes et al. 2008); e.g., to estimate class proportions that are necessary to calibrate the model and accurately estimate precision when class balances (but not class-conditional distributions) in labeled data are not representative (Saerens et al. 2002). This is often the case when it is more expensive or difficult to label examples of one class than the examples of the other. A special case of the semi-supervised setting arises when the examples of only one class are labeled. It includes open-world domains such as molecular biology where, for example, wet lab experiments determining a protein’s activity are generally conclusive; however, the absence of evidence about a protein’s function cannot be interpreted as the evidence of absence. This is because, even when the labeling is attempted, a functional assay may not lead to the desired activity for a number of experimental reasons. In other domains, such as social networks, only positive examples can be collected (such as ‘liking’ a particular product) because, by design, the negative labeling is not allowed. The development of classification models in this setting is often referred to as positiveunlabeled learning (Denis et al. 2005). State-of-the-art techniques in positive-unlabeled learning tackle this problem by treating the unlabeled sample as negatives and training a classifier to distinguish between labeled (positive) and unlabeled examples. Following Elkan and Noto (2008), we refer to the classifiers trained on a labeled sample from the true distribution of inputs, containing both positive and negative examples, as traditional classifiers. Similarly, we refer to the classifiers trained on the labeled versus unlabeled data as non-traditional classifiers. In theory, the true performance of both traditional and non-traditional classifiers can be evaluated on a labeled sample from the true distribution (traditional evaluation). However, this is infeasible for non-traditional learners because such a sample is not available in positive-unlabeled learning. As a result, the non-traditional classifiers are evaluated by using the unlabeled sample as substitute for labeled negatives (non-traditional evaluation). Surprisingly, for a variety of performance criteria, non-traditional classifiers achieve similar performance under traditional evaluation as optimal traditional classifiers (Blanchard et al. 2010; Menon et al. 2015). The intuition for these results comes from the fact that in many practical situations, the posterior distributions in traditional and non-traditional setting provide the same optimal ranking of data points on a given test sample (Jain et al. 2016; Jain, White, and Radivojac 2016). Furthermore, the widely-accepted evaluation approaches using ROC or pr-rc curves are insensitive to the variation of raw prediction scores unless they affect the ranking. Though the efficacy of non-traditional classifiers has been thoroughly studied (Peng et al. 2003; Elkan and Noto 2008; Ward et al. 2009; Menon et al. 2015), estimating their true performance has been much less explored. Such performance estimation often involves computing the fraction(s) of correctly and incorrectly classified examples from both classes; however, in absence of labeled negatives, the fractions computed under the non-traditional evaluation are incorrect, resulting in biased estimates. Figure 1 illustrates the effect of this bias by showing the traditional and nontraditional ROC curves on a handmade data set. Because some of the unlabeled examples in the training set are in fact positive, the area under the ROC curve estimated when the unlabeled examples were considered negative (nontraditional setting) underestimates the true performance for positive versus negative classification (traditional setting). This paper formalizes and evaluates performance estimation of a non-traditional classifier in the traditional setting when the only available training data are (possibly noisy) positive examples and unlabeled data. We show that the true (traditional) performance of such a classifier can be recovered with the knowledge of class priors and the fraction of mislabeled examples in the positive set. We derive formulas for converting the ROC and pr-rc curves from the nontraditional to the traditional setting. Using these recovery formulas, we present methods to estimate true classification performance. Our experiments provide evidence that the methods for the recovery of a classifier’s performance are sound and effective. Problem formulation Consider a binary classification problem from input x ∈ X to output y ∈ Y = {0, 1} in a positive-unlabeled setting. Let f be the true distribution over the input space X from which the unlabeled sample is drawn and let f1 and f0 be the distributions of the positive and negative examples, respectively. It follows that f can be expressed as a two-component mixture containing f1 and f0 as f(x) = αf1(x) + (1− α)f0(x), for all x ∈ X where α ∈ [0, 1) is the mixing proportion (positive class prior) giving the proportion of positives in f . ́ ́ ° ° AUC = 0.8000 AUC = 0.9375 B. Positive vs. unlabeled A. Data set: prediction scores and class labels C. Positive vs. negative 0.986 yes, as 1 0.943 no 0.863 yes, as 1 0.789 no 0.009 no 0.699 yes, as 1 0.473 no 0.211 no 1 1 1 0 1 0 0 0 Prediction Labeled True class label",
"title": ""
},
{
"docid": "00b2befc6cfa60d0d7799673de232461",
"text": "During the last decade, various machine learning and data mining techniques have been applied to Intrusion Detection Systems (IDSs) which have played an important role in defending critical computer systems and networks from cyber attacks. Unsupervised anomaly detection techniques have received a particularly great amount of attention because they enable construction of intrusion detection models without using labeled training data (i.e., with instances preclassified as being or not being an attack) in an automated manner and offer intrinsic ability to detect unknown attacks; i.e., 0-day attacks. Despite the advantages, it is still not easy to deploy them into a real network environment because they require several parameters during their building process, and thus IDS operators and managers suffer from tuning and optimizing the required parameters based on changes of their network characteristics. In this paper, we propose a new anomaly detection method by which we can automatically tune and optimize the values of parameters without predefining them. We evaluated the proposed method over real traffic data obtained from Kyoto University honeypots. The experimental results show that the performance of the proposed method is superior to that of the previous one. 2011 Elsevier Inc. All rights reserved.",
"title": ""
},
{
"docid": "59181c685b748c0c54bb0e255b197a1f",
"text": "While social media has become an empowering agent to individual voices and freedom of expression, it also facilitates anti-social behaviors including online harassment, cyberbullying, and hate speech. In this paper, we present the first comparative study of hate speech instigators and target users on Twitter. Through a multi-step classification process, we curate a comprehensive hate speech dataset capturing various types of hate. We study the distinctive characteristics of hate instigators and targets in terms of their profile selfpresentation, activities, and online visibility. We find that hate instigators target more popular and high profile Twitter users, and that participating in hate speech can result in greater online visibility. We conduct a personality analysis of hate instigators and targets and show that both groups have eccentric personality facets that differ from the general Twitter population. Our results advance the state of the art of understanding online hate speech engagement.",
"title": ""
},
{
"docid": "06121230af4767f5bd8baf5fa21e3df4",
"text": "A novel triband square-slot antenna with symmetrical L-strips is presented for WLAN and WiMAX applications. The proposed antenna is composed of a square slot, a pair of L-strips, and a monopole radiator. By employing these structures, the antenna can yield three different resonances to cover the desired bands while maintaining small size and simple structure. Based on this concept, a prototype of a triband antenna is designed, fabricated, and tested. The experimental results show the antenna has the impedance bandwidths of 480 MHz (2.34-2.82 GHz), 900 MHz (3.16-4.06 GHz), and 680 MHz (4.69-5.37 GHz), which can cover both WLAN in the 2.4/5.2-GHz bands and WiMAX in the 2.5/3.5-GHz bands.",
"title": ""
},
{
"docid": "31e6da3635ec5f538f15a7b3e2d95e5b",
"text": "Smart electricity meters are currently deployed in millions of households to collect detailed individual electricity consumption data. Compared with traditional electricity data based on aggregated consumption, smart meter data are much more volatile and less predictable. There is a need within the energy industry for probabilistic forecasts of household electricity consumption to quantify the uncertainty of future electricity demand in order to undertake appropriate planning of generation and distribution. We propose to estimate an additive quantile regression model for a set of quantiles of the future distribution using a boosting procedure. By doing so, we can benefit from flexible and interpretable models, which include an automatic variable selection. We compare our approach with three benchmark methods on both aggregated and disaggregated scales using a smart meter data set collected from 3639 households in Ireland at 30-min intervals over a period of 1.5 years. The empirical results demonstrate that our approach based on quantile regression provides better forecast accuracy for disaggregated demand, while the traditional approach based on a normality assumption (possibly after an appropriate Box-Cox transformation) is a better approximation for aggregated demand. These results are particularly useful since more energy data will become available at the disaggregated level in the future.",
"title": ""
},
{
"docid": "401cb3ebbc226ae117303f6a6bb6714c",
"text": "Brain-related disorders such as epilepsy can be diagnosed by analyzing electroencephalograms (EEG). However, manual analysis of EEG data requires highly trained clinicians, and is a procedure that is known to have relatively low inter-rater agreement (IRA). Moreover, the volume of the data and the rate at which new data becomes available make manual interpretation a time-consuming, resource-hungry, and expensive process. In contrast, automated analysis of EEG data offers the potential to improve the quality of patient care by shortening the time to diagnosis and reducing manual error. In this paper, we focus on one of the first steps in interpreting an EEG session identifying whether the brain activity is abnormal or normal. To address this specific task, we propose a novel recurrent neural network (RNN) architecture termed ChronoNet which is inspired by recent developments from the field of image classification and designed to work efficiently with EEG data. ChronoNet is formed by stacking multiple 1D convolution layers followed by deep gated recurrent unit (GRU) layers where each 1D convolution layer uses multiple filters of exponentially varying lengths and the stacked GRU layers are densely connected in a feed-forward manner. We used the recently released TUH Abnormal EEG Corpus dataset for evaluating the performance of ChronoNet. Unlike previous studies using this dataset, ChronoNet directly takes time-series EEG as input and learns meaningful representations of brain activity patterns. ChronoNet outperforms previously reported results on this dataset thereby setting a new benchmark. Furthermore, we demonstrate the domain-independent nature of ChronoNet by successfully applying it to classify speech commands.",
"title": ""
},
{
"docid": "05a17ff756b7c376a97cd22795e23187",
"text": "Detection of brain tumors from MRI is a time consuming and error-prone task. This is due to the diversity in shape, size and appearance of the tumors. In this paper, we propose a clustering algorithm based on Particle Swarm Optimization (PSO). The algorithm finds the centroids of number of clusters, where each cluster groups together brain tumor patterns, obtained from MR Images. The results obtained for three performance measures are compared with those obtained from Support Vector Machine (SVM) and Ada Boost. The performance analysis shows that qualitative results obtained from the proposed model are comparable with those obtained by SVM. However, to obtain better results from the proposed algorithm we need to carefully select the different values of PSO control parameters.",
"title": ""
},
{
"docid": "9e4adad2e248895d80f28cf6134f68c1",
"text": "Maltodextrin (MX) is an ingredient in high demand in the food industry, mainly for its useful physical properties which depend on the dextrose equivalent (DE). The DE has however been shown to be an inaccurate parameter for predicting the performance of the MXs in technological applications, hence commercial MXs were characterized by mass spectrometry (MS) to determine their molecular weight distribution (MWD) and degree of polymerization (DP). Samples were subjected to different water activities (aw). Water adsorption was similar at low aw, but radically increased with the DP at higher aw. The decomposition temperature (Td) showed some variations attributed to the thermal hydrolysis induced by the large amount of adsorbed water and the supplied heat. The glass transition temperature (Tg) linearly decreased with both, aw and DP. The microstructural analysis by X-ray diffraction showed that MXs did not crystallize with the adsorption of water, preserving their amorphous structure. The optical micrographs showed radical changes in the overall appearance of the MXs, indicating a transition from a glassy to a rubbery state. Based on these characterizations, different technological applications for the MXs were suggested.",
"title": ""
},
{
"docid": "cbbe1d60d580dccba44c13a7b88630e0",
"text": "OF THE DISSERTATION Sampling Algorithms to Handle Nuisances in Large-Scale Recognition",
"title": ""
},
{
"docid": "f568c4987b4c318567aa6b6a757d9510",
"text": "Privacy preserving mining of distributed data has numerous applications. Each application poses different constraints: What is meant by privacy, what are the desired results, how is the data distributed, what are the constraints on collaboration and cooperative computing, etc. We suggest that the solution to this is a toolkit of components that can be combined for specific privacy-preserving data mining applications. This paper presents some components of such a toolkit, and shows how they can be used to solve several privacy-preserving data mining problems.",
"title": ""
},
{
"docid": "721093cf84accd3035e23815656b5187",
"text": "Twitter popularity has increasingly grown in the last few years making influence on the social, political and business aspects of life. Therefore, sentiment analysis research has put special focus on Twitter. Tweet data have many peculiarities relevant to the use of informal language, slogans, and special characters. Furthermore, training machine learning classifiers from tweets data often faces the data sparsity problem primarily due to the large variety of Tweets expressed in only 140-character. In this work, we evaluate the performance of various classifiers commonly used in sentiment analysis to show their effectiveness in sentiment mining of Twitter data under different experimental setups. For the purpose of the study the Stanford Testing Sentiment dataset STS is used. Results of our analysis show that multinomial Naïve Bayes outperforms other classifiers in Twitter sentiment analysis and is less affected by data sparsity.",
"title": ""
},
{
"docid": "2729af242339c8cbc51f49047ed9d049",
"text": "We address the problem of interactive facial feature localization from a single image. Our goal is to obtain an accurate segmentation of facial features on high-resolution images under a variety of pose, expression, and lighting conditions. Although there has been significant work in facial feature localization, we are addressing a new application area, namely to facilitate intelligent high-quality editing of portraits, that brings requirements not met by existing methods. We propose an improvement to the Active Shape Model that allows for greater independence among the facial components and improves on the appearance fitting step by introducing a Viterbi optimization process that operates along the facial contours. Despite the improvements, we do not expect perfect results in all cases. We therefore introduce an interaction model whereby a user can efficiently guide the algorithm towards a precise solution. We introduce the Helen Facial Feature Dataset consisting of annotated portrait images gathered from Flickr that are more diverse and challenging than currently existing datasets. We present experiments that compare our automatic method to published results, and also a quantitative evaluation of the effectiveness of our interactive method.",
"title": ""
},
{
"docid": "55ac688824e9c50f86236a99004ac35a",
"text": "This paper examines aspects of design technology required to explore advanced logic-circuit design using carbon nanotube field-effect transistor (CNTFET) devices. An overview of current types of CNTFETs is given and highlights the salient characteristics of each. Compact modeling issues are addressed and new models are proposed implementing: 1) a physics-based calculation of energy conduction sub-band minima to allow a realistic analysis of the impact of CNT helicity and radius on the dc characteristics; 2) descriptions of ambipolar behavior in Schottky-barrier CNTFETs and ambivalence in double-gate CNTFETs (DG-CNTFETs). Using the available models, the influence of the parameters on the device characteristics were simulated and analyzed. The exploitation of properties specific to CNTFETs to build functions inaccessible to MOSFETs is also described, particularly with respect to the use of DG-CNTFETs in fine-grain reconfigurable logic.",
"title": ""
},
{
"docid": "8b5ea4603ac53a837c3e81dfe953a706",
"text": "Many teaching practices implicitly assume that conceptual knowledge can be abstracted from the situations in which it is learned and used. This article argues that this assumption inevitably limits the effectiveness of such practices. Drawing on recent research into cognition as it is manifest in everyday activity, the authors argue that knowledge is situated, being in part a product of the activity, context, and culture in which it is developed and used. They discuss how this view of knowledge affects our understanding of learning, and they note that conventional schooling too often ignores the influence of school culture on what is learned in school. As an alternative to conventional practices, they propose cognitive apprenticeship (Collins, Brown, Newman, in press), which honors the situated nature of knowledge. They examine two examples of mathematics instruction that exhibit certain key features of this approach to teaching. The breach between learning and use, which is captured by the folk categories \"know what\" and \"know how,\" may well be a product of the structure and practices of our education system. Many methods of didactic education assume a separation between knowing and doing, treating knowledge as an integral, self-sufficient substance, theoretically independent of the situations in which it is learned and used. The primary concern of schools often seems to be the transfer of this substance, which comprises abstract, decontextualized formal concepts. The activity and context in which learning takes place are thus regarded as merely ancillary to learning---pedagogically useful, of course, but fundamentally distinct and even neutral with respect to what is learned. Recent investigations of learning, however, challenge this separating of what is learned from how it is learned and used. The activity in which knowledge is developed and deployed, it is now argued, is not separable from or ancillary to learning and cognition. Nor is it neutral. Rather, it is an integral part of what is learned. Situations might be said to co-produce knowledge through activity. Learning and cognition, it is now possible to argue, are fundamentally situated. In this paper, we try to explain in a deliberately speculative way, why activity and situations are integral to cognition and learning, and how different ideas of what is appropriate learning activity produce very different results. We suggest that, by ignoring the situated nature of cognition, education defeats its own goal of providing useable, robust knowledge. And conversely, we argue that approaches such as cognitive apprenticeship (Collins, Brown, & Newman, in press) that embed learning in activity and make deliberate use of the social and physical context are more in line with the understanding of learning and cognition that is emerging from research. Situated Knowledge and Learning Miller and Gildea's (1987) work on vocabulary teaching has shown how the assumption that knowing and doing can be separated leads to a teaching method that ignores the way situations structure cognition. Their work has described how children are taught words from dictionary definitions and a few exemplary sentences, and they have compared this method with the way vocabulary is normally learned outside school. People generally learn words in the context of ordinary communication. This process is startlingly fast and successful. Miller and Gildea note that by listening, talking, and reading, the average 17-year-old has learned vocabulary at a rate of 5,000 words per year (13 per day) for over 16 years. By contrast, learning words from abstract definitions and sentences taken out of the context of normal use, the way vocabulary has often been taught, is slow and generally unsuccessful. There is barely enough classroom time to teach more than 100 to 200 words per year. Moreover, much of what is taught turns out to be almost useless in practice. They give the following examples of students' uses of vocabulary acquired this way:definitions and sentences taken out of the context of normal use, the way vocabulary has often been taught, is slow and generally unsuccessful. There is barely enough classroom time to teach more than 100 to 200 words per year. Moreover, much of what is taught turns out to be almost useless in practice. They give the following examples of students' uses of vocabulary acquired this way: \"Me and my parents correlate, because without them I wouldn't be here.\" \"I was meticulous about falling off the cliff.\" \"Mrs. Morrow stimulated the soup.\" Given the method, such mistakes seem unavoidable. Teaching from dictionaries assumes that definitions and exemplary sentences are self-contained \"pieces\" of knowledge. But words and sentences are not islands, entire unto themselves. Language use would involve an unremitting confrontation with ambiguity, polysemy, nuance, metaphor, and so forth were these not resolved with the extralinguistic help that the context of an utterance provides (Nunberg, 1978). Prominent among the intricacies of language that depend on extralinguistic help are indexical words --words like I, here, now, next, tomorrow, afterwards, this. Indexical terms are those that \"index\"or more plainly point to a part of the situation in which communication is being conducted. They are not merely contextsensitive; they are completely context-dependent. Words like I or now, for instance, can only be interpreted in the 'context of their use. Surprisingly, all words can be seen as at least partially indexical (Barwise & Perry, 1983). Experienced readers implicitly understand that words are situated. They, therefore, ask for the rest of the sentence or the context before committing themselves to an interpretation of a word. And they go to dictionaries with situated examples of usage in mind. The situation as well as the dictionary supports the interpretation. But the students who produced the sentences listed had no support from a normal communicative situation. In tasks like theirs, dictionary definitions are assumed to be self-sufficient. The extralinguistic props that would structure, constrain, and ultimately allow interpretation in normal communication are ignored. Learning from dictionaries, like any method that tries to teach abstract concepts independently of authentic situations, overlooks the way understanding is developed through continued, situated use. This development, which involves complex social negotiations, does not crystallize into a categorical definition. Because it is dependent on situations and negotiations, the meaning of a word cannot, in principle, be captured by a definition, even when the definition is supported by a couple of exemplary sentences. All knowledge is, we believe, like language. Its constituent parts index the world and so are inextricably a product of the activity and situations in which they are produced. A concept, for example, will continually evolve with each new occasion of use, because new situations, negotiations, and activities inevitably recast it in a new, more densely textured form. So a concept, like the meaning of a word, is always under construction. This would also appear to be true of apparently well-defined, abstract technical concepts. Even these are not wholly definable and defy categorical description; part of their meaning is always inherited from the context of use. Learning and tools. To explore the idea that concepts are both situated and progressively developed through activity, we should abandon any notion that they are abstract, self-contained entities. Instead, it may be more useful to consider conceptual knowledge as, in some ways, similar to a set of tools. Tools share several significant features with knowledge: They can only be fully understood through use, and using them entails both changing the user's view of the world and adopting the belief system of the culture in which they are used. First, if knowledge is thought of as tools, we can illustrate Whitehead's (1929) distinction between the mere acquisition of inert concepts and the development of useful, robust knowledge. It is quite possible to acquire a tool but to be unable to use it. Similarly, it is common for students to acquire algorithms, routines, and decontextualized definitions that they cannot use and that, therefore, lie inert. Unfortunately, this problem is not always apparent. Old-fashioned pocket knives, for example, have a device for removing stones from horses' hooves. People with this device may know its use and be able to talk wisely about horses, hooves, and stones. But they may never betray --or even recognize --that they would not begin to know how to use this implement on a horse. Similarly, students can often manipulate algorithms, routines, and definitions they have acquired with apparent competence and yet not reveal, to their teachers or themselves, that they would have no idea what to do if they came upon the domain equivalent of a limping horse. People who use tools actively rather than just acquire them, by contrast, build an increasingly rich implicit understanding of the world in which they use the tools and of the tools themselves. The understanding, both of the world and of the tool, continually changes as a result of their interaction. Learning and acting are interestingly indistinct, learning being a continuous, life-long process resulting from acting in situations. Learning how to use a tool involves far more than can be accounted for in any set of explicit rules. The occasions and conditions for use arise directly out of the context of activities of each community that uses the tool, framed by the way members of that community see the world. The community and its viewpoint, quite as much as the tool itself, determine how a tool is used. Thus, carpenters and cabinet makers use chisels differently. Because tools and the way they are used reflect the particular accumulated insights of communities, it is not ",
"title": ""
},
{
"docid": "42a81e39b411ba4613ff22090097548c",
"text": "We present a neural network method for review rating prediction in this paper. Existing neural network methods for sentiment prediction typically only capture the semantics of texts, but ignore the user who expresses the sentiment. This is not desirable for review rating prediction as each user has an influence on how to interpret the textual content of a review. For example, the same word (e.g. “good”) might indicate different sentiment strengths when written by different users. We address this issue by developing a new neural network that takes user information into account. The intuition is to factor in user-specific modification to the meaning of a certain word. Specifically, we extend the lexical semantic composition models and introduce a userword composition vector model (UWCVM), which effectively captures how user acts as a function affecting the continuous word representation. We integrate UWCVM into a supervised learning framework for review rating prediction, and conduct experiments on two benchmark review datasets. Experimental results demonstrate the effectiveness of our method. It shows superior performances over several strong baseline methods.",
"title": ""
},
{
"docid": "7f68cbaa4fdc043cddd9fe625657610e",
"text": "While clustering is one of the most popular methods for data mining, analysts lack adequate tools for quick, iterative clustering analysis, which is essential for hypothesis generation and data reasoning. We introduce Clustrophile, an interactive tool for iteratively computing discrete and continuous data clusters, rapidly exploring different choices of clustering parameters, and reasoning about clustering instances in relation to data dimensions. Clustrophile combines three basic visualizations – a table of raw datasets, a scatter plot of planar projections, and a matrix diagram (heatmap) of discrete clusterings – through interaction and intermediate visual encoding. Clustrophile also contributes two spatial interaction techniques, forward projection and backward projection, and a visualization method, prolines, for reasoning about two-dimensional projections obtained through dimensionality reductions.",
"title": ""
},
{
"docid": "e2584097dbbe8b1547e816d4e2fa1903",
"text": "In order to develop security critical Information Systems, specifying security quality requirements is vitally important, although it is a very difficult task. Fortunately, there are several security standards, like the Common Criteria (ISO/IEC 15408), which help us handle security requirements. This article will present a Common Criteria centred and reuse-based process that deals with security requirements at the early stages of software development in a systematic and intuitive way, by providing a security resources repository as well as integrating the Common Criteria into the software lifecycle, so that it unifies the concepts of requirements engineering and security engineering. © 2006 Elsevier B.V. All rights reserved.",
"title": ""
},
{
"docid": "fba48672e859a7606707406267dd0957",
"text": "We suggest a spectral histogram, defined as the marginal distribution of filter responses, as a quantitative definition for a texton pattern. By matching spectral histograms, an arbitrary image can be transformed to an image with similar textons to the observed. We use the chi(2)-statistic to measure the difference between two spectral histograms, which leads to a texture discrimination model. The performance of the model well matches psychophysical results on a systematic set of texture discrimination data and it exhibits the nonlinearity and asymmetry phenomena in human texture discrimination. A quantitative comparison with the Malik-Perona model is given, and a number of issues regarding the model are discussed.",
"title": ""
},
{
"docid": "0d95c132ff0dcdb146ed433987c426cf",
"text": "A smart connected car in conjunction with the Internet of Things (IoT) is an emerging topic. The fundamental concept of the smart connected car is connectivity, and such connectivity can be provided by three aspects, such as Vehicle-to-Vehicle (V2V), Vehicle-to-Infrastructure (V2I), and Vehicle-to-Everything (V2X). To meet the aspects of V2V and V2I connectivity, we developed modules in accordance with international standards with respect to On-Board Diagnostics II (OBDII) and 4G Long Term Evolution (4G-LTE) to obtain and transmit vehicle information. We also developed software to visually check information provided by our modules. Information related to a user’s driving, which is transmitted to a cloud-based Distributed File System (DFS), was then analyzed for the purpose of big data analysis to provide information on driving habits to users. Yet, since this work is an ongoing research project, we focus on proposing an idea of system architecture and design in terms of big data analysis. Therefore, our contributions through this work are as follows: (1) Develop modules based on Controller Area Network (CAN) bus, OBDII, and 4G-LTE; (2) Develop software to check vehicle information on a PC; (3) Implement a database related to vehicle diagnostic codes; (4) Propose system architecture and design for big data analysis.",
"title": ""
}
] |
scidocsrr
|
ac102b72b0c64cf20c1c7a7e26f137a3
|
Soft-computing techniques and ARMA model for time series prediction
|
[
{
"docid": "784c7c785b2e47fad138bba38b753f31",
"text": "A local linear wavelet neural network (LLWNN) is presented in this paper. The difference of the network with conventional wavelet neural network (WNN) is that the connection weights between the hidden layer and output layer of conventional WNN are replaced by a local linear model. A hybrid training algorithm of particle swarm optimization (PSO) with diversity learning and gradient descent method is introduced for training the LLWNN. Simulation results for the prediction of time-series show the feasibility and effectiveness of the proposed method. r 2005 Elsevier B.V. All rights reserved.",
"title": ""
}
] |
[
{
"docid": "e2ba4f88f4b1a8afcf51882bc7cfa634",
"text": "The embodied and situated approach to artificial intelligence (AI) has matured and become a viable alternative to traditional computationalist approaches with respect to the practical goal of building artificial agents, which can behave in a robust and flexible manner under changing real-world conditions. Nevertheless, some concerns have recently been raised with regard to the sufficiency of current embodied AI for advancing our scientific understanding of intentional agency. While from an engineering or computer science perspective this limitation might not be relevant, it is of course highly relevant for AI researchers striving to build accurate models of natural cognition. We argue that the biological foundations of enactive cognitive science can provide the conceptual tools that are needed to diagnose more clearly the shortcomings of current embodied AI. In particular, taking an enactive perspective points to the need for AI to take seriously the organismic roots of autonomous agency and sense-making. We identify two necessary systemic requirements, namely constitutive autonomy and adaptivity, which lead us to introduce two design principles of enactive AI. It is argued that the development of such enactive AI poses a significant challenge to current methodologies. However, it also provides a promising way of eventually overcoming the current limitations of embodied AI, especially in terms of providing fuller models of natural embodied cognition. Finally, some practical implications and examples of the two design principles of enactive AI are also discussed.",
"title": ""
},
{
"docid": "d848e146b4dbf78a6c629c5963c92f50",
"text": "Agile development is getting more and more used, also in the development of safety-critical software. For the sake of certification, it is necessary to comply with relevant standards – in this case IEC 61508 and EN 50128. In this paper we focus on two aspects of the need for configuration management and SafeScrum. First and foremost we need to adapt SafeScrum to the standards’ needs for configuration management. We show that this can be achieved by relative simple amendments to SafeScrum. In addition – in order to keep up with a rapidly changing set of development paradigms it is necessary to move the standards’ requirement in a goal based direction – more focus on what and not so much focus on how.",
"title": ""
},
{
"docid": "7321a25cb98e25f3773447f66f0d176e",
"text": "The biolinguistic perspective regards the language faculty as an organ of the body, along with other cognitive systems. Adopting it, we expect to find three factors that interact to determine (I-) languages attained: genetic endowment (the topic of Universal Grammar), experience, and principles that are language- or even organism-independent. Research has naturally focused on I-languages and UG, the problems of descriptive and explanatory adequacy. The Principles-and-Parameters approach opened the possibility for serious investigation of the third factor, and the attempt to account for properties of language in terms of general considerations of computational efficiency, eliminating some of the technology postulated as specific to language and providing more principled explanation of linguistic phenomena",
"title": ""
},
{
"docid": "51e0caf419babd61615e1537545e40e8",
"text": "Past research on automatic facial expression analysis has focused mostly on the recognition of prototypic expressions of discrete emotions rather than on the analysis of dynamic changes over time, although the importance of temporal dynamics of facial expressions for interpretation of the observed facial behavior has been acknowledged for over 20 years. For instance, it has been shown that the temporal dynamics of spontaneous and volitional smiles are fundamentally different from each other. In this work, we argue that the same holds for the temporal dynamics of brow actions and show that velocity, duration, and order of occurrence of brow actions are highly relevant parameters for distinguishing posed from spontaneous brow actions. The proposed system for discrimination between volitional and spontaneous brow actions is based on automatic detection of Action Units (AUs) and their temporal segments (onset, apex, offset) produced by movements of the eyebrows. For each temporal segment of an activated AU, we compute a number of mid-level feature parameters including the maximal intensity, duration, and order of occurrence. We use Gentle Boost to select the most important of these parameters. The selected parameters are used further to train Relevance Vector Machines to determine per temporal segment of an activated AU whether the action was displayed spontaneously or volitionally. Finally, a probabilistic decision function determines the class (spontaneous or posed) for the entire brow action. When tested on 189 samples taken from three different sets of spontaneous and volitional facial data, we attain a 90.7% correct recognition rate.",
"title": ""
},
{
"docid": "8471c34489a205dd738dadd2ecf83348",
"text": "Recent neuroimaging studies have shown the importance of the prefrontal and anterior cingulate cortices in deception. However, little is known about the role of each of these regions during deception. Using positron emission tomography (PET), we measured brain activation while participants told truths or lies about two types of real-world events: experienced and unexperienced. The imaging data revealed that activity of the dorsolateral, ventrolateral and medial prefrontal cortices was commonly associated with both types of deception (pretending to know and pretending not to know), whereas activity of the anterior cingulate cortex (ACC) was only associated with pretending not to know. Regional cerebral blood flow (rCBF) increase in the ACC was positively correlated with that in the dorsolateral prefrontal cortex only during pretending not to know. These results suggest that the lateral and medial prefrontal cortices have general roles in deception, whereas the ACC contributes specifically to pretending not to know.",
"title": ""
},
{
"docid": "fb581f0d3db5dcd7e2e2b5474c5812f1",
"text": "Sequence-to-Sequence (seq2seq) models have become overwhelmingly popular in building end-to-end trainable dialogue systems. Though highly efficient in learning the backbone of human-computer communications, they suffer from the problem of strongly favoring short generic responses. In this paper, we argue that a good response should smoothly connect both the preceding dialogue history and the following conversations. We strengthen this connection through mutual information maximization. To sidestep the nondifferentiability of discrete natural language tokens, we introduce an auxiliary continuous code space and map such code space to a learnable prior distribution for generation purpose. Experiments on two dialogue datasets validate the effectiveness of our model, where the generated responses are closely related to the dialogue context and lead to more interactive conversations.",
"title": ""
},
{
"docid": "90753a8c6ea17cc1a857898050e8ffca",
"text": "The panel focuses on blockchain, the technology behind Bitcoin and Ethereum. The topic has drawn much attention recently in both business and academic circles. The blockchain is a distributed, immutable digital record system that is shared among many independent parties and can be updated only by their consensus. If unbiased and incorruptible blockchain-based information systems become prevalent repositories of our records, trusting other humans with constructing and maintaining key records to define the resources at our disposal could become unnecessary. In principle, blockchain could provide a decentralized information infrastructure that no one fully controls, thereby no one has absolute power and no one can distort past or current records. The full potential let alone implications of blockchain is still unknown. The panel explores blockchain challenges and opportunities from the IS research perspective.",
"title": ""
},
{
"docid": "28b15544f3e054ca483382a471c513e5",
"text": "In this work, design and control system development of a gas-electric hybrid quad tilt-rotor UAV with morphing wing are presented. The proposed aircraft has an all carbon-composite body, gas-electric hybrid electric generation system for 3 hours hovering or up to 10 hours of horizontal flight, a novel configuration for VTOL and airplane-like flights with minimized aerodynamic costs and mechanical morphing wings for both low speed and high speed horizontal flights. The mechanical design of the vehicle is performed to achieve a strong and light-weight structure, whereas the aerodynamic and propulsion system designs are aimed for accomplishing both fixed wing and rotary wing aircraft flights with maximized flight endurance. A detailed dynamic model of the aerial vehicle is developed including the effects of tilting rotors, variable fuel weight, and morphing wing lift-drag forces and pitching moments. Control system is designed for both flight regimes and flight simulations are carried out to check the performance of the proposed control system.",
"title": ""
},
{
"docid": "1ebf2152d5624261951bebd68c306d5e",
"text": "A dual active bridge (DAB) is a zero-voltage switching (ZVS) high-power isolated dc-dc converter. The development of a 15-kV SiC insulated-gate bipolar transistor switching device has enabled a noncascaded medium voltage (MV) isolated dc-dc DAB converter. It offers simple control compared to a cascaded topology. However, a compact-size high frequency (HF) DAB transformer has significant parasitic capacitances for such voltage. Under high voltage and high dV/dT switching, the parasitics cause electromagnetic interference and switching loss. They also pose additional challenges for ZVS. The device capacitance and slowing of dV/dT play a major role in deadtime selection. Both the deadtime and transformer parasitics affect the ZVS operation of the DAB. Thus, for the MV-DAB design, the switching characteristics of the devices and MV HF transformer parasitics have to be closely coupled. For the ZVS mode, the current vector needs to be between converter voltage vectors with a certain phase angle defined by deadtime, parasitics, and desired converter duty ratio. This paper addresses the practical design challenges for an MV-DAB application.",
"title": ""
},
{
"docid": "e4628211d0d2657db387c093228e9b9b",
"text": "BACKGROUND\nMindfulness-based stress reduction (MBSR) is a clinically standardized meditation that has shown consistent efficacy for many mental and physical disorders. Less attention has been given to the possible benefits that it may have in healthy subjects. The aim of the present review and meta-analysis is to better investigate current evidence about the efficacy of MBSR in healthy subjects, with a particular focus on its benefits for stress reduction.\n\n\nMATERIALS AND METHODS\nA literature search was conducted using MEDLINE (PubMed), the ISI Web of Knowledge, the Cochrane database, and the references of retrieved articles. The search included articles written in English published prior to September 2008, and identified ten, mainly low-quality, studies. Cohen's d effect size between meditators and controls on stress reduction and spirituality enhancement values were calculated.\n\n\nRESULTS\nMBSR showed a nonspecific effect on stress reduction in comparison to an inactive control, both in reducing stress and in enhancing spirituality values, and a possible specific effect compared to an intervention designed to be structurally equivalent to the meditation program. A direct comparison study between MBSR and standard relaxation training found that both treatments were equally able to reduce stress. Furthermore, MBSR was able to reduce ruminative thinking and trait anxiety, as well as to increase empathy and self-compassion.\n\n\nCONCLUSIONS\nMBSR is able to reduce stress levels in healthy people. However, important limitations of the included studies as well as the paucity of evidence about possible specific effects of MBSR in comparison to other nonspecific treatments underline the necessity of further research.",
"title": ""
},
{
"docid": "6c5cabfa5ee5b9d67ef25658a4b737af",
"text": "Sentence compression is the task of producing a summary of a single sentence. The compressed sentence should be shorter, contain the important content from the original, and itself be grammatical. The three papers discussed here take different approaches to identifying important content, determining which sentences are grammatical, and jointly optimizing these objectives. One family of approaches we will discuss is those that are tree-based, which create a compressed sentence by making edits to the syntactic tree of the original sentence. A second type of approach is sentence-based, which generates strings directly. Orthogonal to either of these two approaches is whether sentences are treated in isolation or if the surrounding discourse affects compressions. We compare a tree-based, a sentence-based, and a discourse-based approach and conclude with ideas for future work in this area. Comments University of Pennsylvania Department of Computer and Information Science Technical Report No. MSCIS-10-20. This technical report is available at ScholarlyCommons: http://repository.upenn.edu/cis_reports/929 Methods for Sentence Compression",
"title": ""
},
{
"docid": "d212d81105e3573b5a7a33695fa3a764",
"text": "To achieve tasks in unknown environments with high reliability, highly accurate localization during task execution is necessary for humanoid robots. In this paper, we discuss a localization system which can be applied to a humanoid robot when executing tasks in the real world. During such tasks, humanoid robots typically do not possess a referential to a constant horizontal plane which can in turn be used as part of fast and cost efficient localization methods. We solve this problem by first computing an improved odometry estimate through fusing visual odometry, feedforward commands from gait generator and orientation from inertia sensors. This estimate is used to generate a 3D point cloud from the accumulation of successive laser scans and such point cloud is then properly sliced to create a constant height horizontal virtual scan. Finally, this slice is used as an observation base and fed to a 2D SLAM method. The fusion process uses a velocity error model to achieve greater accuracy, which parameters are measured on the real robot. We evaluate our localization system in a real world task execution experiment using the JAXON robot and show how our system can be used as a practical solution for humanoid robots localization during complex tasks execution processes.",
"title": ""
},
{
"docid": "d5d03cdfd3a6d6c2b670794d76e91c8e",
"text": "We present RACE, a new dataset for benchmark evaluation of methods in the reading comprehension task. Collected from the English exams for middle and high school Chinese students in the age range between 12 to 18, RACE consists of near 28,000 passages and near 100,000 questions generated by human experts (English instructors), and covers a variety of topics which are carefully designed for evaluating the students’ ability in understanding and reasoning. In particular, the proportion of questions that requires reasoning is much larger in RACE than that in other benchmark datasets for reading comprehension, and there is a significant gap between the performance of the state-of-the-art models (43%) and the ceiling human performance (95%). We hope this new dataset can serve as a valuable resource for research and evaluation in machine comprehension. The dataset is freely available at http://www.cs.cmu.edu/ ̃glai1/data/race/ and the code is available at https://github.com/ cheezer/RACE_AR_baselines.",
"title": ""
},
{
"docid": "ced697994e4e8f8c65b4a06dae42ddeb",
"text": "Despite recent advances, the remaining bottlenecks in deep generative models are necessity of extensive training and difficulties with generalization from small number of training examples. Both problems may be addressed by conditional generative models that are trained to adapt the generative distribution to additional input data. So far this idea was explored only under certain limitations such as restricting the input data to be a single object or multiple objects representing the same concept. In this work we develop a new class of deep generative model called generative matching networks which is inspired by the recently proposed matching networks for one-shot learning in discriminative tasks and the ideas from meta-learning. By conditioning on the additional input dataset, generative matching networks may instantly learn new concepts that were not available during the training but conform to a similar generative process, without explicit limitations on the number of additional input objects or the number of concepts they represent. Our experiments on the Omniglot dataset demonstrate that generative matching networks can significantly improve predictive performance on the fly as more additional data is available to the model and also adapt the latent space which is beneficial in the context of feature extraction.",
"title": ""
},
{
"docid": "404bd4b3c7756c87805fa286415aac43",
"text": "Although key techniques for next-generation wireless communication have been explored separately, relatively little work has been done to investigate their potential cooperation for performance optimization. To address this problem, we propose a holistic framework for robust 5G communication based on multiple-input-multiple-output (MIMO) orthogonal frequency division multiplexing (OFDM). More specifically, we design a new framework that supports: 1) index modulation based on OFDM (OFDM–M) [1]; 2) sub-band beamforming and channel estimation to achieve massive path gains by exploiting multiple antenna arrays [2]; and 3) sub-band pre-distortion for peak-to-average-power-ratio (PAPR) reduction [3] to significantly decrease the PAPR and communication errors in OFDM-IM by supporting a linear behavior of the power amplifier in the modem. The performance of the proposed framework is evaluated against the state-of-the-art QPSK, OFDM-IM [1] and QPSK-spatiotemporal QPSK-ST [2] schemes. The results show that our framework reduces the bit error rate (BER), mean square error (MSE) and PAPR compared to the baselines by approximately 6–13dB, 8–13dB, and 50%, respectively.",
"title": ""
},
{
"docid": "1503d2a235b2ce75516d18cdea42bbb5",
"text": "Phosphatidylinositol-3,4,5-trisphosphate (PtdIns(3,4,5)P3 or PIP3) mediates signalling pathways as a second messenger in response to extracellular signals. Although primordial functions of phospholipids and RNAs have been hypothesized in the ‘RNA world’, physiological RNA–phospholipid interactions and their involvement in essential cellular processes have remained a mystery. We explicate the contribution of lipid-binding long non-coding RNAs (lncRNAs) in cancer cells. Among them, long intergenic non-coding RNA for kinase activation (LINK-A) directly interacts with the AKT pleckstrin homology domain and PIP3 at the single-nucleotide level, facilitating AKT–PIP3 interaction and consequent enzymatic activation. LINK-A-dependent AKT hyperactivation leads to tumorigenesis and resistance to AKT inhibitors. Genomic deletions of the LINK-A PIP3-binding motif dramatically sensitized breast cancer cells to AKT inhibitors. Furthermore, meta-analysis showed the correlation between LINK-A expression and incidence of a single nucleotide polymorphism (rs12095274: A > G), AKT phosphorylation status, and poor outcomes for breast and lung cancer patients. PIP3-binding lncRNA modulates AKT activation with broad clinical implications.",
"title": ""
},
{
"docid": "979112832db3e0ec7c1288ef916d574e",
"text": "Recently, deep neural networks have been shown to perform competitively on the task of predicting facial expression from images. Trained by gradient-based methods, these networks are amenable to \"multi-task\" learning via a multiple term objective. In this paper we demonstrate that learning representations to predict the position and shape of facial landmarks can improve expression recognition from images. We show competitive results on two large-scale datasets, the ICML 2013 Facial Expression Recognition challenge, and the Toronto Face Database.",
"title": ""
},
{
"docid": "8a73a42bed30751cbb6798398b81571d",
"text": "In this paper, we study the problem of learning image classification models with label noise. Existing approaches depending on human supervision are generally not scalable as manually identifying correct or incorrect labels is time-consuming, whereas approaches not relying on human supervision are scalable but less effective. To reduce the amount of human supervision for label noise cleaning, we introduce CleanNet, a joint neural embedding network, which only requires a fraction of the classes being manually verified to provide the knowledge of label noise that can be transferred to other classes. We further integrate CleanNet and conventional convolutional neural network classifier into one framework for image classification learning. We demonstrate the effectiveness of the proposed algorithm on both of the label noise detection task and the image classification on noisy data task on several large-scale datasets. Experimental results show that CleanNet can reduce label noise detection error rate on held-out classes where no human supervision available by 41.5% compared to current weakly supervised methods. It also achieves 47% of the performance gain of verifying all images with only 3.2% images verified on an image classification task. Source code and dataset will be available at kuanghuei.github.io/CleanNetProject.",
"title": ""
},
{
"docid": "09c5bfd9c7fcd78f15db76e8894751de",
"text": "Recently, active suspension is gaining popularity in commercial automobiles. To develop the control methodologies for active suspension control, a quarter-car test bed was built employing a direct-drive tubular linear brushless permanent-magnet motor (LBPMM) as a force-generating component. Two accelerometers and a linear variable differential transformer (LVDT) are used in this quarter-car test bed. Three pulse-width-modulation (PWM) amplifiers supply the currents in three phases. Simulated road disturbance is generated by a rotating cam. Modified lead-lag control, linear-quadratic (LQ) servo control with a Kalman filter, fuzzy control methodologies were implemented for active-suspension control. In the case of fuzzy control, an asymmetric membership function was introduced to eliminate the DC offset in sensor data and to reduce the discrepancy in the models. This controller could attenuate road disturbance by up to 77% in the sprung mass velocity and 69% in acceleration. The velocity and the acceleration data of the sprung mass are presented to compare the controllers' performance in the ride comfort of a vehicle. Both simulation and experimental results are presented to demonstrate the effectiveness of these control methodologies.",
"title": ""
}
] |
scidocsrr
|
ca7f9c13b421775d3be20c6c5650234d
|
Speech-Based Visual Question Answering
|
[
{
"docid": "4337f8c11a71533d38897095e5e6847a",
"text": "A number of recent works have proposed attention models for Visual Question Answering (VQA) that generate spatial maps highlighting image regions relevant to answering the question. In this paper, we argue that in addition to modeling “where to look” or visual attention, it is equally important to model “what words to listen to” or question attention. We present a novel co-attention model for VQA that jointly reasons about image and question attention. In addition, our model reasons about the question (and consequently the image via the co-attention mechanism) in a hierarchical fashion via a novel 1-dimensional convolution neural networks (CNN). Our model improves the state-of-the-art on the VQA dataset from 60.3% to 60.5%, and from 61.6% to 63.3% on the COCO-QA dataset. By using ResNet, the performance is further improved to 62.1% for VQA and 65.4% for COCO-QA.1. 1 Introduction Visual Question Answering (VQA) [2, 7, 16, 17, 29] has emerged as a prominent multi-discipline research problem in both academia and industry. To correctly answer visual questions about an image, the machine needs to understand both the image and question. Recently, visual attention based models [20, 23–25] have been explored for VQA, where the attention mechanism typically produces a spatial map highlighting image regions relevant to answering the question. So far, all attention models for VQA in literature have focused on the problem of identifying “where to look” or visual attention. In this paper, we argue that the problem of identifying “which words to listen to” or question attention is equally important. Consider the questions “how many horses are in this image?” and “how many horses can you see in this image?\". They have the same meaning, essentially captured by the first three words. A machine that attends to the first three words would arguably be more robust to linguistic variations irrelevant to the meaning and answer of the question. Motivated by this observation, in addition to reasoning about visual attention, we also address the problem of question attention. Specifically, we present a novel multi-modal attention model for VQA with the following two unique features: Co-Attention: We propose a novel mechanism that jointly reasons about visual attention and question attention, which we refer to as co-attention. Unlike previous works, which only focus on visual attention, our model has a natural symmetry between the image and question, in the sense that the image representation is used to guide the question attention and the question representation(s) are used to guide image attention. Question Hierarchy: We build a hierarchical architecture that co-attends to the image and question at three levels: (a) word level, (b) phrase level and (c) question level. At the word level, we embed the words to a vector space through an embedding matrix. At the phrase level, 1-dimensional convolution neural networks are used to capture the information contained in unigrams, bigrams and trigrams. The source code can be downloaded from https://github.com/jiasenlu/HieCoAttenVQA 30th Conference on Neural Information Processing Systems (NIPS 2016), Barcelona, Spain. ar X iv :1 60 6. 00 06 1v 3 [ cs .C V ] 2 6 O ct 2 01 6 Ques%on:\t\r What\t\r color\t\r on\t\r the stop\t\r light\t\r is\t\r lit\t\r up\t\r \t\r ? ...\t\r ... color\t\r stop\t\r light\t\r lit co-‐a7en%on color\t\r ...\t\r stop\t\r \t\r light\t\r \t\r ... What color\t\r ... the stop light light\t\r \t\r ... What color What\t\r color\t\r on\t\r the\t\r stop\t\r light\t\r is\t\r lit\t\r up ...\t\r ... the\t\r stop\t\r light ...\t\r ... stop Image Answer:\t\r green Figure 1: Flowchart of our proposed hierarchical co-attention model. Given a question, we extract its word level, phrase level and question level embeddings. At each level, we apply co-attention on both the image and question. The final answer prediction is based on all the co-attended image and question features. Specifically, we convolve word representations with temporal filters of varying support, and then combine the various n-gram responses by pooling them into a single phrase level representation. At the question level, we use recurrent neural networks to encode the entire question. For each level of the question representation in this hierarchy, we construct joint question and image co-attention maps, which are then combined recursively to ultimately predict a distribution over the answers. Overall, the main contributions of our work are: • We propose a novel co-attention mechanism for VQA that jointly performs question-guided visual attention and image-guided question attention. We explore this mechanism with two strategies, parallel and alternating co-attention, which are described in Sec. 3.3; • We propose a hierarchical architecture to represent the question, and consequently construct image-question co-attention maps at 3 different levels: word level, phrase level and question level. These co-attended features are then recursively combined from word level to question level for the final answer prediction; • At the phrase level, we propose a novel convolution-pooling strategy to adaptively select the phrase sizes whose representations are passed to the question level representation; • Finally, we evaluate our proposed model on two large datasets, VQA [2] and COCO-QA [17]. We also perform ablation studies to quantify the roles of different components in our model.",
"title": ""
},
{
"docid": "41b745c7958ca8576b4cd7394ad47f44",
"text": "We learn rich natural sound representations by capitalizing on large amounts of unlabeled sound data collected in the wild. We leverage the natural synchronization between vision and sound to learn an acoustic representation using two-million unlabeled videos. Unlabeled video has the advantage that it can be economically acquired at massive scales, yet contains useful signals about natural sound. We propose a student-teacher training procedure which transfers discriminative visual knowledge from well established visual recognition models into the sound modality using unlabeled video as a bridge. Our sound representation yields significant performance improvements over the state-of-the-art results on standard benchmarks for acoustic scene/object classification. Visualizations suggest some high-level semantics automatically emerge in the sound network, even though it is trained without ground truth labels.",
"title": ""
}
] |
[
{
"docid": "7d175a93272a079b9bd2d4a691660a50",
"text": "Dermatitis herpetiformis (DH) is a chronic, polymorphic, pruritic skin disease that develops mostly in patients with latent gluten-sensitive enteropathy. DH patients usually present with skin manifestations only and are not aware of the underlying small-bowel problems. Owing to the granular immunoglobulin (Ig) A deposition at the tips of the papillary dermis and to the subepidermal blister formation associated with neutrophilic accumulations underlying the basement membrane, DH is considered to be an autoimmune blistering disease. Contrary to the other bullous disorders, DH patients have no circulating autoantibodies binding to the cutaneous basement membrane components or to other adherent structures of the skin, but they have gluten-induced IgA autoantibodies against transglutaminase (TG) 2 and TG3. The serum IgA against tissue TG2 is a most specific and sensitive serologic marker of gluten-sensitive enteropathy and is equivalent to the perviously described IgA endomysium antibodies. DH could be a cutaneous IgA-epidermal TG3 immunocomplex disease, developing only in a few patients with gluten-sensitive enteropathy as a second gluten-dependent disease. The main treatment of DH today is a strict, life-long gluten-free diet. Untreated DH patients should be regularly monitored for malabsorption and lymphomas. Associated autoimmune diseases are more common among DH patients. Family screening for gluten sensitivity is also strongly suggested.",
"title": ""
},
{
"docid": "af2f9dd69e90ed3c61e09b5b53fa1cdb",
"text": "Cellular networks are one of the cornerstones of our information-driven society. However, existing cellular systems have been seriously challenged by the explosion of mobile data traffic, the emergence of machine-type communications, and the flourishing of mobile Internet services. In this article, we propose CONCERT, a converged edge infrastructure for future cellular communications and mobile computing services. The proposed architecture is constructed based on the concept of control/data (C/D) plane decoupling. The data plane includes heterogeneous physical resources such as radio interface equipment, computational resources, and software-defined switches. The control plane jointly coordinates physical resources to present them as virtual resources, over which software-defined services including communications, computing, and management can be deployed in a flexible manner. Moreover, we introduce new designs for physical resources placement and task scheduling so that CONCERT can overcome the drawbacks of the existing baseband-up centralization approach and better facilitate innovations in next-generation cellular networks. These advantages are demonstrated with application examples on radio access networks with C/D decoupled air interface, delaysensitive machine-type communications, and realtime mobile cloud gaming. We also discuss some fundamental research issues arising with the proposed architecture to illuminate future research directions.",
"title": ""
},
{
"docid": "7fbc4db77312a4ee26cf6565b36d9664",
"text": "This paper describes a novel system for creating virtual creatures that move and behave in simulated three-dimensional physical worlds. The morphologies of creatures and the neural systems for controlling their muscle forces are both generated automatically using genetic algorithms. Different fitness evaluation functions are used to direct simulated evolutions towards specific behaviors such as swimming, walking, jumping, and following.\nA genetic language is presented that uses nodes and connections as its primitive elements to represent directed graphs, which are used to describe both the morphology and the neural circuitry of these creatures. This genetic language defines a hyperspace containing an indefinite number of possible creatures with behaviors, and when it is searched using optimization techniques, a variety of successful and interesting locomotion strategies emerge, some of which would be difficult to invent or built by design.",
"title": ""
},
{
"docid": "f7fa13048b42a566d8621f267141f80d",
"text": "The software underpinning today's IT systems needs to adapt dynamically and predictably to rapid changes in system workload, environment and objectives. We describe a software framework that achieves such adaptiveness for IT systems whose components can be modelled as Markov chains. The framework comprises (i) an autonomic architecture that uses Markov-chain quantitative analysis to dynamically adjust the parameters of an IT system in line with its state, environment and objectives; and (ii) a method for developing instances of this architecture for real-world systems. Two case studies are presented that use the framework successfully for the dynamic power management of disk drives, and for the adaptive management of cluster availability within data centres, respectively.",
"title": ""
},
{
"docid": "3e409a01cfc02c0b89bae310c3f693fe",
"text": "The last ten years have seen an increasing interest, within cognitive science, in issues concerning the physical body, the local environment, and the complex interplay between neural systems and the wider world in which they function. Yet many unanswered questions remain, and the shape of a genuinely physically embodied, environmentally embedded science of the mind is still unclear. In this article I will raise a number of critical questions concerning the nature and scope of this approach, drawing a distinction between two kinds of appeal to embodiment: (1) 'Simple' cases, in which bodily and environmental properties merely constrain accounts that retain the focus on inner organization and processing; and (2) More radical appeals, in which attention to bodily and environmental features is meant to transform both the subject matter and the theoretical framework of cognitive science.",
"title": ""
},
{
"docid": "6533c68c486f01df6fbe80993a9902a1",
"text": "Frequent pattern mining has been a focused theme in data mining research for over a decade. Abundant literature has been dedicated to this research and tremendous progress has been made, ranging from efficient and scalable algorithms for frequent itemset mining in transaction databases to numerous research frontiers, such as sequential pattern mining, structured pattern mining, correlation mining, associative classification, and frequent pattern-based clustering, as well as their broad applications. In this article, we provide a brief overview of the current status of frequent pattern mining and discuss a few promising research directions. We believe that frequent pattern mining research has substantially broadened the scope of data analysis and will have deep impact on data mining methodologies and applications in the long run. However, there are still some challenging research issues that need to be solved before frequent pattern mining can claim a cornerstone approach in data mining applications.",
"title": ""
},
{
"docid": "f70c07e15c4070edf75e8846b4dff0b3",
"text": "Polyphenols, including flavonoids, phenolic acids, proanthocyanidins and resveratrol, are a large and heterogeneous group of phytochemicals in plant-based foods, such as tea, coffee, wine, cocoa, cereal grains, soy, fruits and berries. Growing evidence indicates that various dietary polyphenols may influence carbohydrate metabolism at many levels. In animal models and a limited number of human studies carried out so far, polyphenols and foods or beverages rich in polyphenols have attenuated postprandial glycemic responses and fasting hyperglycemia, and improved acute insulin secretion and insulin sensitivity. The possible mechanisms include inhibition of carbohydrate digestion and glucose absorption in the intestine, stimulation of insulin secretion from the pancreatic beta-cells, modulation of glucose release from the liver, activation of insulin receptors and glucose uptake in the insulin-sensitive tissues, and modulation of intracellular signalling pathways and gene expression. The positive effects of polyphenols on glucose homeostasis observed in a large number of in vitro and animal models are supported by epidemiological evidence on polyphenol-rich diets. To confirm the implications of polyphenol consumption for prevention of insulin resistance, metabolic syndrome and eventually type 2 diabetes, human trials with well-defined diets, controlled study designs and clinically relevant end-points together with holistic approaches e.g., systems biology profiling technologies are needed.",
"title": ""
},
{
"docid": "29ba9c1cccea263a4db25da4352da754",
"text": "Distance metric learning is a fundamental problem in data mining and knowledge discovery. Many representative data mining algorithms, such as $$k$$ k -nearest neighbor classifier, hierarchical clustering and spectral clustering, heavily rely on the underlying distance metric for correctly measuring relations among input data. In recent years, many studies have demonstrated, either theoretically or empirically, that learning a good distance metric can greatly improve the performance of classification, clustering and retrieval tasks. In this survey, we overview existing distance metric learning approaches according to a common framework. Specifically, depending on the available supervision information during the distance metric learning process, we categorize each distance metric learning algorithm as supervised, unsupervised or semi-supervised. We compare those different types of metric learning methods, point out their strength and limitations. Finally, we summarize open challenges in distance metric learning and propose future directions for distance metric learning.",
"title": ""
},
{
"docid": "c890c635dd0f2dcb6827f59707b5dcd4",
"text": "We presenttwo families of reflective surfacesthat are capableof providing a wide field of view, andyet still approximatea perspecti ve projectionto a high degree.These surfacesarederivedby consideringaplaneperpendicular to theaxisof a surfaceof revolutionandfinding theequations governingthedistortionof theimageof theplanein thissurface. We thenview this relationasa differentialequation and prescribethe distortion term to be linear. By choosing appropriateinitial conditionsfor the differentialequation andsolvingit numerically, wederivethesurfaceshape andobtaina preciseestimateasto what degreethe resulting sensorcanapproximatea perspecti ve projection.Thus thesesurfacesactascomputational sensors, allowing for a wide-angleperspecti ve view of a scenewithout processing the imagein software. The applicationsof sucha sensor shouldbe numerous,including surveillance,roboticsand traditionalphotography . Recently, many researchersin the roboticsand vision communityhave begun to considervisual sensorsthat are ableto obtainwidefieldsof view. Suchdevicesarethenatural solution to variousdifficulties encounteredwith conventionalimagingsystems. Thetwo mostcommonmeansof obtainingwidefieldsof view arefish-eye lensesandreflectivesurfaces,alsoknown ascatoptrics.Whencatoptricsarecombinedwith conventional lenssystems,known asdioptrics,the resultingsensors are known as catadioptrics. The possibleusesof thesesystemsincludeapplicationssuchasrobotcontroland surveillance. In this paperwe will consideronly catadioptric basedsensors.Oftensuchsystemsconsistof a camera pointingataconvex mirror, asin figure(1). How to interpretand make useof the visual information obtainedby suchsystems,e.g. how they shouldbe usedto control robots,is not at all obvious. Thereareinfinitely many differentshapesthat a mirror canhave, and at leasttwo differentcameramodels(perspecti ve and orthographicprojection)with which to combineeachmirror. Convex mirror",
"title": ""
},
{
"docid": "cd33484d27af2b500765af37a6f3aa17",
"text": "Tunneling nanotube (TNT)-like structures are intercellular membranous bridges that mediate the transfer of various cellular components including endocytic organelles. To gain further insight into the magnitude and mechanism of organelle transfer, we performed quantitative studies on the exchange of fluorescently labeled endocytic structures between normal rat kidney (NRK) cells. This revealed a linear increase in both the number of cells receiving organelles and the amount of transferred organelles per cell over time. The intercellular transfer of organelles was unidirectional, independent of extracellular diffusion, and sensitive to shearing force. In addition, during a block of endocytosis, a significant amount of transfer sustained. Fluorescence microscopy revealed TNT-like bridges between NRK cells containing F-actin but no microtubules. Depolymerization of F-actin led to the disappearance of TNT and a strong inhibition of organelle exchange. Partial ATP depletion did not affect the number of TNT but strongly reduced organelle transfer. Interestingly, the myosin II specific inhibitor S-(-)-blebbistatin strongly induced both organelle transfer and the number of TNT, while the general myosin inhibitor 2,3-butanedione monoxime induced the number of TNT but significantly inhibited transfer. Taken together, our data indicate a frequent and continuous exchange of endocytic organelles between cells via TNT by an actomyosin-dependent mechanism.",
"title": ""
},
{
"docid": "f26d34a762ce2c8ffd1c92ec0a86d56a",
"text": "Despite recent interest in digital fabrication, there are still few algorithms that provide control over how light propagates inside a solid object. Existing methods either work only on the surface or restrict themselves to light diffusion in volumes. We use multi-material 3D printing to fabricate objects with embedded optical fibers, exploiting total internal reflection to guide light inside an object. We introduce automatic fiber design algorithms together with new manufacturing techniques to route light between two arbitrary surfaces. Our implicit algorithm optimizes light transmission by minimizing fiber curvature and maximizing fiber separation while respecting constraints such as fiber arrival angle. We also discuss the influence of different printable materials and fiber geometry on light propagation in the volume and the light angular distribution when exiting the fiber. Our methods enable new applications such as surface displays of arbitrary shape, touch-based painting of surfaces, and sensing a hemispherical light distribution in a single shot.",
"title": ""
},
{
"docid": "ee1e2400ed5c944826747a8e616b18c1",
"text": "Metastasis remains the greatest challenge in the clinical management of cancer. Cell motility is a fundamental and ancient cellular behaviour that contributes to metastasis and is conserved in simple organisms. In this Review, we evaluate insights relevant to human cancer that are derived from the study of cell motility in non-mammalian model organisms. Dictyostelium discoideum, Caenorhabditis elegans, Drosophila melanogaster and Danio rerio permit direct observation of cells moving in complex native environments and lend themselves to large-scale genetic and pharmacological screening. We highlight insights derived from each of these organisms, including the detailed signalling network that governs chemotaxis towards chemokines; a novel mechanism of basement membrane invasion; the positive role of E-cadherin in collective direction-sensing; the identification and optimization of kinase inhibitors for metastatic thyroid cancer on the basis of work in flies; and the value of zebrafish for live imaging, especially of vascular remodelling and interactions between tumour cells and host tissues. While the motility of tumour cells and certain host cells promotes metastatic spread, the motility of tumour-reactive T cells likely increases their antitumour effects. Therefore, it is important to elucidate the mechanisms underlying all types of cell motility, with the ultimate goal of identifying combination therapies that will increase the motility of beneficial cells and block the spread of harmful cells.",
"title": ""
},
{
"docid": "ce99ce3fb3860e140164e7971291f0fa",
"text": "We describe the development and psychometric characteristics of the Generalized Workplace Harassment Questionnaire (GWHQ), a 29-item instrument developed to assess harassing experiences at work in five conceptual domains: verbal aggression, disrespect, isolation/exclusion, threats/bribes, and physical aggression. Over 1700 current and former university employees completed the GWHQ at three time points. Factor analytic results at each wave of data suggested a five-factor solution that did not correspond to the original five conceptual factors. We suggest a revised scoring scheme for the GWHQ utilizing four of the empirically extracted factors: covert hostility, verbal hostility, manipulation, and physical hostility. Covert hostility was the most frequently experienced type of harassment, followed by verbal hostility, manipulation, and physical hostility. Verbal hostility, covert hostility, and manipulation were found to be significant predictors of psychological distress.",
"title": ""
},
{
"docid": "e1f6e042174d5ca41445711a25903506",
"text": "We define and study the link prediction problem in bipartite networks, specializing general link prediction algorithms to the bipartite case. In a graph, a link prediction function of two vertices denotes the similarity or proximity of the vertices. Common link prediction functions for general graphs are defined using paths of length two between two nodes. Since in a bipartite graph adjacency vertices can only be connected by paths of odd lengths, these functions do not apply to bipartite graphs. Instead, a certain class of graph kernels (spectral transformation kernels) can be generalized to bipartite graphs when the positivesemidefinite kernel constraint is relaxed. This generalization is realized by the odd component of the underlying spectral transformation. This construction leads to several new link prediction pseudokernels such as the matrix hyperbolic sine, which we examine for rating graphs, authorship graphs, folksonomies, document–feature networks and other types of bipartite networks.",
"title": ""
},
{
"docid": "0f0799a04328852b8cfa742cbc2396c9",
"text": "Bitcoin does not scale, because its synchronization mechanism, the blockchain, limits the maximum rate of transactions the network can process. However, using off-blockchain transactions it is possible to create long-lived channels over which an arbitrary number of transfers can be processed locally between two users, without any burden to the Bitcoin network. These channels may form a network of payment service providers (PSPs). Payments can be routed between any two users in real time, without any confirmation delay. In this work we present a protocol for duplex micropayment channels, which guarantees end-to-end security and allow instant transfers, laying the foundation of the PSP network.",
"title": ""
},
{
"docid": "3cecab28e0cffd99338545dd2b633445",
"text": "After two decades of intensive development, 3-D integration has proven invaluable for allowing integrated circuits to adhere to Moore's Law without needing to continuously shrink feature sizes. The 3-D integration is also an enabling technology for hetero-integration of microelectromechanical systems (MEMS)/microsensors with different technologies, such as CMOS and optoelectronics. This 3-D hetero-integration allows for the development of highly integrated multifunctional microsystems with small footprints, low cost, and high performance demanded by emerging applications. This paper reviews the following aspects of the MEMS/microsensor-centered 3-D integration: fabrication technologies and processes, processing considerations and strategies for 3-D integration, integrated device configurations and wafer-level packaging, and applications and commercial MEMS/microsensor products using 3-D integration technologies. Of particular interest throughout this paper is the hetero-integration of the MEMS and CMOS technologies.",
"title": ""
},
{
"docid": "5d8c4cda10b47030e2a892a38abc7a2d",
"text": "Visual emotion recognition aims to associate images with appropriate emotions. There are different visual stimuli that can affect human emotion from low-level to high-level, such as color, texture, part, object, etc. However, most existing methods treat different levels of features as independent entity without having effective method for feature fusion. In this paper, we propose a unified CNNRNN model to predict the emotion based on the fused features from different levels by exploiting the dependency among them. Our proposed architecture leverages convolutional neural network (CNN) with multiple layers to extract different levels of features within a multi-task learning framework, in which two related loss functions are introduced to learn the feature representation. Considering the dependencies within the low-level and high-level features, a bidirectional recurrent neural network (RNN) is proposed to integrate the learned features from different layers in the CNN model. Extensive experiments on both Internet images and art photo datasets demonstrate that our method outperforms the state-of-the-art methods with at least 7% performance improvement.",
"title": ""
},
{
"docid": "829fcf6b704c62acb05c7399604faf78",
"text": "A method for estimating the range between moving vehicles by using a monocular camera is proposed. Although most conventional methods use vertical triangulation, the proposed method uses both vertical and horizontal triangulation, which reduces errors due to vehicle's own pitching in the far distance. Unknown vehicle width is estimated by measuring three ranging parameters associated with an image captured by the camera, and the following distance is then computed by horizontal triangulation. Both vehicle width and following distance are dynamically updated during the vehicle-tracking process by single filtering. The proposed method runs in real time and can produce highly accurate estimation of following distance. The key contribution of this study is the coupled estimation of unknown vehicle width and following distance by sequential Bayesian estimation.",
"title": ""
},
{
"docid": "f47fcbd6412384b85ef458fd3e6b27f3",
"text": "In this paper, we consider positioning with observed-time-difference-of-arrival (OTDOA) for a device deployed in long-term-evolution (LTE) based narrow-band Internet-of-things (NB-IoT) systems. We propose an iterative expectation- maximization based successive interference cancellation (EM-SIC) algorithm to jointly consider estimations of residual frequency- offset (FO), fading-channel taps and time-of- arrival (ToA) of the first arrival-path for each of the detected cells. In order to design a low complexity ToA detector and also due to the limits of low-cost analog circuits, we assume an NB-IoT device working at a low-sampling rate such as 1.92 MHz or lower. The proposed EM-SIC algorithm comprises two stages to detect ToA, based on which OTDOA can be calculated. In a first stage, after running the EM-SIC block a predefined number of iterations, a coarse ToA is estimated for each of the detected cells. Then in a second stage, to improve the ToA resolution, a low-pass filter is utilized to interpolate the correlations of time-domain PRS signal evaluated at a low sampling-rate to a high sampling-rate such as 30.72 MHz. To keep low-complexity, only the correlations inside a small search window centered at the coarse ToA estimates are upsampled. Then, the refined ToAs are estimated based on upsampled correlations. If at least three cells are detected, with OTDOA and the locations of detected cell sites, the position of the NB-IoT device can be estimated. We show through numerical simulations that, the proposed EM-SIC based ToA detector is robust against impairments introduced by inter-cell interference, fading-channel and residual FO. Thus significant signal-to-noise (SNR) gains are obtained over traditional ToA detectors that do not consider these impairments when positioning a device.",
"title": ""
},
{
"docid": "8113dd93f64323c2c02292b7cb28139b",
"text": "Current statistical language modeling techniques, including deep-learning based models, have proven to be quite effective for source code. We argue here that the special properties of source code can be exploited for further improvements. In this work, we enhance established language modeling approaches to handle the special challenges of modeling source code, such as: frequent changes, larger, changing vocabularies, deeply nested scopes, etc. We present a fast, nested language modeling toolkit specifically designed for software, with the ability to add & remove text, and mix & swap out many models. Specifically, we improve upon prior cache-modeling work and present a model with a much more expansive, multi-level notion of locality that we show to be well-suited for modeling software. We present results on varying corpora in comparison with traditional N-gram, as well as RNN, and LSTM deep-learning language models, and release all our source code for public use. Our evaluations suggest that carefully adapting N-gram models for source code can yield performance that surpasses even RNN and LSTM based deep-learning models.",
"title": ""
}
] |
scidocsrr
|
656b9050e1363c9eaaf9703e9b39b5cd
|
Predicting subscriber dissatisfaction and improving retention in the wireless telecommunications industry
|
[
{
"docid": "00ea9078f610b14ed0ed00ed6d0455a7",
"text": "Boosting is a general method for improving the performance of learning algorithms. A recently proposed boosting algorithm, Ada Boost, has been applied with great success to several benchmark machine learning problems using mainly decision trees as base classifiers. In this article we investigate whether Ada Boost also works as well with neural networks, and we discuss the advantages and drawbacks of different versions of the Ada Boost algorithm. In particular, we compare training methods based on sampling the training set and weighting the cost function. The results suggest that random resampling of the training data is not the main explanation of the success of the improvements brought by Ada Boost. This is in contrast to bagging, which directly aims at reducing variance and for which random resampling is essential to obtain the reduction in generalization error. Our system achieves about 1.4 error on a data set of on-line handwritten digits from more than 200 writers. A boosted multilayer network achieved 1.5 error on the UCI letters and 8.1 error on the UCI satellite data set, which is significantly better than boosted decision trees.",
"title": ""
}
] |
[
{
"docid": "38c9cee29ef1ba82e45556d87de1ff24",
"text": "This paper presents a detailed characterization of the Hokuyo URG-04LX 2D laser range finder. While the sensor specifications only provide a rough estimation of the sensor accuracy, the present work analyzes issues such as time drift effects and dependencies on distance, target properties (color, brightness and material) as well as incidence angle. Since the sensor is intended to be used for measurements of a tubelike environment on an inspection robot, the characterization is extended by investigating the influence of the sensor orientation and dependency on lighting conditions. The sensor characteristics are compared to those of the Sick LMS 200 which is commonly used in robotic applications when size and weight are not critical constraints. The results show that the sensor accuracy is strongly depending on the target properties (color, brightness, material) and that it is consequently difficult to establish a calibration model. The paper also identifies cases for which the sensor returns faulty measurements, mainly when the surface has low reflectivity (dark surfaces, foam) or for high incidence angles on shiny surfaces. On the other hand, the repeatability of the sensor seems to be competitive with the LMS 200.",
"title": ""
},
{
"docid": "a71d0d3748f6be2adbd48ab7671dd9f8",
"text": "Considerable overlap has been identified in the risk factors, comorbidities and putative pathophysiological mechanisms of Alzheimer disease and related dementias (ADRDs) and type 2 diabetes mellitus (T2DM), two of the most pressing epidemics of our time. Much is known about the biology of each condition, but whether T2DM and ADRDs are parallel phenomena arising from coincidental roots in ageing or synergistic diseases linked by vicious pathophysiological cycles remains unclear. Insulin resistance is a core feature of T2DM and is emerging as a potentially important feature of ADRDs. Here, we review key observations and experimental data on insulin signalling in the brain, highlighting its actions in neurons and glia. In addition, we define the concept of 'brain insulin resistance' and review the growing, although still inconsistent, literature concerning cognitive impairment and neuropathological abnormalities in T2DM, obesity and insulin resistance. Lastly, we review evidence of intrinsic brain insulin resistance in ADRDs. By expanding our understanding of the overlapping mechanisms of these conditions, we hope to accelerate the rational development of preventive, disease-modifying and symptomatic treatments for cognitive dysfunction in T2DM and ADRDs alike.",
"title": ""
},
{
"docid": "180a271a86f9d9dc71cc140096d08b2f",
"text": "This communication demonstrates for the first time the capability to independently control the real and imaginary parts of the complex propagation constant in planar, printed circuit board compatible leaky-wave antennas. The structure is based on a half-mode microstrip line which is loaded with an additional row of periodic metallic posts, resulting in a substrate integrated waveguide SIW with one of its lateral electric walls replaced by a partially reflective wall. The radiation mechanism is similar to the conventional microstrip leaky-wave antenna operating in its first higher-order mode, with the novelty that the leaky-mode leakage rate can be controlled by virtue of a sparse row of metallic vias. For this topology it is demonstrated that it is possible to independently control the antenna pointing angle and main lobe beamwidth while achieving high radiation efficiencies, thus providing low-cost, low-profile, simply fed, and easily integrable leaky-wave solutions for high-gain frequency beam-scanning applications. Several prototypes operating at 15 GHz have been designed, simulated, manufactured and tested, to show the operation principle and design flexibility of this one dimensional leaky-wave antenna.",
"title": ""
},
{
"docid": "9a65a5c09df7e34383056509d96e772d",
"text": "With explosive growth of Android malware and due to its damage to smart phone users (e.g., stealing user credentials, resource abuse), Android malware detection is one of the cyber security topics that are of great interests. Currently, the most significant line of defense against Android malware is anti-malware software products, such as Norton, Lookout, and Comodo Mobile Security, which mainly use the signature-based method to recognize threats. However, malware attackers increasingly employ techniques such as repackaging and obfuscation to bypass signatures and defeat attempts to analyze their inner mechanisms. The increasing sophistication of Android malware calls for new defensive techniques that are harder to evade, and are capable of protecting users against novel threats. In this paper, we propose a novel dynamic analysis method named Component Traversal that can automatically execute the code routines of each given Android application (app) as completely as possible. Based on the extracted Linux kernel system calls, we further construct the weighted directed graphs and then apply a deep learning framework resting on the graph based features for newly unknown Android malware detection. A comprehensive experimental study on a real sample collection from Comodo Cloud Security Center is performed to compare various malware detection approaches. Promising experimental results demonstrate that our proposed method outperforms other alternative Android malware detection techniques. Our developed system Deep4MalDroid has also been integrated into a commercial Android anti-malware software.",
"title": ""
},
{
"docid": "9365a612900a8bf0ddef8be6ec17d932",
"text": "Stabilization exercise program has become the most popular treatment method in spinal rehabilitation since it has shown its effectiveness in some aspects related to pain and disability. However, some studies have reported that specific exercise program reduces pain and disability in chronic but not in acute low back pain, although it can be helpful in the treatment of acute low back pain by reducing recurrence rate (Ferreira et al., 2006).",
"title": ""
},
{
"docid": "4e2bfd87acf1287f36694634a6111b3f",
"text": "This paper presents a model for managing departure aircraft at the spot or gate on the airport surface. The model is applied over two time frames: long term (one hour in future) for collaborative decision making, and short term (immediate) for decisions regarding the release of aircraft. The purpose of the model is to provide the controller a schedule of spot or gate release times optimized for runway utilization. This model was tested in nominal and heavy surface traffic scenarios in a simulated environment, and results indicate average throughput improvement of 10% in high traffic scenarios even with up to two minutes of uncertainty in spot arrival times.",
"title": ""
},
{
"docid": "6e0a19a9bc744aa05a64bd7450cc4c1b",
"text": "The success of deep neural networks hinges on our ability to accurately and efficiently optimize high-dimensional, non-convex functions. In this paper, we empirically investigate the loss functions of state-of-the-art networks, and how commonlyused stochastic gradient descent variants optimize these loss functions. To do this, we visualize the loss function by projecting them down to low-dimensional spaces chosen based on the convergence points of different optimization algorithms. Our observations suggest that optimization algorithms encounter and choose different descent directions at many saddle points to find different final weights. Based on consistency we observe across re-runs of the same stochastic optimization algorithm, we hypothesize that each optimization algorithm makes characteristic choices at these saddle points.",
"title": ""
},
{
"docid": "1d5119a4aeb7d678b58fb4e55c43fe94",
"text": "This chapter provides a simplified introduction to cloud computing. This chapter starts by introducing the history of cloud computing and moves on to describe the cloud architecture and operation. This chapter also discusses briefly cloud servicemodels: Infrastructure-as-a-Service, Platform-as-a-Service, and Software-as-a-Service. Clouds are also categorized based on their ownership to private and public clouds. This chapter concludes by explaining the reasons for choosing cloud computing over other technologies by exploring the economic and technological benefits of the cloud.",
"title": ""
},
{
"docid": "07175075dad32287a7dabf3d852f729a",
"text": "This paper is intended as a tutorial overview of induction motors signature analysis as a medium for fault detection. The purpose is to introduce in a concise manner the fundamental theory, main results, and practical applications of motor signature analysis for the detection and the localization of abnormal electrical and mechanical conditions that indicate, or may lead to, a failure of induction motors. The paper is focused on the so-called motor current signature analysis which utilizes the results of spectral analysis of the stator current. The paper is purposefully written without “state-of-the-art” terminology for the benefit of practicing engineers in facilities today who may not be familiar with signal processing.",
"title": ""
},
{
"docid": "9e7fc71def2afc58025ff5e0198148d0",
"text": "BACKGROUD\nWith the advent of modern computing methods, modeling trial-to-trial variability in biophysical recordings including electroencephalography (EEG) has become of increasingly interest. Yet no widely used method exists for comparing variability in ordered collections of single-trial data epochs across conditions and subjects.\n\n\nNEW METHOD\nWe have developed a method based on an ERP-image visualization tool in which potential, spectral power, or some other measure at each time point in a set of event-related single-trial data epochs are represented as color coded horizontal lines that are then stacked to form a 2-D colored image. Moving-window smoothing across trial epochs can make otherwise hidden event-related features in the data more perceptible. Stacking trials in different orders, for example ordered by subject reaction time, by context-related information such as inter-stimulus interval, or some other characteristic of the data (e.g., latency-window mean power or phase of some EEG source) can reveal aspects of the multifold complexities of trial-to-trial EEG data variability.\n\n\nRESULTS\nThis study demonstrates new methods for computing and visualizing 'grand' ERP-image plots across subjects and for performing robust statistical testing on the resulting images. These methods have been implemented and made freely available in the EEGLAB signal-processing environment that we maintain and distribute.",
"title": ""
},
{
"docid": "073cd7c54b038dcf69ae400f97a54337",
"text": "Interventions to support children with autism often include the use of visual supports, which are cognitive tools to enable learning and the production of language. Although visual supports are effective in helping to diminish many of the challenges of autism, they are difficult and time-consuming to create, distribute, and use. In this paper, we present the results of a qualitative study focused on uncovering design guidelines for interactive visual supports that would address the many challenges inherent to current tools and practices. We present three prototype systems that address these design challenges with the use of large group displays, mobile personal devices, and personal recording technologies. We also describe the interventions associated with these prototypes along with the results from two focus group discussions around the interventions. We present further design guidance for visual supports and discuss tensions inherent to their design.",
"title": ""
},
{
"docid": "df9acaed8dbcfbd38a30e4e1fa77aa8a",
"text": "Recent object detection systems rely on two critical steps: (1) a set of object proposals is predicted as efficiently as possible, and (2) this set of candidate proposals is then passed to an object classifier. Such approaches have been shown they can be fast, while achieving the state of the art in detection performance. In this paper, we propose a new way to generate object proposals, introducing an approach based on a discriminative convolutional network. Our model is trained jointly with two objectives: given an image patch, the first part of the system outputs a class-agnostic segmentation mask, while the second part of the system outputs the likelihood of the patch being centered on a full object. At test time, the model is efficiently applied on the whole test image and generates a set of segmentation masks, each of them being assigned with a corresponding object likelihood score. We show that our model yields significant improvements over state-of-theart object proposal algorithms. In particular, compared to previous approaches, our model obtains substantially higher object recall using fewer proposals. We also show that our model is able to generalize to unseen categories it has not seen during training. Unlike all previous approaches for generating object masks, we do not rely on edges, superpixels, or any other form of low-level segmentation.",
"title": ""
},
{
"docid": "56826bfc5f48105387fd86cc26b402f1",
"text": "It is difficult to identify sentence importance from a single point of view. In this paper, we propose a learning-based approach to combine various sentence features. They are categorized as surface, content, relevance and event features. Surface features are related to extrinsic aspects of a sentence. Content features measure a sentence based on contentconveying words. Event features represent sentences by events they contained. Relevance features evaluate a sentence from its relatedness with other sentences. Experiments show that the combined features improved summarization performance significantly. Although the evaluation results are encouraging, supervised learning approach requires much labeled data. Therefore we investigate co-training by combining labeled and unlabeled data. Experiments show that this semisupervised learning approach achieves comparable performance to its supervised counterpart and saves about half of the labeling time cost.",
"title": ""
},
{
"docid": "dd9edd37ff5f4cb332fcb8a0ef86323e",
"text": "This paper proposes several nonlinear control strategies for trajectory tracking of a quadcopter system based on the property of differential flatness. Its originality is twofold. Firstly, it provides a flat output for the quadcopter dynamics capable of creating full flat parametrization of the states and inputs. Moreover, B-splines characterizations of the flat output and their properties allow for optimal trajectory generation subject to way-point constraints. Secondly, several control strategies based on computed torque control and feedback linearization are presented and compared. The advantages of flatness within each control strategy are analyzed and detailed through extensive simulation results.",
"title": ""
},
{
"docid": "8e3bf062119c6de9fa5670ce4b00764b",
"text": "Heating red phosphorus in sealed ampoules in the presence of a Sn/SnI4 catalyst mixture has provided bulk black phosphorus at much lower pressures than those required for allotropic conversion by anvil cells. Herein we report the growth of ultra-long 1D red phosphorus nanowires (>1 mm) selectively onto a wafer substrate from red phosphorus powder and a thin film of red phosphorus in the present of a Sn/SnI4 catalyst. Raman spectra and X-ray diffraction characterization suggested the formation of crystalline red phosphorus nanowires. FET devices constructed with the red phosphorus nanowires displayed a typical I-V curve similar to that of black phosphorus and a similar mobility reaching 300 cm(2) V(-1) s with an Ion /Ioff ratio approaching 10(2) . A significant response to infrared light was observed from the FET device.",
"title": ""
},
{
"docid": "1bf801e8e0348ccd1e981136f604dd18",
"text": "Sketch recognition is one of the integral components used by law enforcement agencies in solving crime. In recent past, software generated composite sketches are being preferred as they are more consistent and faster to construct than hand drawn sketches. Matching these composite sketches to face photographs is a complex task because the composite sketches are drawn based on the witness description and lack minute details which are present in photographs. This paper presents a novel algorithm for matching composite sketches with photographs using transfer learning with deep learning representation. In the proposed algorithm, first the deep learning architecture based facial representation is learned using large face database of photos and then the representation is updated using small problem-specific training database. Experiments are performed on the extended PRIP database and it is observed that the proposed algorithm outperforms recently proposed approach and a commercial face recognition system.",
"title": ""
},
{
"docid": "11e666f5b8746ea4b6fc6d4467295e61",
"text": "It is shown that by combining the osmotic pressure and rate of diffusion laws an equation can be derived for the kinetics of osmosis. The equation has been found to agree with experiments on the rate of osmosis for egg albumin and gelatin solutions with collodion membranes.",
"title": ""
},
{
"docid": "1d41e6f55521cdba4fc73febd09d2eb4",
"text": "1.",
"title": ""
},
{
"docid": "3b4622a4ad745fc0ffb3b6268eb969fa",
"text": "Eruptive syringomas: unresponsiveness to oral isotretinoin A 22-year-old man of Egyptian origin was referred to our department due to exacerbation of pruritic pre-existing papular dermatoses. The skin lesions had been present since childhood. The family history was negative for a similar condition. The patient complained of exacerbation of the pruritus during physical activity under a hot climate and had moderate to severe pruritus during his work. Physical examination revealed multiple reddish-brownish smooth-surfaced, symmetrically distributed papules 2–4 mm in diameter on the patient’s trunk, neck, axillae, and limbs (Fig. 1). The rest of the physical examination was unremarkable. The Darier sign was negative. A skin biopsy was obtained from a representative lesion on the trunk. Histopathologic examination revealed a small, wellcircumscribed neoplasm confined to the upper dermis, composed of small solid and ductal structures relatively evenly distributed in a sclerotic collagenous stroma. The solid elements were of various shapes (round, oval, curvilinear, “comma-like,” or “tadpole-like”) (Fig. 2). These microscopic features and the clinical presentation were consistent with the diagnosis of eruptive syringomas. Our patient was treated with a short course of oral antihistamines without any effect and subsequently with low-dose isotretinoin (10 mg/day) for 5 months. No improvement of the skin eruption was observed while cessation of the pruritus was accomplished. Syringoma is a common adnexal tumor with differentiation towards eccrine acrosyringium composed of small solid and ductal elements embedded in a sclerotic stroma and restricted as a rule to the upper to mid dermis, usually presenting clinically as multiple lesions on the lower eyelids and cheeks of adolescent females. A much less common variant is the eruptive or disseminated syringomas, which involve primarily young women. Eruptive syringomas are characterized by rapid development during a short period of time of hundreds of small (1–5 mm), ill-defined, smooth surfaced, skin-colored, pink, yellowish, or brownish papules typically involving the face, trunk, genitalia, pubic area, and extremities but can occur principally in any site where eccrine glands are found. The pathogenesis of eruptive syringoma remains unclear. Some authors have recently challenged the traditional notion that eruptive syringomas are neoplastic lesions. Chandler and Bosenberg presented evidence that eruptive syringomas result from autoimmune destruction of the acrosyringium and proposed the term autoimmune acrosyringitis with ductal cysts. Garrido-Ruiz et al. support the theory that eruptive syringomas may represent a hyperplastic response of the eccrine duct to an inflammatory reaction. In a recent systematic review by Williams and Shinkai the strongest association of syringomas was with Down’s syndrome (183 reported cases, 22.2%). Syringomas are also associated with diabetes mellitus (17 reported cases, 2.1%), Ehlers–Danlos",
"title": ""
},
{
"docid": "161e9a2b7a6783b57ce47bb8e100a80d",
"text": "Distributed storage systems provide large-scale data storage services, yet they are confronted with frequent node failures. To ensure data availability, a storage system often introduces data redundancy via replication or erasure coding. As erasure coding incurs significantly less redundancy overhead than replication under the same fault tolerance, it has been increasingly adopted in large-scale storage systems. In erasure-coded storage systems, degraded reads to temporarily unavailable data are very common, and hence boosting the performance of degraded reads becomes important. One challenge is that storage nodes tend to be heterogeneous with different storage capacities and I/O bandwidths. To this end, we propose FastDR, a system that addresses node heterogeneity and exploits I/O parallelism, so as to boost the performance of degraded reads to temporarily unavailable data. FastDR incorporates a greedy algorithm that seeks to reduce the data transfer cost of reading surviving data for degraded reads, while allowing the search of the efficient degraded read solution to be completed in a timely manner. We implement a FastDR prototype, and conduct extensive evaluation through simulation studies as well as testbed experiments on a Hadoop cluster with 10 storage nodes. We demonstrate that our FastDR achieves efficient degraded reads compared to existing approaches.",
"title": ""
}
] |
scidocsrr
|
bb78bd4ac5f73bbd64ad505fea91284a
|
Ensuring the Quality of the Findings of Qualitative Research : Looking at Trustworthiness Criteria
|
[
{
"docid": "db5ff75a7966ec6c1503764d7e510108",
"text": "Qualitative content analysis as described in published literature shows conflicting opinions and unsolved issues regarding meaning and use of concepts, procedures and interpretation. This paper provides an overview of important concepts (manifest and latent content, unit of analysis, meaning unit, condensation, abstraction, content area, code, category and theme) related to qualitative content analysis; illustrates the use of concepts related to the research procedure; and proposes measures to achieve trustworthiness (credibility, dependability and transferability) throughout the steps of the research procedure. Interpretation in qualitative content analysis is discussed in light of Watzlawick et al.'s [Pragmatics of Human Communication. A Study of Interactional Patterns, Pathologies and Paradoxes. W.W. Norton & Company, New York, London] theory of communication.",
"title": ""
}
] |
[
{
"docid": "c197fcf3042099003f3ed682f7b7f19c",
"text": "Interaction graphs are ubiquitous in many fields such as bioinformatics, sociology and physical sciences. There have been many studies in the literature targeted at studying and mining these graphs. However, almost all of them have studied these graphs from a static point of view. The study of the evolution of these graphs over time can provide tremendous insight on the behavior of entities, communities and the flow of information among them. In this work, we present an event-based characterization of critical behavioral patterns for temporally varying interaction graphs. We use non-overlapping snapshots of interaction graphs and develop a framework for capturing and identifying interesting events from them. We use these events to characterize complex behavioral patterns of individuals and communities over time. We demonstrate the application of behavioral patterns for the purposes of modeling evolution, link prediction and influence maximization. Finally, we present a diffusion model for evolving networks, based on our framework.",
"title": ""
},
{
"docid": "8733daeee2dd85345ce115cb1366f4b2",
"text": "We propose an interactive model, RuleViz, for visualizing the entire process of knowledge discovery and data mining. The model consists of ve components according to the main ingredients of the knowledge discovery process: original data visualization, visual data reduction, visual data preprocess, visual rule discovery, and rule visualization. The RuleViz model for visualizing the process of knowledge discovery is introduced and each component is discussed. Two aspects are emphasized, human-machine interaction and process visualization. The interaction helps the KDD system navigate through the enormous search spaces and recognize the intentions of the user, and the visualization of the KDD process helps users gain better insight into the multidimensional data, understand the intermediate results, and interpret the discovered patterns. According to the RuleViz model, we implement an interactive system, CViz, which exploits \\parallel coordinates\" technique to visualize the process of rule induction. The original data is visualized on the parallel coordinates, and can be interactively reduced both horizontally and vertically. Three approaches for discretizing numerical attributes are provided in the visual data preprocessing. CViz learns classi cation rules on the basis of a rule induction algorithm and presents the result as the algorithm proceeds. The discovered rules are nally visualized on the parallel coordinates with each rule being displayed as a directed \\polygon\", and the rule accuracy and quality are used to render the \\polygons\" and control the choice of rules to be displayed to avoid clutter. The CViz system has been experimented with the UCI data sets and synthesis data sets, and the results demonstrate that the RuleViz model and the implemented visualization system are useful and helpful for understanding the process of knowledge discovery and interpreting the nal results.",
"title": ""
},
{
"docid": "97f058025a32926262b3c141b9b63da1",
"text": "In this paper, a Stacked Sparse Autoencoder (SSAE) based framework is presented for nuclei classification on breast cancer histopathology. SSAE works very well in learning useful high-level feature for better representation of input raw data. To show the effectiveness of proposed framework, SSAE+Softmax is compared with conventional Softmax classifier, PCA+Softmax, and single layer Sparse Autoencoder (SAE)+Softmax in classifying the nuclei and non-nuclei patches extracted from breast cancer histopathology. The SSAE+Softmax for nuclei patch classification yields an accuracy of 83.7%, F1 score of 82%, and AUC of 0.8992, which outperform Softmax classifier, PCA+Softmax, and SAE+Softmax.",
"title": ""
},
{
"docid": "033ee0637607fec8ae1b5834efe355dc",
"text": "We propose a new task-specification language for Markov decision processes that is designed to be an improvement over reward functions by being environment independent. The language is a variant of Linear Temporal Logic (LTL) that is extended to probabilistic specifications in a way that permits approximations to be learned in finite time. We provide several small environments that demonstrate the advantages of our geometric LTL (GLTL) language and illustrate how it can be used to specify standard reinforcementlearning tasks straightforwardly.",
"title": ""
},
{
"docid": "b4123a29a617b7a531d637f8c988b9a4",
"text": "We present a method for contouring an implicit function using a grid topologically dual to structured grids such as octrees. By aligning the vertices of the dual grid with the features of the implicit function, we are able to reproduce thin features of the extracted surface without excessive subdivision required by methods such as marching cubes or dual contouring. Dual marching cubes produces a crack-free, adaptive polygonalization of the surface that reproduces sharp features. Our approach maintains the advantage of using structured grids for operations such as CSG while being able to conform to the relevant features of the implicit function yielding much sparser polygonalizations than has been possible using structured grids.",
"title": ""
},
{
"docid": "7d78ca30853ed8a84bbb56fe82e3b9ba",
"text": "Deep belief networks (DBN) have shown impressive improvements over Gaussian mixture models for automatic speech recognition. In this work we use DBNs for audio-visual speech recognition; in particular, we use deep learning from audio and visual features for noise robust speech recognition. We test two methods for using DBNs in a multimodal setting: a conventional decision fusion method that combines scores from single-modality DBNs, and a novel feature fusion method that operates on mid-level features learned by the single-modality DBNs. On a continuously spoken digit recognition task, our experiments show that these methods can reduce word error rate by as much as 21% relative over a baseline multi-stream audio-visual GMM/HMM system.",
"title": ""
},
{
"docid": "a8fd046fb4652814c852113684a152aa",
"text": "Policy gradients methods often achieve better performance when the change in policy is limited to a small Kullback-Leibler divergence. We derive policy gradients where the change in policy is limited to a small Wasserstein distance (or trust region). This is done in the discrete and continuous multi-armed bandit settings with entropy regularisation. We show that in the small steps limit with respect to the Wasserstein distance W2, policy dynamics are governed by the heat equation, following the Jordan-Kinderlehrer-Otto result. This means that policies undergo diffusion and advection, concentrating near actions with high reward. This helps elucidate the nature of convergence in the probability matching setup, and provides justification for empirical practices such as Gaussian policy priors and additive gradient noise.",
"title": ""
},
{
"docid": "3433b283726a7e95ba5cb2a3c97cd195",
"text": "Black silicon (BSi) represents a very active research area in renewable energy materials. The rise of BSi as a focus of study for its fundamental properties and potentially lucrative practical applications is shown by several recent results ranging from solar cells and light-emitting devices to antibacterial coatings and gas-sensors. In this paper, the common BSi fabrication techniques are first reviewed, including electrochemical HF etching, stain etching, metal-assisted chemical etching, reactive ion etching, laser irradiation and the molten salt Fray-Farthing-Chen-Cambridge (FFC-Cambridge) process. The utilization of BSi as an anti-reflection coating in solar cells is then critically examined and appraised, based upon strategies towards higher efficiency renewable solar energy modules. Methods of incorporating BSi in advanced solar cell architectures and the production of ultra-thin and flexible BSi wafers are also surveyed. Particular attention is given to routes leading to passivated BSi surfaces, which are essential for improving the electrical properties of any devices incorporating BSi, with a special focus on atomic layer deposition of Al2O3. Finally, three potential research directions worth exploring for practical solar cell applications are highlighted, namely, encapsulation effects, the development of micro-nano dual-scale BSi, and the incorporation of BSi into thin solar cells. It is intended that this paper will serve as a useful introduction to this novel material and its properties, and provide a general overview of recent progress in research currently being undertaken for renewable energy applications.",
"title": ""
},
{
"docid": "f355ed837561186cff4e7492470d6ae7",
"text": "Notions of Bayesian analysis are reviewed, with emphasis on Bayesian modeling and Bayesian calculation. A general hierarchical model for time series analysis is then presented and discussed. Both discrete time and continuous time formulations are discussed. An brief overview of generalizations of the fundamental hierarchical time series model concludes the article. Much of the Bayesian viewpoint can be argued (as by Jeereys and Jaynes, for examples) as direct application of the theory of probability. In this article the suggested approach for the construction of Bayesian time series models relies on probability theory to provide decompositions of complex joint probability distributions. Speciically, I refer to the familiar factorization of a joint density into an appropriate product of conditionals. Let x and y represent two random variables. I will not diierentiate between random variables and their realizations. Also, I will use an increasingly popular generic notation for probability densities: x] represents the density of x, xjy] is the conditional density of x given y, and x; y] denotes the joint density of x and y. In this notation we can write \\Bayes's Theorem\" as yjx] = xjy]]y]=x]: (1) y",
"title": ""
},
{
"docid": "e6088779901bd4bfaf37a3a1784c3854",
"text": "There has been recently a great progress in the field of automatically generated knowledge bases and corresponding disambiguation systems that are capable of mapping text mentions onto canonical entities. Efforts like the before mentioned have enabled researchers and analysts from various disciplines to semantically “understand” contents. However, most of the approaches have been specifically designed for the English language and in particular support for Arabic is still in its infancy. Since the amount of Arabic Web contents (e.g. in social media) has been increasing dramatically over the last years, we see a great potential for endeavors that support an entity-level analytics of these data. To this end, we have developed a framework called AIDArabic that extends the existing AIDA system by additional components that allow the disambiguation of Arabic texts based on an automatically generated knowledge base distilled from Wikipedia. Even further, we overcome the still existing sparsity of the Arabic Wikipedia by exploiting the interwiki links between Arabic and English contents in Wikipedia, thus, enriching the entity catalog as well as disambiguation context.",
"title": ""
},
{
"docid": "6cf4994b5ed0e17885f229856b7cd58d",
"text": "Recently Neural Architecture Search (NAS) has aroused great interest in both academia and industry, however it remains challenging because of its huge and non-continuous search space. Instead of applying evolutionary algorithm or reinforcement learning as previous works, this paper proposes a Direct Sparse Optimization NAS (DSO-NAS) method. In DSO-NAS, we provide a novel model pruning view to NAS problem. In specific, we start from a completely connected block, and then introduce scaling factors to scale the information flow between operations. Next, we impose sparse regularizations to prune useless connections in the architecture. Lastly, we derive an efficient and theoretically sound optimization method to solve it. Our method enjoys both advantages of differentiability and efficiency, therefore can be directly applied to large datasets like ImageNet. Particularly, On CIFAR-10 dataset, DSO-NAS achieves an average test error 2.84%, while on the ImageNet dataset DSO-NAS achieves 25.4% test error under 600M FLOPs with 8 GPUs in 18 hours.",
"title": ""
},
{
"docid": "b9daaabfc245958b9dee7d4910e80431",
"text": "Strawberry fruits are highly valued for their taste and nutritional value. However, results describing the bioaccessibility and intestinal absorption of phenolic compounds from strawberries are still scarce. In our study, a combined in vitro digestion/Caco-2 absorption model was used to mimic physiological conditions in the gastrointestinal track and identify compounds transported across intestinal epithelium. In the course of digestion, the loss of anthocyanins was noted whilst pelargonidin-3-glucoside remained the most abundant compound, amounting to nearly 12 mg per 100 g of digested strawberries. Digestion increased the amount of ellagic acid available by nearly 50%, probably due to decomposition of ellagitannins. Only trace amounts of pelargonidin-3-glucoside were found to be absorbed in the intestine model. Dihydrocoumaric acid sulphate and p-coumaric acid were identified as metabolites formed in enterocytes and released at the serosal side of the model.",
"title": ""
},
{
"docid": "5b759f2d581a8940127b5e45019039d7",
"text": "The structure of the domain name is highly relevant for providing insights into the management, organization and operation of a given enterprise. Security assessment and network penetration testing are using information sourced from the DNS service in order to map the network, perform reconnaissance tasks, identify services and target individual hosts. Tracking the domain names used by popular Botnets is another major application that needs to undercover their underlying DNS structure. Current approaches for this purpose are limited to simplistic brute force scanning or reverse DNS, but these are unreliable. Brute force attacks depend of a huge list of known words and thus, will not work against unknown names, while reverse DNS is not always setup or properly configured. In this paper, we address the issue of fast and efficient generation of DNS names and describe practical experiences against real world large scale DNS names. Our approach is based on techniques derived from natural language modeling and leverage Markov Chain Models in order to build the first DNS scanner (SDBF) that is leveraging both, training and advanced language modeling approaches.",
"title": ""
},
{
"docid": "7562d0fefa669d481b55e059085cd7de",
"text": "Security and privacy are huge challenges in Internet of Things (IoT) environments, but unfortunately, the harmonization of the IoT-related standards and protocols is hardly and slowly widespread. In this paper, we propose a new framework for access control in IoT based on the blockchain technology. Our first contribution consists in providing a reference model for our proposed framework within the Objectives, Models, Architecture and Mechanism specification in IoT. In addition, we introduce FairAccess as a fully decentralized pseudonymous and privacy preserving authorization management framework that enables users to own and control their data. To implement our model, we use and adapt the blockchain into a decentralized access control manager. Unlike financial bitcoin transactions, FairAccess introduces new types of transactions that are used to grant, get, delegate, and revoke access. As a proof of concept, we establish an initial implementation with a Raspberry PI device and local blockchain. Finally, we discuss some limitations and propose further opportunities. Copyright © 2017 John Wiley & Sons, Ltd.",
"title": ""
},
{
"docid": "d68cd0d594f8db4a0decdbdf3656ece1",
"text": "In this paper we describe PRISM, a tool being developed at the University of Birmingham for the analysis of probabilistic systems. PRISM supports three probabilistic models: discrete-time Markov chains, continuous-time Markov chains and Markov decision processes. Analysis is performed through model checking such systems against specifications written in the probabilistic temporal logics PCTL and CSL. The tool features three model checking engines: one symbolic, using BDDs (binary decision diagrams) and MTBDDs (multi-terminal BDDs); one based on sparse matrices; and one which combines both symbolic and sparse matrix methods. PRISM has been successfully used to analyse probabilistic termination, performance, dependability and quality of service properties for a range of systems, including randomized distributed algorithms [2], polling systems [22], workstation clusters [18] and wireless cell communication [17].",
"title": ""
},
{
"docid": "d9599c4140819670a661bd4955680bb7",
"text": "The paper assesses the demand for rural electricity services and contrasts it with the technology options available for rural electrification. Decentralised Distributed Generation can be economically viable as reflected by case studies reported in literature and analysed in our field study. Project success is driven by economically viable technology choice; however it is largely contingent on organisational leadership and appropriate institutional structures. While individual leadership can compensate for deployment barriers, we argue that a large scale roll out of rural electrification requires an alignment of economic incentives and institutional structures to implement, operate and maintain the scheme. This is demonstrated with the help of seven case studies of projects across north India. 1 Introduction We explore the contribution that decentralised and renewable energy technologies can make to rural electricity supply in India. We take a case study approach, looking at seven sites across northern India where renewable energy technologies have been established to provide electrification for rural communities. We supplement our case studies with stakeholder interviews and household surveys, estimating levels of demand for electricity services from willingness and ability to pay. We also assess the overall viability of Distributed Decentralised Generation (DDG) projects by investigating the costs of implementation as well as institutional and organisational barriers to their operation and replication. Renewable energy technologies represent some of the most promising options available for distributed and decentralised electrification. Demand for reliable electricity services is significant. It represents a key driver behind economic development and raising basic standards of living. This is especially applicable to rural India home to 70% of the nation's population and over 25% of the world's poor. Access to reliable and affordable electricity can help support income-generating activity and allow utilisation of modern appliances and agricultural equipment whilst replacing inefficient and polluting kerosene lighting. Presently only around 55% of households are electrified (MOSPI 2006) leaving over 20 million households without power. The supply of electricity across India currently lacks both quality and quantity with an extensive shortfall in supply, a poor record for outages, high levels of transmission and distribution (T&D) losses and an overall need for extended and improved infrastructure (GoI 2006). The Indian Government recently outlined an ambitious plan for 100% village level electrification by the end of 2007 and total household electrification by 2012. To achieve this, a major programme of grid extension and strengthening of the rural electricity infrastructure has been initiated under …",
"title": ""
},
{
"docid": "ba74ebfc0e164b1e6d08c1ac63e49538",
"text": "This chapter develops a unified framework for the study of how network interactions can function as a mechanism for propagation and amplification of microeconomic shocks. The framework nests various classes of games over networks, models of macroeconomic risk originating from microeconomic shocks, and models of financial interactions. Under the assumption that shocks are small, the authors provide a fairly complete characterization of the structure of equilibrium, clarifying the role of network interactions in translating microeconomic shocks into macroeconomic outcomes. This characterization provides a ranking of different networks in terms of their aggregate performance. It also sheds light on several seemingly contradictory results in the prior literature on the role of network linkages in fostering systemic risk.",
"title": ""
},
{
"docid": "31ed2186bcd711ac4a5675275cd458eb",
"text": "Location-aware wireless sensor networks will enable a new class of applications, and accurate range estimation is critical for this task. Low-cost location determination capability is studied almost entirely using radio frequency received signal strength (RSS) measurements, resulting in poor accuracy. More accurate systems use wide bandwidths and/or complex time-synchronized infrastructure. Low-cost, accurate ranging has proven difficult because small timing errors result in large range errors. This paper addresses estimation of the distance between wireless nodes using a two-way ranging technique that approaches the Cramér-Rao Bound on ranging accuracy in white noise and achieves 1-3 m accuracy in real-world ranging and localization experiments. This work provides an alternative to inaccurate RSS and complex, wide-bandwidth methods. Measured results using a prototype wireless system confirm performance in the real world.",
"title": ""
},
{
"docid": "457efc3b22084fd7221637bd574ff075",
"text": "Group-based trajectory models are used to investigate population differences in the developmental courses of behaviors or outcomes . This article demonstrates a new Stata command, traj, for fitting to longitudinal data finite (discrete) mixture models designed to identify clusters of individuals following similar progressions of some behavior or outcome over age or time. Censored normal, Poisson, zero-inflated Poisson, and Bernoulli distributions are supported. Applications to psychometric scale data, count data, and a dichotomous prevalence measure are illustrated. Introduction A developmental trajectory measures the course of an outcome over age or time. The study of developmental trajectories is a central theme of developmental and abnormal psychology and psychiatry, of life course studies in sociology and criminology, of physical and biological outcomes in medicine and gerontology. A wide variety of statistical methods are used to study these phenomena. This article demonstrates a Stata plugin for estimating group-based trajectory models. The Stata program we demonstrate adapts a well-established SAS-based procedure for estimating group-based trajectory model (Jones, Nagin, and Roeder, 2001; Jones and Nagin, 2007) to the Stata platform. Group-based trajectory modeling is a specialized form of finite mixture modeling. The method is designed identify groups of individuals following similarly developmental trajectories. For a recent review of applications of group-based trajectory modeling see Nagin and Odgers (2010) and for an extended discussion of the method, including technical details, see Nagin (2005). A Brief Overview of Group-Based Trajectory Modeling Using finite mixtures of suitably defined probability distributions, the group-based approach for modeling developmental trajectories is intended to provide a flexible and easily applied method for identifying distinctive clusters of individual trajectories within the population and for profiling the characteristics of individuals within the clusters. Thus, whereas the hierarchical and latent curve methodologies model population variability in growth with multivariate continuous distribution functions, the group-based approach utilizes a multinomial modeling strategy. Technically, the group-based trajectory model is an example of a finite mixture model. Maximum likelihood is used for the estimation of the model parameters. The maximization is performed using a general quasi-Newton procedure (Dennis, Gay, and Welsch 1981; Dennis and Mei 1979). The fundamental concept of interest is the distribution of outcomes conditional on age (or time); that is, the distribution of outcome trajectories denoted by ), | ( i i Age Y P where the random vector Yi represents individual i’s longitudinal sequence of behavioral outcomes and the vector Agei represents individual i’s age when each of those measurements is recorded. The group-based trajectory model assumes that the population distribution of trajectories arises from a finite mixture of unknown order J. The likelihood for each individual i, conditional on the number of groups J, may be written as 1 Trajectories can also be defined by time (e.g., time from treatment). 1 ( | ) ( | , ; ) (1), J j j i i i i j P Y Age P Y Age j where is the probability of membership in group j, and the conditional distribution of Yi given membership in j is indexed by the unknown parameter vector which among other things determines the shape of the group-specific trajectory. The trajectory is modeled with up to a 5 order polynomial function of age (or time). For given j, conditional independence is assumed for the sequential realizations of the elements of Yi , yit, over the T periods of measurement. Thus, we may write T i t j it it j i i j age y p j Age Y P ), 2 ( ) ; , | ( ) ; , | ( where p(.) is the distribution of yit conditional on membership in group j and the age of individual i at time t. 2 The software provides three alternative specifications of p(.): the censored normal distribution also known as the Tobit model, the zero-inflated Poisson distribution, and the binary logit distribution. The censored normal distribution is designed for the analysis of repeatedly measured, (approximately) continuous scales which may be censored by either a scale minimum or maximum or both (e.g., longitudinal data on a scale of depression symptoms). A special case is a scale or other outcome variable with no minimum or maximum. The zero-inflated Poisson distribution is designed for the analysis of longitudinal count data (e.g., arrests by age) and binary logit distribution for the analysis of longitudinal data on a dichotomous outcome variable (e.g., whether hospitalized in year t or not). The model also provides capacity for analyzing the effect of time-stable covariate effects on probability of group membership and the effect of time dependent covariates on the trajectory itself. Let i x denote a vector of time stable covariates thought to be associated with probability of trajectory group membership. Effects of time-stable covariates are modeled with a generalized logit function where without loss of generality :",
"title": ""
}
] |
scidocsrr
|
b41463572e012229b7cc2ae03accfe22
|
Performance of a Distribution Intelligent Universal Transformer under Source and Load Disturbances
|
[
{
"docid": "436a250dc621d58d70bee13fd3595f06",
"text": "The solid-state transformer allows add-on intelligence to enhance power quality compatibility between source and load. It is desired to demonstrate the benefits gained by the use of such a device. Recent advancement in semiconductor devices and converter topologies facilitated a newly proposed intelligent universal transformer (IUT), which can isolate a disturbance from either source or load. This paper describes the basic circuit and the operating principle for the multilevel converter based IUT and its applications for medium voltages. Various power quality enhancement features are demonstrated with computer simulation for a complete IUT circuit.",
"title": ""
}
] |
[
{
"docid": "f3860c0ed0803759e44133a0110a60bb",
"text": "Using comment information available from Digg we define a co-participation network between users. We focus on the analysis of this implicit network, and study the behavioral characteristics of users. Using an entropy measure, we infer that users at Digg are not highly focused and participate across a wide range of topics. We also use the comment data and social network derived features to predict the popularity of online content linked at Digg using a classification and regression framework. We show promising results for predicting the popularity scores even after limiting our feature extraction to the first few hours of comment activity that follows a Digg submission.",
"title": ""
},
{
"docid": "765e766515c9c241ffd2d84572fd887f",
"text": "The cost of reconciling consistency and state management with high availability is highly magnified by the unprecedented scale and robustness requirements of today’s Internet applications. We propose two strategies for improving overall availability using simple mechanisms that scale over large applications whose output behavior tolerates graceful degradation. We characterize this degradation in terms of harvest and yield, and map it directly onto engineering mechanisms that enhance availability by improving fault isolation, and in some cases also simplify programming. By collecting examples of related techniques in the literature and illustrating the surprising range of applications that can benefit from these approaches, we hope to motivate a broader research program in this area. 1. Motivation, Hypothesis, Relevance Increasingly, infrastructure services comprise not only routing, but also application-level resources such as search engines [15], adaptation proxies [8], and Web caches [20]. These applications must confront the same operational expectations and exponentially-growing user loads as the routing infrastructure, and consequently are absorbing comparable amounts of hardware and software. The current trend of harnessing commodity-PC clusters for scalability and availability [9] is reflected in the largest web server installations. These sites use tens to hundreds of PC’s to deliver 100M or more read-mostly page views per day, primarily using simple replication or relatively small data sets to increase throughput. The scale of these applications is bringing the wellknown tradeoff between consistency and availability [4] into very sharp relief. In this paper we propose two general directions for future work in building large-scale robust systems. Our approaches tolerate partial failures by emphasizing simple composition mechanisms that promote fault containment, and by translating possible partial failure modes into engineering mechanisms that provide smoothlydegrading functionality rather than lack of availability of the service as a whole. The approaches were developed in the context of cluster computing, where it is well accepted [22] that one of the major challenges is the nontrivial software engineering required to automate partial-failure handling in order to keep system management tractable. 2. Related Work and the CAP Principle In this discussion, strong consistency means singlecopy ACID [13] consistency; by assumption a stronglyconsistent system provides the ability to perform updates, otherwise discussing consistency is irrelevant. High availability is assumed to be provided through redundancy, e.g. data replication; data is considered highly available if a given consumer of the data can always reach some replica. Partition-resilience means that the system as whole can survive a partition between data replicas. Strong CAP Principle. Strong Consistency, High Availability, Partition-resilience: Pick at most 2. The CAP formulation makes explicit the trade-offs in designing distributed infrastructure applications. It is easy to identify examples of each pairing of CAP, outlining the proof by exhaustive example of the Strong CAP Principle: CA without P: Databases that provide distributed transactional semantics can only do so in the absence of a network partition separating server peers. CP without A: In the event of a partition, further transactions to an ACID database may be blocked until the partition heals, to avoid the risk of introducing merge conflicts (and thus inconsistency). AP without C: HTTP Web caching provides clientserver partition resilience by replicating documents, but a client-server partition prevents verification of the freshness of an expired replica. In general, any distributed database problem can be solved with either expiration-based caching to get AP, or replicas and majority voting to get PC (the minority is unavailable). In practice, many applications are best described in terms of reduced consistency or availability. For example, weakly-consistent distributed databases such as Bayou [5] provide specific models with well-defined consistency/availability tradeoffs; disconnected filesystems such as Coda [16] explicitly argued for availability over strong consistency; and expiration-based consistency mechanisms such as leases [12] provide fault-tolerant consistency management. These examples suggest that there is a Weak CAP Principle which we have yet to characterize precisely: The stronger the guarantees made about any two of strong consistency, high availability, or resilience to partitions, the weaker the guarantees that can be made about the third. 3. Harvest, Yield, and the CAP Principle Both strategies we propose for improving availability with simple mechanisms rely on the ability to broaden our notion of “correct behavior” for the target application, and then exploit the tradeoffs in the CAP principle to improve availability at large scale. We assume that clients make queries to servers, in which case there are at least two metrics for correct behavior: yield, which is the probability of completing a request, and harvest, which measures the fraction of the data reflected in the response, i.e. the completeness of the answer to the query. Yield is the common metric and is typically measured in “nines”: “four-nines availability” means a completion probability of . In practice, good HA systems aim for four or five nines. In the presence of faults there is typically a tradeoff between providing no answer (reducing yield) and providing an imperfect answer (maintaining yield, but reducing harvest). Some applications do not tolerate harvest degradation because any deviation from the single well-defined correct behavior renders the result useless. For example, a sensor application that must provide a binary sensor reading (presence/absence) does not tolerate degradation of the output.1 On the other hand, some applications tolerate graceful degradation of harvest: online aggregation [14] allows a user to explicitly trade running time for precision and confidence in performing arithmetic aggregation queries over a large dataset, thereby smoothly trading harvest for response time, which is particularly useful for approximate answers and for avoiding work that looks unlikely to be worthwhile based on preliminary results. At first glance, it would appear that this kind of degradation applies only to queries and not to updates. However, the model can be applied in the case of “single-location” updates: those changes that are localized to a single node (or technically a single partition). In this case, updates that 1This is consistent with the use of the term yield in semiconductor manufacturing: typically, each die on a wafer is intolerant to harvest degradation, and yield is defined as the fraction of working dice on a wafer. affect reachable nodes occur correctly but have limited visibility (a form of reduced harvest), while those that require unreachable nodes fail (reducing yield). These localized changes are consistent exactly because the new values are not available everywhere. This model of updates fails for global changes, but it is still quite useful for many practical applications, including personalization databases and collaborative filtering. 4. Strategy 1: Trading Harvest for Yield— Probabilistic Availability Nearly all systems are probabilistic whether they realize it or not. In particular, any system that is 100% available under single faults is probabilistically available overall (since there is a non-zero probability of multiple failures), and Internet-based servers are dependent on the best-effort Internet for true availability. Therefore availability maps naturally to probabilistic approaches, and it is worth addressing probabilistic systems directly, so that we can understand and limit the impact of faults. This requires some basic decisions about what needs to be available and the expected nature of faults. For example, node faults in the Inktomi search engine remove a proportional fraction of the search database. Thus in a 100-node cluster a single-node fault reduces the harvest by 1% during the duration of the fault (the overall harvest is usually measured over a longer interval). Implicit in this approach is graceful degradation under multiple node faults, specifically, linear degradation in harvest. By randomly placing data on nodes, we can ensure that the 1% lost is a random 1%, which makes the average-case and worstcase fault behavior the same. In addition, by replicating a high-priority subset of data, we reduce the probability of losing that data. This gives us more precise control of harvest, both increasing it and reducing the practical impact of missing data. Of course, it is possible to replicate all data, but doing so may have relatively little impact on harvest and yield despite significant cost, and in any case can never ensure 100% harvest or yield because of the best-effort Internet protocols the service relies on. As a similar example, transformation proxies for thin clients [8] also trade harvest for yield, by degrading results on demand to match the capabilities of clients that might otherwise be unable to get results at all. Even when the 100%-harvest answer is useful to the client, it may still be preferable to trade response time for harvest when clientto-server bandwidth is limited, for example, by intelligent degradation to low-bandwidth formats [7]. 5. Strategy 2: Application Decomposition and Orthogonal Mechanisms Some large applications can be decomposed into subsystems that are independently intolerant to harvest degradation (i.e. they fail by reducing yield), but whose independent failure allows the overall application to continue functioning with reduced utility. The application as a whole is then tolerant of harvest degradation. A good decomposition has at least one actual benefit and one potential benefit. The actual benefi",
"title": ""
},
{
"docid": "7a5fb2c77cfe49e6c6070d6d9e555116",
"text": "Implicit discourse relation classification is of great challenge due to the lack of connectives as strong linguistic cues, which motivates the use of annotated implicit connectives to improve the recognition. We propose a feature imitation framework in which an implicit relation network is driven to learn from another neural network with access to connectives, and thus encouraged to extract similarly salient features for accurate classification. We develop an adversarial model to enable an adaptive imitation scheme through competition between the implicit network and a rival feature discriminator. Our method effectively transfers discriminability of connectives to the implicit features, and achieves state-of-the-art performance on the PDTB benchmark.",
"title": ""
},
{
"docid": "3fc94de55342ff7560ed0c13a18e526c",
"text": "Linear optics with photon counting is a prominent candidate for practical quantum computing. The protocol by Knill, Laflamme, and Milburn 2001, Nature London 409, 46 explicitly demonstrates that efficient scalable quantum computing with single photons, linear optical elements, and projective measurements is possible. Subsequently, several improvements on this protocol have started to bridge the gap between theoretical scalability and practical implementation. The original theory and its improvements are reviewed, and a few examples of experimental two-qubit gates are given. The use of realistic components, the errors they induce in the computation, and how these errors can be corrected is discussed.",
"title": ""
},
{
"docid": "81a9c8a0314703f2c73789f46b394bfe",
"text": "In order to reproduce jaw motions and mechanics that match the human jaw function truthfully with the conception of bionics, a novel human jaw movement robot based on mechanical biomimetic principles was proposed. Firstly, based on the biomechanical properties of mandibular muscles, a jaw robot is built based on the 6-PSS parallel mechanism. Secondly, the inverse kinematics solution equations are derived. Finally, kinematics performances, such as workspace with the orientation constant, manipulability, dexterity of the jaw robot are obtained. These indices show that the parallel mechanism have a big enough flexible workspace, no singularity, and a good motion transfer performance for human chewing movement.",
"title": ""
},
{
"docid": "99511c1267d396d3745f075a40a06507",
"text": "Problem Description: It should be well known that processors are outstripping memory performance: specifically that memory latencies are not improving as fast as processor cycle time or IPC or memory bandwidth. Thought experiment: imagine that a cache miss takes 10000 cycles to execute. For such a processor instruction level parallelism is useless, because most of the time is spent waiting for memory. Branch prediction is also less effective, since most branches can be determined with data already in registers or in the cache; branch prediction only helps for branches which depend on outstanding cache misses. At the same time, pressures for reduced power consumption mount. Given such trends, some computer architects in industry (although not Intel EPIC) are talking seriously about retreating from out-of-order superscalar processor architecture, and instead building simpler, faster, dumber, 1-wide in-order processors with high degrees of speculation. Sometimes this is proposed in combination with multiprocessing and multithreading: tolerate long memory latencies by switching to other processes or threads. I propose something different: build narrow fast machines but use intelligent logic inside the CPU to increase the number of outstanding cache misses that can be generated from a single program. By MLP I mean simply the number of outstanding cache misses that can be generated (by a single thread, task, or program) and executed in an overlapped manner. It does not matter what sort of execution engine generates the multiple outstanding cache misses. An out-of-order superscalar ILP CPU may generate multiple outstanding cache misses, but 1-wide processors can be just as effective. Change the metrics: total execution time remains the overall goal, but instead of reporting IPC as an approximation to this, we must report MLP. Limit studies should be in terms of total number of non-overlapped cache misses on critical path. Now do the research: Many present-day hot topics in computer architecture help ILP, but do not help MLP. As mentioned above, predicting branch directions for branches that can be determined from data already in the cache or in registers does not help MLP for extremely long latencies. Similarly, prefetching of data cache misses for array processing codes does not help MLP – it just moves it around. Instead, investigate microarchitectures that help MLP: (0) Trivial case – explicit multithreading, like SMT. (1) Slightly less trivial case – implicitly multithread single programs, either by compiler software on an MT machine, or by a hybrid, such as …",
"title": ""
},
{
"docid": "2d5368515f2ea6926e9347d971745eb9",
"text": "Let us consider a \" random graph \" r,:l,~v having n possible (labelled) vertices and N edges; in other words, let us choose at random (with equal probabilities) one of the t 1 has no isolated points) and is connected in the ordinary sense. In the present paper we consider asymptotic statistical properties of random graphs for 11++ 30. We shall deal with the following questions: 1. What is the probability of r,,. T being completely connected? 2. What is the probability that the greatest connected component (sub-graph) of r,,, s should have effectively n-k points? (k=O, 1,. . .). 3. What is the probability that rp,N should consist of exactly kf I connected components? (k = 0, 1,. + .). 4. If the edges of a graph with n vertices are chosen successively so that after each step every edge which has not yet been chosen has the same probability to be chosen as the next, and if we continue this process until the graph becomes completely connected, what is the probability that the number of necessary sfeps v will be equal to a given number I? As (partial) answers to the above questions we prove ihe following four theorems. In Theorems 1, 2, and 3 we use the notation N,= (I-&n log n+cn 1 where c is an arbitrary fixed real number ([xl denotes the integer part of x).",
"title": ""
},
{
"docid": "283849657698b38e537171e2e74de52d",
"text": "Web logs can provide a wealth of information on user access patterns of a corresponding website, when they are properly analyzed. However, finding interesting patterns hidden in the low-level log data is non-trivial due to large log volumes, and the distribution of the log files in cluster environments. This paper presents a novel technique, the application of Density-Based Spatial Clustering of Applications with Noise (DBSCAN) and Expectation Maximization (EM) algorithms in an iterative manner for clustering web user sessions. Each cluster corresponds to one or more web user activities. The unique user access pattern of each cluster is identified by frequent pattern mining and sequential pattern mining techniques. When compared with the clustering output of EM, DBSCAN, and k-means algorithms, this technique shows better accuracy in web session mining, and it is more effective in identifying cluster changes with time. We demonstrate that the implemented system is capable of not only identifying common user behaviors, but also of identifying cyber-attacks.",
"title": ""
},
{
"docid": "58e2cba4f609dce3b17e945f58d90c08",
"text": "We develop a theory of financing of entrepreneurial ventures via an initial coin offering (ICO). Pre-selling a venture’s output by issuing tokens allows the entrepreneur to transfer part of the venture risk to diversified investors without diluting her control rights. This, however, leads to an agency conflict between the entrepreneur and investors that manifests itself in underinvestment. We show that an ICO can dominate traditional venture capital (VC) financing when VC investors are under-diversified, when the idiosyncratic component of venture risk is large enough, when the payoff distribution is sufficiently right-skewed, and when the degree of information asymmetry between the entrepreneur and ICO investors is not too large. Overall, our model suggests that an ICO can be a viable financing alternative for some but not all entrepreneurial ventures. An implication is that while regulating ICOs to reduce the information asymmetry associated with them is desirable, banning them outright is not.",
"title": ""
},
{
"docid": "92377bb2bc4e2daee041c5b78a5fcaf9",
"text": "Online discussions forums, known as forums for short, are conversational social cyberspaces constituting rich repositories of content and an important source of collaborative knowledge. However, most of this knowledge is buried inside the forum infrastructure and its extraction is both complex and difficult. The ability to automatically rate postings in online discussion forums, based on the value of their contribution, enhances the ability of users to find knowledge within this content. Several key online discussion forums have utilized collaborative intelligence to rate the value of postings made by users. However, a large percentage of posts go unattended and hence lack appropriate rating.\n In this paper, we focus on automatic rating of postings in online discussion forums. A set of features derived from the posting content and the threaded discussion structure are generated for each posting. These features are grouped into five categories, namely (i) relevance, (ii) originality, (iii) forum-specific features, (iv) surface features, and (v) posting-component features. Using a non-linear SVM classifier, the value of each posting is categorized into one of three levels High, Medium, or Low. This rating represents a seed value for each posting that is leveraged in filtering forum content. Experimental results have shown promising performance on forum data.",
"title": ""
},
{
"docid": "520b805d2b8777a10f3fd4731af0e94b",
"text": "I Promising empirical results for cost-sensitive and multivariate losses (Asif et al. 2015, Wang et al. 2015) Our Approach: 1. Recast zero-one adversarial classification from ERM perspective by analyzing the Nash equilibrium and define a new multiclass loss 2. Fill the long-standing gap in ERM methods by simultaneously: (1) Guaranteeing Fisher consistency and universal consistency (2) Enabling computational efficiency via kernel trick and dual sparsity (3) Providing competitive performance in practice 3. Significantly improve computational efficiency → no game solving using linear programming is required",
"title": ""
},
{
"docid": "42bb77e398f19f3be69c3852a597aa33",
"text": "The recently released Rodinia benchmark suite enables users to evaluate heterogeneous systems including both accelerators, such as GPUs, and multicore CPUs. As Rodinia sees higher levels of acceptance, it becomes important that researchers understand this new set of benchmarks, especially in how they differ from previous work. In this paper, we present recent extensions to Rodinia and conduct a detailed characterization of the Rodinia benchmarks (including performance results on an NVIDIA GeForce GTX480, the first product released based on the Fermi architecture). We also compare and contrast Rodinia with Parsec to gain insights into the similarities and differences of the two benchmark collections; we apply principal component analysis to analyze the application space coverage of the two suites. Our analysis shows that many of the workloads in Rodinia and Parsec are complementary, capturing different aspects of certain performance metrics.",
"title": ""
},
{
"docid": "f6a08c6659fcb7e6e56c0d004295c809",
"text": "Graph convolutional networks (GCNs) are powerful deep neural networks for graph-structured data. However, GCN computes the representation of a node recursively from its neighbors, making the receptive field size grow exponentially with the number of layers. Previous attempts on reducing the receptive field size by subsampling neighbors do not have convergence guarantee, and their receptive field size per node is still in the order of hundreds. In this paper, we develop control variate based algorithms with new theoretical guarantee to converge to a local optimum of GCN regardless of the neighbor sampling size. Empirical results show that our algorithms enjoy similar convergence rate and model quality with the exact algorithm using only two neighbors per node. The running time of our algorithms on a large Reddit dataset is only one seventh of previous neighbor sampling algorithms.",
"title": ""
},
{
"docid": "a7c0a12e6e52a98e825c462f54be6ee5",
"text": "Given the abundance of various types of satellite imagery of almost any region on the globe we are faced with a challenge of interpreting this data to extract useful information. In this thesis we look at a way of automating the detection of ships to track maritime traffic in a desired port or region. We propose a machine learning approach using deep neural networks and explore the development, implementation and evaluation of such a pipeline, as well as methods and dataset used to train the neural network classifier. We also take a look at a graphical approach to computation using TensorFlow [13] which offers easy massive parallelization and deployment to cloud. The final result is an algorithm which is capable of receiving images from various providers at various resolutions and outputs a binary pixelwise mask over all detected ships.",
"title": ""
},
{
"docid": "080e7880623a09494652fd578802c156",
"text": "Whole-cell biosensors are a good alternative to enzyme-based biosensors since they offer the benefits of low cost and improved stability. In recent years, live cells have been employed as biosensors for a wide range of targets. In this review, we will focus on the use of microorganisms that are genetically modified with the desirable outputs in order to improve the biosensor performance. Different methodologies based on genetic/protein engineering and synthetic biology to construct microorganisms with the required signal outputs, sensitivity, and selectivity will be discussed.",
"title": ""
},
{
"docid": "db3d1a63d5505693bd6677e9b268e8d4",
"text": "This paper presents a system for calibrating the extrinsic parameters and timing offsets of an array of cameras, 3-D lidars, and global positioning system/inertial navigation system sensors, without the requirement of any markers or other calibration aids. The aim of the approach is to achieve calibration accuracies comparable with state-of-the-art methods, while requiring less initial information about the system being calibrated and thus being more suitable for use by end users. The method operates by utilizing the motion of the system being calibrated. By estimating the motion each individual sensor observes, an estimate of the extrinsic calibration of the sensors is obtained. Our approach extends standard techniques for motion-based calibration by incorporating estimates of the accuracy of each sensor's readings. This yields a probabilistic approach that calibrates all sensors simultaneously and facilitates the estimation of the uncertainty in the final calibration. In addition, we combine this motion-based approach with appearance information. This gives an approach that requires no initial calibration estimate and takes advantage of all available alignment information to provide an accurate and robust calibration for the system. The new framework is validated with datasets collected with different platforms and different sensors' configurations, and compared with state-of-the-art approaches.",
"title": ""
},
{
"docid": "62688aa48180943a6fcf73fef154fe75",
"text": "Oxidative stress is a phenomenon associated with the pathology of several diseases including atherosclerosis, neurodegenerative diseases such as Alzheimer’s and Parkinson’s diseases, cancer, diabetes mellitus, inflammatory diseases, as well as psychiatric disorders or aging process. Oxidative stress is defined as an imbalance between the production of free radicals and reactive metabolites, so called oxidants, and their elimination by protective mechanisms named antioxidative systems. Free radicals and their metabolites prevail over antioxidants. This imbalance leads to damage of important biomolecules and organs with plausible impact on the whole organism. Oxidative and antioxidative processes are associated with electron transfer influencing the redox state of cells and organisms; therefore, oxidative stress is also known as redox stress. At present, the opinion that oxidative stress is not always harmful has been accepted. Depending on its intensity, it can play a role in regulation of other important processes through modulation of signal pathways, influencing synthesis of antioxidant enzymes, repair processes, inflammation, apoptosis and cell proliferation, and thus process of a malignity. Therefore, improper administration of antioxidants can potentially negatively impact biological systems.",
"title": ""
},
{
"docid": "d2a0ff28b7163203a03be27977b9b425",
"text": "The various types of shadows are characterized. Most existing shadow algorithms are described, and their complexities, advantages, and shortcomings are discussed. Hard shadows, soft shadows, shadows of transparent objects, and shadows for complex modeling primitives are considered. For each type, shadow algorithms within various rendering techniques are examined. The aim is to provide readers with enough background and insight on the various methods to allow them to choose the algorithm best suited to their needs and to help identify the areas that need more research and point to possible solutions.<<ETX>>",
"title": ""
},
{
"docid": "d060d89c7c3fbdc35ccdf8b61fc26cbe",
"text": "The increasing pervasiveness of location-acquisition technologies has enabled collection of huge amount of trajectories for almost any kind of moving objects. Discovering useful patterns from their movement behaviours can convey valuable knowledge to a variety of critical applications. In this light, we propose a novel concept, called gathering, which is a trajectory pattern modelling various group incidents such as celebrations, parades, protests, traffic jams and so on. A key observation is that these incidents typically involve large congregations of individuals, which form durable and stable areas with high density. Since the process of discovering gathering patterns over large-scale trajectory databases can be quite lengthy, we further develop a set of well thought out techniques to improve the performance. These techniques, including effective indexing structures, fast pattern detection algorithms implemented with bit vectors, and incremental algorithms for handling new trajectory arrivals, collectively constitute an efficient solution for this challenging task. Finally, the effectiveness of the proposed concepts and the efficiency of the approaches are validated by extensive experiments based on a real taxicab trajectory dataset.",
"title": ""
}
] |
scidocsrr
|
6790777bd048c450951362a2dc9d0e24
|
Dirichlet Process Mixture Model for Correcting Technical Variation in Single-Cell Gene Expression Data
|
[
{
"docid": "3223563162967868075a43ca86c1d31a",
"text": "Deep learning research aims at discovering learning algorithms that discover multiple levels of distributed representations, with higher levels representing more abstract concepts. Although the study of deep learning has already led to impressive theoretical results, learning algorithms and breakthrough experiments, several challenges lie ahead. This paper proposes to examine some of these challenges, centering on the questions of scaling deep learning algorithms to much larger models and datasets, reducing optimization difficulties due to ill-conditioning or local minima, designing more efficient and powerful inference and sampling procedures, and learning to disentangle the factors of variation underlying the observed data. It also proposes a few forward-looking research directions aimed at overcoming these",
"title": ""
}
] |
[
{
"docid": "201170c6a687535bf77cdda9acb6fbce",
"text": "PADS is a declarative data description language that allows data analysts to describe both the physical layout of ad hoc data sources and semantic properties of that data. From such descriptions, the PADS compiler generates libraries and tools for manipulating the data, including parsing routines, statistical profiling tools, translation programs to produce well-behaved formats such as Xml or those required for loading relational databases, and tools for running XQueries over raw PADS data sources. The descriptions are concise enough to serve as \"living\" documentation while flexible enough to describe most of the ASCII, binary, and Cobol formats that we have seen in practice. The generated parsing library provides for robust, application-specific error handling.",
"title": ""
},
{
"docid": "94013936968a4864167ed4e764398deb",
"text": "A prime requirement for autonomous driving is a fast and reliable estimation of the motion state of dynamic objects in the ego-vehicle's surroundings. An instantaneous approach for extended objects based on two Doppler radar sensors has recently been proposed. In this paper, that approach is augmented by prior knowledge of the object's heading angle and rotation center. These properties can be determined reliably by state-of-the-art methods based on sensors such as LIDAR or cameras. The information fusion is performed utilizing an appropriate measurement model, which directly maps the motion state in the Doppler velocity space. This model integrates the geometric properties. It is used to estimate the object's motion state using a linear regression. Additionally, the model allows a straightforward calculation of the corresponding variances. The resulting method shows a promising accuracy increase of up to eight times greater than the original approach.",
"title": ""
},
{
"docid": "233ee357b5785572f50b79d6dd936e7c",
"text": "graph is a simple, powerful, elegant abstraction with broad applicability in computer science and many related fields. Algorithms that operate on graphs see heavy use in both theoretical and practical contexts. Graphs have a very natural visual representation as nodes and connecting links arranged in space. Seeing this structure explicitly can aid tasks in many domains. Many people automatically sketch such a picture when thinking about small graphs, often including simple annotations. The pervasiveness of visual representations of small graphs testifies to their usefulness. On the other hand, although many large data sets can be expressed as graphs, few such visual representations exist. What causes this discrepancy? For one thing, graph layout poses a hard problem, 1 one that current tools just can't overcome. Conventional systems often falter when handling hundreds of edges, and none can handle more than a few thousand edges. 2 However, nonvisual manipulation of graphs with 50,000 edges is commonplace , and much larger instances exist. We can consider the Web as an extreme example of a graph with many millions of nodes and edges. Although many individual Web sites stay quite small, a significant number have more than 20,000 documents. The Unix file system reachable from a single networked workstation might include more than 100,000 files scattered across dozens of gigabytes worth of remotely mounted disk drives. Computational complexity is not the only reason that software to visually manipulate large graphs has lagged behind software to computationally manipulate them. Many previous graph layout systems have focused on fine-tuning the layout of relatively small graphs in support of polished presentations. A graph drawing system that focuses on the interactive browsing of large graphs can instead target the quite different tasks of browsing and exploration. Many researchers in scientific visual-ization have recognized the split between explanatory and exploratory goals. This distinction proves equally relevant for graph drawing. Contribution This article briefly describes a software system that explicitly attempts to handle much larger graphs than previous systems and support dynamic exploration rather than final presentation. I'll then discuss the applicability of this system to goals beyond simple exploration. A software system that supports graph exploration should include both a layout and an interactive drawing component. I have developed new algorithms for both layout and drawing—H3 and H3Viewer. A paper from InfoVis 97 contains a more extensive presentation of the H3 layout algorithm. 3 The H3Viewer drawing algorithm remains …",
"title": ""
},
{
"docid": "09beeeaf2d92087da10c5725bda10d2f",
"text": "We report a quantitative investigation of the visual identification and auditory comprehension deficits of 4 patients who had made a partial recovery from herpes simplex encephalitis. Clinical observations had suggested the selective impairment and selective preservation of certain categories of visual stimuli. In all 4 patients a significant discrepancy between their ability to identify inanimate objects and inability to identify living things and foods was demonstrated. In 2 patients it was possible to compare visual and verbal modalities and the same pattern of dissociation was observed in both. For 1 patient, comprehension of abstract words was significantly superior to comprehension of concrete words. Consistency of responses was recorded within a modality in contrast to a much lesser degree of consistency between modalities. We interpret our findings in terms of category specificity in the organization of meaning systems that are also modality specific semantic systems.",
"title": ""
},
{
"docid": "2da528d39b8815bcbb9a8aaf20d94926",
"text": "Collaborative filtering (CF) is out of question the most widely adopted and successful recommendation approach. A typical CF-based recommender system associates a user with a group of like-minded users based on their individual preferences over all the items, either explicit or implicit, and then recommends to the user some unobserved items enjoyed by the group. However, we find that two users with similar tastes on one item subset may have totally different tastes on another set. In other words, there exist many user-item subgroups each consisting of a subset of items and a group of like-minded users on these items. It is more reasonable to predict preferences through one user's correlated subgroups, but not the entire user-item matrix. In this paper, to find meaningful subgroups, we formulate a new Multiclass Co-Clustering (MCoC) model, which captures relations of user-to-item, user-to-user, and item-to-item simultaneously. Then, we combine traditional CF algorithms with subgroups for improving their top- <inline-formula><tex-math notation=\"LaTeX\">$N$</tex-math><alternatives> <inline-graphic xlink:type=\"simple\" xlink:href=\"cai-ieq1-2566622.gif\"/></alternatives></inline-formula> recommendation performance. Our approach can be seen as a new extension of traditional clustering CF models. Systematic experiments on several real data sets have demonstrated the effectiveness of our proposed approach.",
"title": ""
},
{
"docid": "6a2b3389ad8de2a0e9a50d4324869c2a",
"text": "Many web applications provide a fully automatic machine translation service, and users can easily access and understand the information they are interested in. However, the services still have inaccurate results when translating technical terms. Therefore, we suggest a new method that collects reliable translations of technical terms between Korean and English. To collect the pairs, we utilize the metadata of Korean scientific papers and make a new statistical model to adapt the metadata characteristics appropriately. The collected Korean-English pairs are evaluated in terms of reliability and compared with the results of Google translator. Through evaluation and comparison, we confirm that this research can produce highly reliable data and improve the translation quality of technical terms.",
"title": ""
},
{
"docid": "f639aa4b80593934d4714a77ad0dde92",
"text": "Moringa Oleifera (MO), a plant from the family Moringacea is a major crop in Asia and Africa. MO has been studied for its health properties, attributed to the numerous bioactive components, including vitamins, phenolic acids, flavonoids, isothiocyanates, tannins and saponins, which are present in significant amounts in various components of the plant. Moringa Oleifera leaves are the most widely studied and they have shown to be beneficial in several chronic conditions, including hypercholesterolemia, high blood pressure, diabetes, insulin resistance, non-alcoholic liver disease, cancer and overall inflammation. In this review, we present information on the beneficial results that have been reported on the prevention and alleviation of these chronic conditions in various animal models and in cell studies. The existing limited information on human studies and Moringa Oleifera leaves is also presented. Overall, it has been well documented that Moringa Oleifera leaves are a good strategic for various conditions associated with heart disease, diabetes, cancer and fatty liver.",
"title": ""
},
{
"docid": "2dc2b9d60244e819a85b33581800ae56",
"text": "In this study, a simple and effective silver ink formulation was developed to generate silver tracks with high electrical conductivity on flexible substrates at low sintering temperatures. Diethanolamine (DEA), a self-oxidizing compound at moderate temperatures, was mixed with a silver ammonia solution to form a clear and stable solution. After inkjet-printed or pen-written on plastic sheets, DEA in the silver ink decomposes at temperatures higher than 50 °C and generates formaldehyde, which reacts spontaneously with silver ammonia ions to form silver thin films. The electrical conductivity of the inkjet-printed silver films can be 26% of the bulk silver after heating at 75 °C for 20 min and show great adhesion on plastic sheets.",
"title": ""
},
{
"docid": "d9123053892ce671665a3a4a1694a57c",
"text": "Visual perceptual learning (VPL) is defined as a long-term improvement in performance on a visual task. In recent years, the idea that conscious effort is necessary for VPL to occur has been challenged by research suggesting the involvement of more implicit processing mechanisms, such as reinforcement-driven processing and consolidation. In addition, we have learnt much about the neural substrates of VPL and it has become evident that changes in visual areas and regions beyond the visual cortex can take place during VPL.",
"title": ""
},
{
"docid": "398016f6881bff1b3bf33a654fc30dff",
"text": "This paper explores the relationship between employee satisfaction, customer satisfaction and shareholders value theoretically. A conceptual model discusses about the relationship of these three variables. In first section the link between tow variables employee satisfaction and customer satisfaction is examined. In the second section the link between customer satisfaction and shareholders value is examined while in third section the link between customer satisfaction and shareholder’s value is examine. All these three models represent positive relationship among the related variables. Paper concludes that customer satisfaction and loyalty would continue as long as employees are satisfied and they deliver the required quality of goods and services. Customer satisfaction and employee’s satisfaction will increase shareholders value.",
"title": ""
},
{
"docid": "5b5d4c33a600d93b8b999a51318980da",
"text": "In this work, we focused on liveness detection for facial recognition system's spoofing via fake face movement. We have developed a pupil direction observing system for anti-spoofing in face recognition systems using a basic hardware equipment. Firstly, eye area is being extracted from real time camera by using Haar-Cascade Classifier with specially trained classifier for eye region detection. Feature points have extracted and traced for minimizing person's head movements and getting stable eye region by using Kanade-Lucas-Tomasi (KLT) algorithm. Eye area is being cropped from real time camera frame and rotated for a stable eye area. Pupils are extracted from eye area by using a new improved algorithm subsequently. After a few stable number of frames that has pupils, proposed spoofing algorithm selects a random direction and sends a signal to Arduino to activate that selected direction's LED on a square frame that has totally eight LEDs for each direction. After chosen LED has been activated, eye direction is observed whether pupil direction and LED's position matches. If the compliance requirement is satisfied, algorithm returns data that contains liveness information. Complete algorithm for liveness detection using pupil tracking is tested on volunteers and algorithm achieved high success ratio.",
"title": ""
},
{
"docid": "bd1a13c94d0e12b4ba9f14fef47d2564",
"text": "Denoising is the problem of removing the inherent noise from an image. The standard noise model is additive white Gaussian noise, where the observed image f is related to the underlying true image u by the degradation model f = u+ η, and η is supposed to be at each pixel independently and identically distributed as a zero-mean Gaussian random variable. Since this is an ill-posed problem, Rudin, Osher and Fatemi introduced the total variation as a regularizing term. It has proved to be quite efficient for regularizing images without smoothing the boundaries of the objects. This paper focuses on the simple description of the theory and on the implementation of Chambolle’s projection algorithm for minimizing the total variation of a grayscale image. Furthermore, we adapt the algorithm to the vectorial total variation for color images. The implementation is described in detail and its parameters are analyzed and varied to come up with a reliable implementation. Source Code ANSI C source code to produce the same results as the demo is accessible at the IPOL web page of this article1.",
"title": ""
},
{
"docid": "3c745325cca06061d0e11cbc30f847f9",
"text": "Walsh-Hadamard transform is used in a wide variety of scientific and engineering applications, including bent functions and cryptanalytic optimization techniques in cryptography. In linear cryptanalysis, it is a key question to find a good linear approximation, which holds with probability (1 + d)/2 and the bias d is large in absolute value. Lu and Desmedt (2011) take a step toward answering this key question in a more generalized setting and initiate the work on the generalized bias problem with linearly-dependent inputs. In this paper, we give fully extended results. Deep insights on assumptions behind the problem are given. We take an information-theoretic approach to show that our bias problem assumes the setting of the maximum input entropy subject to the input constraint. By means of Walsh transform, the bias can be expressed in a simple form. It incorporates Piling-up lemma as a special case. Secondly, as application, we answer a long-standing open problem in correlation attacks on combiners with memory. We give a closed-form exact solution for the correlation involving the multiple polynomial of any weight for the first time. We also give Walsh analysis for numerical approximation. An interesting bias phenomenon is uncovered, i.e., for even and odd weight of the polynomial, the correlation behaves differently. Thirdly, we introduce the notion of weakly biased distribution, and study bias approximation for a more general case by Walsh analysis. We show that for weakly biased distribution, Piling-up lemma is still valid. Our work shows that Walsh analysis is useful and effective to a broad class of cryptanalysis problems.",
"title": ""
},
{
"docid": "edd415b34d60495c4da0ffc9e714acf3",
"text": "Nearly two decades ago, Ward Cunningham introduced us to the term \"technical debt\" as a means of describing the long term costs associated with a suboptimal software design and implementation. For most programs, especially those with a large legacy code baseline, achieving zero absolute debt is an unnecessary and unrealistic goal. It is important to recall that a primary reason for managing and eliminating debt is to drive down maintenance costs and to reduce defects. A sufficiently low, manageable level of debt can minimize the long-term impact, i.e., \"low debt interest payments\". In this article, we define an approach for establishing program specific thresholds to define manageable levels of technical debt.",
"title": ""
},
{
"docid": "266625d5f1c658849d34514d5dc9586f",
"text": "Hand written digit recognition is highly nonlinear problem. Recognition of handwritten numerals plays an active role in day to day life now days. Office automation, e-governors and many other areas, reading printed or handwritten documents and convert them to digital media is very crucial and time consuming task. So the system should be designed in such a way that it should be capable of reading handwritten numerals and provide appropriate response as humans do. However, handwritten digits are varying from person to person because each one has their own style of writing, means the same digit or character/word written by different writer will be different even in different languages. This paper presents survey on handwritten digit recognition systems with recent techniques, with three well known classifiers namely MLP, SVM and k-NN used for classification. This paper presents comparative analysis that describes recent methods and helps to find future scope.",
"title": ""
},
{
"docid": "1716dfce500db00a2948927e3f7cbf9b",
"text": "A mm-wave transition from coplanar waveguide (CPW) to substrate integrated waveguide (SIW) is presented based on a U-shaped coplanar slot antenna. Using 3D FEM simulations the input impedance exhibited by the structure is analyzed, and simple equations are extracted to design an ultra-wide band transition once the substrate material and the waveguide cut-off frequency are chosen. As an example, a W-band transition on a high resistivity silicon-filled waveguide is implemented: an input matching better than -14.5 dB from 79 to 110 GHz and insertion loss of 0.6 dB at 110 GHz are measured.",
"title": ""
},
{
"docid": "a5e03e76925c838cfdfc328552c9e901",
"text": "OBJECTIVE\nIn this article, we describe some of the cognitive and system-based sources of detection and interpretation errors in diagnostic radiology and discuss potential approaches to help reduce misdiagnoses.\n\n\nCONCLUSION\nEvery radiologist worries about missing a diagnosis or giving a false-positive reading. The retrospective error rate among radiologic examinations is approximately 30%, with real-time errors in daily radiology practice averaging 3-5%. Nearly 75% of all medical malpractice claims against radiologists are related to diagnostic errors. As medical reimbursement trends downward, radiologists attempt to compensate by undertaking additional responsibilities to increase productivity. The increased workload, rising quality expectations, cognitive biases, and poor system factors all contribute to diagnostic errors in radiology. Diagnostic errors are underrecognized and underappreciated in radiology practice. This is due to the inability to obtain reliable national estimates of the impact, the difficulty in evaluating effectiveness of potential interventions, and the poor response to systemwide solutions. Most of our clinical work is executed through type 1 processes to minimize cost, anxiety, and delay; however, type 1 processes are also vulnerable to errors. Instead of trying to completely eliminate cognitive shortcuts that serve us well most of the time, becoming aware of common biases and using metacognitive strategies to mitigate the effects have the potential to create sustainable improvement in diagnostic errors.",
"title": ""
},
{
"docid": "35ed2c8db6b143629e806b68741e9977",
"text": "Nowadays, smart wristbands have become one of the most prevailing wearable devices as they are small and portable. However, due to the limited size of the touch screens, smart wristbands typically have poor interactive experience. There are a few works appropriating the human body as a surface to extend the input. Yet by using multiple sensors at high sampling rates, they are not portable and are energy-consuming in practice. To break this stalemate, we proposed a portable, cost efficient text-entry system, termed ViType, which firstly leverages a single small form factor sensor to achieve a practical user input with much lower sampling rates. To enhance the input accuracy with less vibration information introduced by lower sampling rate, ViType designs a set of novel mechanisms, including an artificial neural network to process the vibration signals, and a runtime calibration and adaptation scheme to recover the error due to temporal instability. Extensive experiments have been conducted on 30 human subjects. The results demonstrate that ViType is robust to fight against various confounding factors. The average recognition accuracy is 94.8% with an initial training sample size of 20 for each key, which is 1.52 times higher than the state-of-the-art on-body typing system. Furthermore, when turning on the runtime calibration and adaptation system to update and enlarge the training sample size, the accuracy can reach around 98% on average during one month.",
"title": ""
},
{
"docid": "bfd879313c1dbb641798f1c8b56248d2",
"text": "In this paper, we propose an attention-aware deep reinforcement learning (ADRL) method for video face recognition, which aims to discard the misleading and confounding frames and find the focuses of attentions in face videos for person recognition. We formulate the process of finding the attentions of videos as a Markov decision process and train the attention model through a deep reinforcement learning framework without using extra labels. Unlike existing attention models, our method takes information from both the image space and the feature space as the input to make better use of face information that is discarded in the feature learning process. Besides, our approach is attention-aware, which seeks different attentions of videos for the recognition of different pairs of videos. Our approach achieves very competitive video face recognition performance on three widely used video face datasets.",
"title": ""
},
{
"docid": "d847ed8f2bc209285d80a7d26e577c5b",
"text": "We propose a simple yet effective technique for neural network learning. The forward propagation is computed as usual. In back propagation, only a small subset of the full gradient is computed to update the model parameters. The gradient vectors are sparsified in such a way that only the top-k elements (in terms of magnitude) are kept. As a result, only k rows or columns (depending on the layout) of the weight matrix are modified, leading to a linear reduction (k divided by the vector dimension) in the computational cost. Surprisingly, experimental results demonstrate that we can update only 1–4% of the weights at each back propagation pass. This does not result in a larger number of training iterations. More interestingly, the accuracy of the resulting models is actually improved rather than degraded, and a detailed analysis is given. The code is available at https://github.com/jklj077/meProp.",
"title": ""
}
] |
scidocsrr
|
c4d19b13e92558c0cfab7f6748d7a35e
|
Ensemble diversity measures and their application to thinning
|
[
{
"docid": "0fb2afcd2997a1647bb4edc12d2191f9",
"text": "Many databases have grown to the point where they cannot fit into the fast memory of even large memory machines, to say nothing of current workstations. If what we want to do is to use these data bases to construct predictions of various characteristics, then since the usual methods require that all data be held in fast memory, various work-arounds have to be used. This paper studies one such class of methods which give accuracy comparable to that which could have been obtained if all data could have been held in core and which are computationally fast. The procedure takes small pieces of the data, grows a predictor on each small piece and then pastes these predictors together. A version is given that scales up to terabyte data sets. The methods are also applicable to on-line learning.",
"title": ""
}
] |
[
{
"docid": "a880d38d37862b46dc638b9a7e45b6ee",
"text": "This paper presents the modeling, simulation, and analysis of the dynamic behavior of a fictitious 2 × 320 MW variable-speed pump-turbine power plant, including a hydraulic system, electrical equipment, rotating inertias, and control systems. The modeling of the hydraulic and electrical components of the power plant is presented. The dynamic performances of a control strategy in generating mode and one in pumping mode are investigated by the simulation of the complete models in the case of change of active power set points. Then, a pseudocontinuous model of the converters feeding the rotor circuits is described. Due to this simplification, the simulation time can be reduced drastically (approximately factor 60). A first validation of the simplified model of the converters is obtained by comparison of the simulated results coming from the simplified and complete models for different modes of operation of the power plant. Experimental results performed on a 2.2-kW low-power test bench are also compared with the simulated results coming from both complete and simplified models related to this case and confirm the validity of the proposed simplified approach for the converters.",
"title": ""
},
{
"docid": "833c110e040311909aa38b05e457b2af",
"text": "The scyphozoan Aurelia aurita (Linnaeus) s. l., is a cosmopolitan species-complex which blooms seasonally in a variety of coastal and shelf sea environments around the world. We hypothesized that ephyrae of Aurelia sp.1 are released from the inner part of the Jiaozhou Bay, China when water temperature is below 15°C in late autumn and winter. The seasonal occurrence, growth, and variation of the scyphomedusa Aurelia sp.1 were investigated in Jiaozhou Bay from January 2011 to December 2011. Ephyrae occurred from May through June with a peak abundance of 2.38 ± 0.56 ind/m3 in May, while the temperature during this period ranged from 12 to 18°C. The distribution of ephyrae was mainly restricted to the coastal area of the bay, and the abundance was higher in the dock of the bay than at the other inner bay stations. Young medusae derived from ephyrae with a median diameter of 9.74 ± 1.7 mm were present from May 22. Growth was rapid from May 22 to July 2 with a maximum daily growth rate of 39%. Median diameter of the medusae was 161.80 ± 18.39 mm at the beginning of July. In August, a high proportion of deteriorated specimens was observed and the median diameter decreased. The highest average abundance is 0.62 ± 1.06 ind/km2 in Jiaozhou Bay in August. The abundance of Aurelia sp.1 medusae was low from September and then decreased to zero. It is concluded that water temperature is the main driver regulating the life cycle of Aurelia sp.1 in Jiaozhou Bay.",
"title": ""
},
{
"docid": "db4bb32f6fdc7a05da41e223afac3025",
"text": "Modern imaging techniques for probing brain function, including functional magnetic resonance imaging, intrinsic and extrinsic contrast optical imaging, and magnetoencephalography, generate large data sets with complex content. In this paper we develop appropriate techniques for analysis and visualization of such imaging data to separate the signal from the noise and characterize the signal. The techniques developed fall into the general category of multivariate time series analysis, and in particular we extensively use the multitaper framework of spectral analysis. We develop specific protocols for the analysis of fMRI, optical imaging, and MEG data, and illustrate the techniques by applications to real data sets generated by these imaging modalities. In general, the analysis protocols involve two distinct stages: \"noise\" characterization and suppression, and \"signal\" characterization and visualization. An important general conclusion of our study is the utility of a frequency-based representation, with short, moving analysis windows to account for nonstationarity in the data. Of particular note are 1) the development of a decomposition technique (space-frequency singular value decomposition) that is shown to be a useful means of characterizing the image data, and 2) the development of an algorithm, based on multitaper methods, for the removal of approximately periodic physiological artifacts arising from cardiac and respiratory sources.",
"title": ""
},
{
"docid": "7dcba854d1f138ab157a1b24176c2245",
"text": "Essential oils distilled from members of the genus Lavandula have been used both cosmetically and therapeutically for centuries with the most commonly used species being L. angustifolia, L. latifolia, L. stoechas and L. x intermedia. Although there is considerable anecdotal information about the biological activity of these oils much of this has not been substantiated by scientific or clinical evidence. Among the claims made for lavender oil are that is it antibacterial, antifungal, carminative (smooth muscle relaxing), sedative, antidepressive and effective for burns and insect bites. In this review we detail the current state of knowledge about the effect of lavender oils on psychological and physiological parameters and its use as an antimicrobial agent. Although the data are still inconclusive and often controversial, there does seem to be both scientific and clinical data that support the traditional uses of lavender. However, methodological and oil identification problems have severely hampered the evaluation of the therapeutic significance of much of the research on Lavandula spp. These issues need to be resolved before we have a true picture of the biological activities of lavender essential oil.",
"title": ""
},
{
"docid": "83b8944584693b9568f6ad3533ad297b",
"text": "BACKGROUND\nChemotherapy is the standard of care for incurable advanced gastric cancer. Whether the addition of gastrectomy to chemotherapy improves survival for patients with advanced gastric cancer with a single non-curable factor remains controversial. We aimed to investigate the superiority of gastrectomy followed by chemotherapy versus chemotherapy alone with respect to overall survival in these patients.\n\n\nMETHODS\nWe did an open-label, randomised, phase 3 trial at 44 centres or hospitals in Japan, South Korea, and Singapore. Patients aged 20-75 years with advanced gastric cancer with a single non-curable factor confined to either the liver (H1), peritoneum (P1), or para-aortic lymph nodes (16a1/b2) were randomly assigned (1:1) in each country to chemotherapy alone or gastrectomy followed by chemotherapy by a minimisation method with biased-coin assignment to balance the groups according to institution, clinical nodal status, and non-curable factor. Patients, treating physicians, and individuals who assessed outcomes and analysed data were not masked to treatment assignment. Chemotherapy consisted of oral S-1 80 mg/m(2) per day on days 1-21 and cisplatin 60 mg/m(2) on day 8 of every 5-week cycle. Gastrectomy was restricted to D1 lymphadenectomy without any resection of metastatic lesions. The primary endpoint was overall survival, analysed by intention to treat. This study is registered with UMIN-CTR, number UMIN000001012.\n\n\nFINDINGS\nBetween Feb 4, 2008, and Sept 17, 2013, 175 patients were randomly assigned to chemotherapy alone (86 patients) or gastrectomy followed by chemotherapy (89 patients). After the first interim analysis on Sept 14, 2013, the predictive probability of overall survival being significantly higher in the gastrectomy plus chemotherapy group than in the chemotherapy alone group at the final analysis was only 13·2%, so the study was closed on the basis of futility. Overall survival at 2 years for all randomly assigned patients was 31·7% (95% CI 21·7-42·2) for patients assigned to chemotherapy alone compared with 25·1% (16·2-34·9) for those assigned to gastrectomy plus chemotherapy. Median overall survival was 16·6 months (95% CI 13·7-19·8) for patients assigned to chemotherapy alone and 14·3 months (11·8-16·3) for those assigned to gastrectomy plus chemotherapy (hazard ratio 1·09, 95% CI 0·78-1·52; one-sided p=0·70). The incidence of the following grade 3 or 4 chemotherapy-associated adverse events was higher in patients assigned to gastrectomy plus chemotherapy than in those assigned to chemotherapy alone: leucopenia (14 patients [18%] vs two [3%]), anorexia (22 [29%] vs nine [12%]), nausea (11 [15%] vs four [5%]), and hyponatraemia (seven [9%] vs four [5%]). One treatment-related death occurred in a patient assigned to chemotherapy alone (sudden cardiopulmonary arrest of unknown cause during the second cycle of chemotherapy) and one occurred in a patient assigned to chemotherapy plus gastrectomy (rapid growth of peritoneal metastasis after discharge 12 days after surgery).\n\n\nINTERPRETATION\nSince gastrectomy followed by chemotherapy did not show any survival benefit compared with chemotherapy alone in advanced gastric cancer with a single non-curable factor, gastrectomy cannot be justified for treatment of patients with these tumours.\n\n\nFUNDING\nThe Ministry of Health, Labour and Welfare of Japan and the Korean Gastric Cancer Association.",
"title": ""
},
{
"docid": "ddb77ec8a722c50c28059d03919fb299",
"text": "Among the smart cities applications, optimizing lottery games is one of the urgent needs to ensure their fairness and transparency. The emerging blockchain technology shows a glimpse of solutions to fairness and transparency issues faced by lottery industries. This paper presents the design of a blockchain-based lottery system for smart cities applications. We adopt the smart contracts of blockchain technology and the cryptograph blockchain model, Hawk [8], to design the blockchain-based lottery system, FairLotto, for future smart cities applications. Fairness, transparency, and privacy of the proposed blockchain-based lottery system are discussed and ensured.",
"title": ""
},
{
"docid": "872ccba4f0a0ba6a57500d4b73384ce1",
"text": "This research demonstrates the application of association rule mining to spatio-temporal data. Association rule mining seeks to discover associations among transactions encoded in a database. An association rule takes the form A → B where A (the antecedent) and B (the consequent) are sets of predicates. A spatio-temporal association rule occurs when there is a spatio-temporal relationship in the antecedent or consequent of the rule. As a case study, association rule mining is used to explore the spatial and temporal relationships among a set of variables that characterize socioeconomic and land cover change in the Denver, Colorado, USA region from 1970–1990. Geographic Information Systems (GIS)-based data pre-processing is used to integrate diverse data sets, extract spatio-temporal relationships, classify numeric data into ordinal categories, and encode spatio-temporal relationship data in tabular format for use by conventional (non-spatio-temporal) association rule mining software. Multiple level association rule mining is supported by the development of a hierarchical classification scheme (concept hierarchy) for each variable. Further research in spatiotemporal association rule mining should address issues of data integration, data classification, the representation and calculation of spatial relationships, and strategies for finding ‘interesting’ rules.",
"title": ""
},
{
"docid": "5ec64c4a423ccd32a5c1ceb918e3e003",
"text": "The leading edge (approximately 1 microgram) of lamellipodia in Xenopus laevis keratocytes and fibroblasts was shown to have an extensively branched organization of actin filaments, which we term the dendritic brush. Pointed ends of individual filaments were located at Y-junctions, where the Arp2/3 complex was also localized, suggesting a role of the Arp2/3 complex in branch formation. Differential depolymerization experiments suggested that the Arp2/3 complex also provided protection of pointed ends from depolymerization. Actin depolymerizing factor (ADF)/cofilin was excluded from the distal 0.4 micrometer++ of the lamellipodial network of keratocytes and in fibroblasts it was located within the depolymerization-resistant zone. These results suggest that ADF/cofilin, per se, is not sufficient for actin brush depolymerization and a regulatory step is required. Our evidence supports a dendritic nucleation model (Mullins, R.D., J.A. Heuser, and T.D. Pollard. 1998. Proc. Natl. Acad. Sci. USA. 95:6181-6186) for lamellipodial protrusion, which involves treadmilling of a branched actin array instead of treadmilling of individual filaments. In this model, Arp2/3 complex and ADF/cofilin have antagonistic activities. Arp2/3 complex is responsible for integration of nascent actin filaments into the actin network at the cell front and stabilizing pointed ends from depolymerization, while ADF/cofilin promotes filament disassembly at the rear of the brush, presumably by pointed end depolymerization after dissociation of the Arp2/3 complex.",
"title": ""
},
{
"docid": "b81f30a692d57ebc2fdef7df652d0ca2",
"text": "Suppose that Alice wishes to send messages to Bob through a communication channel C1, but her transmissions also reach an eavesdropper Eve through another channel C2. This is the wiretap channel model introduced by Wyner in 1975. The goal is to design a coding scheme that makes it possible for Alice to communicate both reliably and securely. Reliability is measured in terms of Bob's probability of error in recovering the message, while security is measured in terms of the mutual information between the message and Eve's observations. Wyner showed that the situation is characterized by a single constant Cs, called the secrecy capacity, which has the following meaning: for all ε >; 0, there exist coding schemes of rate R ≥ Cs-ε that asymptotically achieve the reliability and security objectives. However, his proof of this result is based upon a random-coding argument. To date, despite consider able research effort, the only case where we know how to construct coding schemes that achieve secrecy capacity is when Eve's channel C2 is an erasure channel, or a combinatorial variation thereof. Polar codes were recently invented by Arikan; they approach the capacity of symmetric binary-input discrete memoryless channels with low encoding and decoding complexity. In this paper, we use polar codes to construct a coding scheme that achieves the secrecy capacity for a wide range of wiretap channels. Our construction works for any instantiation of the wiretap channel model, as long as both C1 and C2 are symmetric and binary-input, and C2 is degraded with respect to C1. Moreover, we show how to modify our construction in order to provide strong security, in the sense defined by Maurer, while still operating at a rate that approaches the secrecy capacity. In this case, we cannot guarantee that the reliability condition will also be satisfied unless the main channel C1 is noiseless, although we believe it can be always satisfied in practice.",
"title": ""
},
{
"docid": "a2c26a8b15cafeb365ad9870f9bbf884",
"text": "Microgrids consist of multiple parallel-connected distributed generation (DG) units with coordinated control strategies, which are able to operate in both grid-connected and islanded mode. Microgrids are attracting more and more attention since they can alleviate the stress of main transmission systems, reduce feeder losses, and improve system power quality. When the islanded microgrids are concerned, it is important to maintain system stability and achieve load power sharing among the multiple parallel-connected DG units. However, the poor active and reactive power sharing problems due to the influence of impedance mismatch of the DG feeders and the different ratings of the DG units are inevitable when the conventional droop control scheme is adopted. Therefore, the adaptive/improved droop control, network-based control methods and cost-based droop schemes are compared and summarized in this paper for active power sharing. Moreover, nonlinear and unbalanced loads could further affect the reactive power sharing when regulating the active power, and it is difficult to share the reactive power accurately only by using the enhanced virtual impedance method. Therefore, the hierarchical control strategies are utilized as supplements of the conventional droop controls and virtual impedance methods. The improved hierarchical control approaches such as the algorithms based on graph theory, multi-agent system, the gain scheduling method and predictive control have been proposed to achieve proper reactive power sharing for islanded microgrids and eliminate the effect of the communication delays on hierarchical control. Finally, the future research trends on islanded microgrids are also discussed in this paper.",
"title": ""
},
{
"docid": "87da90ee583f5aa1777199f67bdefc83",
"text": "The rapid development of computer networks in the past decades has created many security problems related to intrusions on computer and network systems. Intrusion Detection Systems IDSs incorporate methods that help to detect and identify intrusive and non-intrusive network packets. Most of the existing intrusion detection systems rely heavily on human analysts to analyze system logs or network traffic to differentiate between intrusive and non-intrusive network traffic. With the increase in data of network traffic, involvement of human in the detection system is a non-trivial problem. IDS’s ability to perform based on human expertise brings limitations to the system’s capability to perform autonomously over exponentially increasing data in the network. However, human expertise and their ability to analyze the system can be efficiently modeled using soft-computing techniques. Intrusion detection techniques based on machine learning and softcomputing techniques enable autonomous packet detections. They have the potential to analyze the data packets, autonomously. These techniques are heavily based on statistical analysis of data. The ability of the algorithms that handle these data-sets can use patterns found in previous data to make decisions for the new evolving data-patterns in the network traffic. In this paper, we present a rigorous survey study that envisages various soft-computing and machine learning techniques used to build autonomous IDSs. A robust IDSs system lays a foundation to build an efficient Intrusion Detection and Prevention System IDPS.",
"title": ""
},
{
"docid": "2d5a8949119d7881a97693867a009917",
"text": "Labeling a histopathology image as having cancerous regions or not is a critical task in cancer diagnosis; it is also clinically important to segment the cancer tissues and cluster them into various classes. Existing supervised approaches for image classification and segmentation require detailed manual annotations for the cancer pixels, which are time-consuming to obtain. In this paper, we propose a new learning method, multiple clustered instance learning (MCIL) (along the line of weakly supervised learning) for histopathology image segmentation. The proposed MCIL method simultaneously performs image-level classification (cancer vs. non-cancer image), medical image segmentation (cancer vs. non-cancer tissue), and patch-level clustering (different classes). We embed the clustering concept into the multiple instance learning (MIL) setting and derive a principled solution to performing the above three tasks in an integrated framework. In addition, we introduce contextual constraints as a prior for MCIL, which further reduces the ambiguity in MIL. Experimental results on histopathology colon cancer images and cytology images demonstrate the great advantage of MCIL over the competing methods.",
"title": ""
},
{
"docid": "f02b44ff478952f1958ba33d8a488b8e",
"text": "Plagiarism is an illicit act of using other’s work wholly or partially as one’s own in any field such as art, poetry literature, cinema, research and other creative forms of study. It has become a serious crime in academia and research fields and access to wide range of resources on the internet has made the situation even worse. Therefore, there is a need for automatic detection of plagiarism in text. This paper presents a survey of various plagiarism detection techniques used for different languages.",
"title": ""
},
{
"docid": "026a0651177ee631a80aaa7c63a1c32f",
"text": "This paper is an introduction to natural language interfaces to databases (Nlidbs). A brief overview of the history of Nlidbs is rst given. Some advantages and disadvantages of Nlidbs are then discussed, comparing Nlidbs to formal query languages, form-based interfaces, and graphical interfaces. An introduction to some of the linguistic problems Nlidbs have to confront follows, for the beneet of readers less familiar with computational linguistics. The discussion then moves on to Nlidb architectures, porta-bility issues, restricted natural language input systems (including menu-based Nlidbs), and Nlidbs with reasoning capabilities. Some less explored areas of Nlidb research are then presented, namely database updates, meta-knowledge questions, temporal questions, and multi-modal Nlidbs. The paper ends with reeections on the current state of the art.",
"title": ""
},
{
"docid": "02605f4044a69b70673121985f1bd913",
"text": "A novel class of low-cost, small-footprint and high-gain antenna arrays is presented for W-band applications. A 4 × 4 antenna array is proposed and demonstrated using substrate-integrated waveguide (SIW) technology for the design of its feed network and longitudinal slots in the SIW top metallic surface to drive the array antenna elements. Dielectric cubes of low-permittivity material are placed on top of each 1 × 4 antenna array to increase the gain of the circular patch antenna elements. This new design is compared to a second 4 × 4 antenna array which, instead of dielectric cubes, uses vertically stacked Yagi-like parasitic director elements to increase the gain. Measured impedance bandwidths of the two 4 × 4 antenna arrays are about 7.5 GHz (94.2-101.8 GHz) at 18 ± 1 dB gain level, with radiation patterns and gains of the two arrays remaining nearly constant over this bandwidth. While the fabrication effort of the new array involving dielectric cubes is significantly reduced, its measured radiation efficiency of 81 percent is slightly lower compared to 90 percent of the Yagi-like design.",
"title": ""
},
{
"docid": "b05f96e22157b69d7033db35ab38524a",
"text": "Novelty search has shown to be a promising approach for the evolution of controllers for swarms of robots. In existing studies, however, the experimenter had to craft a task-specific behaviour similarity measure. The reliance on hand-crafted similarity measures places an additional burden to the experimenter and introduces a bias in the evolutionary process. In this paper, we propose and compare two generic behaviour similarity measures: combined state count and sampled average state. The proposed measures are based on the values of sensors and effectors recorded for each individual robot of the swarm. The characterisation of the group-level behaviour is then obtained by combining the sensor-effector values from all the robots. We evaluate the proposed measures in an aggregation task and in a resource sharing task. We show that the generic measures match the performance of task-specific measures in terms of solution quality. Our results indicate that the proposed generic measures operate as effective behaviour similarity measures, and that it is possible to leverage the benefits of novelty search without having to craft task-specific similarity measures.",
"title": ""
},
{
"docid": "ba2710c7df05b149f6d2befa8dbc37ee",
"text": "This work proposes a method for blind equalization of possibly non-minimum phase channels using particular infinite impulse response (IIR) filters. In this context, the transfer function of the equalizer is represented by a linear combination of specific rational basis functions. This approach estimates separately the coefficients of the linear expansion and the poles of the rational basis functions by alternating iteratively between an adaptive (fixed pole) estimation of the coefficients and a pole placement method. The focus of the work is mainly on the issue of good pole placement (initialization and updating).",
"title": ""
},
{
"docid": "6b0a4a8c61fb4ceabe3aa3d5664b4b67",
"text": "Most existing approaches for text classification represent texts as vectors of words, namely ``Bag-of-Words.'' This text representation results in a very high dimensionality of feature space and frequently suffers from surface mismatching. Short texts make these issues even more serious, due to their shortness and sparsity. In this paper, we propose using ``Bag-of-Concepts'' in short text representation, aiming to avoid the surface mismatching and handle the synonym and polysemy problem. Based on ``Bag-of-Concepts,'' a novel framework is proposed for lightweight short text classification applications. By leveraging a large taxonomy knowledgebase, it learns a concept model for each category, and conceptualizes a short text to a set of relevant concepts. A concept-based similarity mechanism is presented to classify the given short text to the most similar category. One advantage of this mechanism is that it facilitates short text ranking after classification, which is needed in many applications, such as query or ad recommendation. We demonstrate the usage of our proposed framework through a real online application: Channel-based Query Recommendation. Experiments show that our framework can map queries to channels with a high degree of precision (avg. precision=90.3%), which is critical for recommendation applications.",
"title": ""
},
{
"docid": "32fb1d8492e06b1424ea61d4c28f3c6c",
"text": "Modern IT systems often produce large volumes of event logs, and event pattern discovery is an important log management task. For this purpose, data mining methods have been suggested in many previous works. In this paper, we present the LogCluster algorithm which implements data clustering and line pattern mining for textual event logs. The paper also describes an open source implementation of LogCluster.",
"title": ""
}
] |
scidocsrr
|
8715a064a0406b1de5635d2da80a4508
|
A content account of creative analogies in biologically inspired design
|
[
{
"docid": "ad5ff550d8e326166bb50a7b6bded485",
"text": "Inspiration is useful for exploration and discovery of new solution spaces. Systems in natural and artificial worlds and their functionality are seen as rich sources of inspiration for idea generation. However, unlike in the artificial domain where existing systems are often used for inspiration, those from the natural domain are rarely used in a systematic way for this purpose. Analogy is long regarded as a powerful means for inspiring novel idea generation. One aim of the work reported here is to initiate similar work in the area of systematic biomimetics for product development, so that inspiration from both natural and artificial worlds can be used systematically to help develop novel, analogical ideas for solving design problems. A generic model for representing causality of natural and artificial systems has been developed, and used to structure information in a database of systems from both the domains. These are implemented in a piece of software for automated analogical search of relevant ideas from the databases to solve a given problem. Preliminary experiments at validating the software indicate substantial potential for the approach.",
"title": ""
}
] |
[
{
"docid": "35ce8c11fa7dd22ef0daf9d0bd624978",
"text": "Out-of-vocabulary (OOV) words represent an important source of error in large vocabulary continuous speech recognition (LVCSR) systems. These words cause recognition failures, which propagate through pipeline systems impacting the performance of downstream applications. The detection of OOV regions in the output of a LVCSR system is typically addressed as a binary classification task, where each region is independently classified using local information. In this paper, we show that jointly predicting OOV regions, and including contextual information from each region, leads to substantial improvement in OOV detection. Compared to the state-of-the-art, we reduce the missed OOV rate from 42.6% to 28.4% at 10% false alarm rate.",
"title": ""
},
{
"docid": "91dcf0f281724bd6a5cc8c6479f5d632",
"text": "In this paper, a cable-driven planar parallel haptic interface is presented. First, the velocity equations are derived and the forces in the cables are obtained by the principle of virtual work. Then, an analysis of the wrench-closure workspace is performed and a geometric arrangement of the cables is proposed. Control issues are then discussed and a control scheme is presented. The calibration of the attachment points is also discussed. Finally, the prototype is described and experimental results are provided.",
"title": ""
},
{
"docid": "5637bed8be75d7e79a2c2adb95d4c28e",
"text": "BACKGROUND\nLimited evidence exists to show that adding a third agent to platinum-doublet chemotherapy improves efficacy in the first-line advanced non-small-cell lung cancer (NSCLC) setting. The anti-PD-1 antibody pembrolizumab has shown efficacy as monotherapy in patients with advanced NSCLC and has a non-overlapping toxicity profile with chemotherapy. We assessed whether the addition of pembrolizumab to platinum-doublet chemotherapy improves efficacy in patients with advanced non-squamous NSCLC.\n\n\nMETHODS\nIn this randomised, open-label, phase 2 cohort of a multicohort study (KEYNOTE-021), patients were enrolled at 26 medical centres in the USA and Taiwan. Patients with chemotherapy-naive, stage IIIB or IV, non-squamous NSCLC without targetable EGFR or ALK genetic aberrations were randomly assigned (1:1) in blocks of four stratified by PD-L1 tumour proportion score (<1% vs ≥1%) using an interactive voice-response system to 4 cycles of pembrolizumab 200 mg plus carboplatin area under curve 5 mg/mL per min and pemetrexed 500 mg/m2 every 3 weeks followed by pembrolizumab for 24 months and indefinite pemetrexed maintenance therapy or to 4 cycles of carboplatin and pemetrexed alone followed by indefinite pemetrexed maintenance therapy. The primary endpoint was the proportion of patients who achieved an objective response, defined as the percentage of patients with radiologically confirmed complete or partial response according to Response Evaluation Criteria in Solid Tumors version 1.1 assessed by masked, independent central review, in the intention-to-treat population, defined as all patients who were allocated to study treatment. Significance threshold was p<0·025 (one sided). Safety was assessed in the as-treated population, defined as all patients who received at least one dose of the assigned study treatment. This trial, which is closed for enrolment but continuing for follow-up, is registered with ClinicalTrials.gov, number NCT02039674.\n\n\nFINDINGS\nBetween Nov 25, 2014, and Jan 25, 2016, 123 patients were enrolled; 60 were randomly assigned to the pembrolizumab plus chemotherapy group and 63 to the chemotherapy alone group. 33 (55%; 95% CI 42-68) of 60 patients in the pembrolizumab plus chemotherapy group achieved an objective response compared with 18 (29%; 18-41) of 63 patients in the chemotherapy alone group (estimated treatment difference 26% [95% CI 9-42%]; p=0·0016). The incidence of grade 3 or worse treatment-related adverse events was similar between groups (23 [39%] of 59 patients in the pembrolizumab plus chemotherapy group and 16 [26%] of 62 in the chemotherapy alone group). The most common grade 3 or worse treatment-related adverse events in the pembrolizumab plus chemotherapy group were anaemia (seven [12%] of 59) and decreased neutrophil count (three [5%]); an additional six events each occurred in two (3%) for acute kidney injury, decreased lymphocyte count, fatigue, neutropenia, and sepsis, and thrombocytopenia. In the chemotherapy alone group, the most common grade 3 or worse events were anaemia (nine [15%] of 62) and decreased neutrophil count, pancytopenia, and thrombocytopenia (two [3%] each). One (2%) of 59 patients in the pembrolizumab plus chemotherapy group experienced treatment-related death because of sepsis compared with two (3%) of 62 patients in the chemotherapy group: one because of sepsis and one because of pancytopenia.\n\n\nINTERPRETATION\nCombination of pembrolizumab, carboplatin, and pemetrexed could be an effective and tolerable first-line treatment option for patients with advanced non-squamous NSCLC. This finding is being further explored in an ongoing international, randomised, double-blind, phase 3 study.\n\n\nFUNDING\nMerck & Co.",
"title": ""
},
{
"docid": "7dadeadea2d281b981dcb72506f19366",
"text": "Spacecrafts, which are used for stereoscopic mapping, imaging and telecommunication applications, require fine attitude and stabilization control which has an important role in high precision pointing and accurate stabilization. The conventional techniques for attitude and stabilization control are thrusters, reaction wheels, control moment gyroscopes (CMG) and magnetic torquers. Since reaction wheel can generate relatively smaller torques, they provide very fine stabilization and attitude control. Although conventional PID framework solves many stabilization problems, it is reported that many PID feedback loops are poorly tuned. In this paper, a model reference adaptive LQR control for reaction wheel stabilization problem is implemented. The tracking performance and disturbance rejection capability of proposed controller is found to give smooth motion after abnormal disruptions.",
"title": ""
},
{
"docid": "20ef5a8b6835bedd44d571952b46ca90",
"text": "This paper proposes an XYZ-flexure parallel mechanism (FPM) with large displacement and decoupled kinematics structure. The large-displacement FPM has large motion range more than 1 mm. Moreover, the decoupled XYZ-stage has small cross-axis error and small parasitic rotation. In this study, the typical prismatic joints are investigated, and a new large-displacement prismatic joint using notch hinges is designed. The conceptual design of the FPM is proposed by assembling these modular prismatic joints, and then the optimal design of the FPM is conducted. The analytical models of linear stiffness and dynamics are derived using pseudo-rigid-body (PRB) method. Finally, the numerical simulation using ANSYS is conducted for modal analysis to verify the analytical dynamics equation. Experiments are conducted to verify the proposed design for linear stiffness, cross-axis error and parasitic rotation",
"title": ""
},
{
"docid": "dec3f821a1f9fc8102450a4add31952b",
"text": "Homicide by hanging is an extremely rare incident [1]. Very few cases have been reported in which a person is rendered senseless and then hanged to simulate suicidal death; though there are a lot of cases in wherein a homicide victim has been hung later. We report a case of homicidal hanging of a young Sikh individual found hanging in a well. It became evident from the results of forensic autopsy that the victim had first been given alcohol mixed with pesticides and then hanged by his turban from a well. The rare combination of lynching (homicidal hanging) and use of organo-phosporous pesticide poisoning as a means of homicide are discussed in this paper.",
"title": ""
},
{
"docid": "260dfcd7679ac125204bc50c4a6e2658",
"text": "We present Chronos, a system that enables a single WiFi access point to localize clients to within tens of centimeters. Such a system can bring indoor positioning to homes and small businesses which typically have a single access point. The key enabler underlying Chronos is a novel algorithm that can compute sub-nanosecond time-of-flight using commodity WiFi cards. By multiplying the time-offlight with the speed of light, a MIMO access point computes the distance between each of its antennas and the client, hence localizing it. Our implementation on commodity WiFi cards demonstrates that Chronos’s accuracy is comparable to state-of-the-art localization systems, which use four or five access points.",
"title": ""
},
{
"docid": "fa7ec2419ffc22b1ee43694b5f4e21b9",
"text": "We consider the problem of finding outliers in large multivariate databases. Outlier detection can be applied during the data cleansing process of data mining to identify problems with the data itself, and to fraud detection where groups of outliers are often of particular interest. We use replicator neural networks (RNNs) to provide a measure of the outlyingness of data records. The performance of the RNNs is assessed using a ranked score measure. The effectiveness of the RNNs for outlier detection is demonstrated on two publicly available databases.",
"title": ""
},
{
"docid": "4e35e75d5fc074b1e02f5dded5964c19",
"text": "This paper presents a new bidirectional wireless power transfer (WPT) topology using current fed half bridge converter. Generally, WPT topology with current fed converter uses parallel LC resonant tank network in the transmitter side to compensate the reactive power. However, in medium power application this topology suffers a major drawback that the voltage stress in the inverter switches are considerably high due to high reactive power consumed by the loosely coupled coil. In the proposed topology this is mitigated by adding a suitably designed capacitor in series with the transmitter coil. Both during grid to vehicle and vehicle to grid operations the power flow is controlled through variable switching frequency to achieve extended ZVS of the inverter switches. Detail analysis and converter design procedure is presented for both grid to vehicle and vehicle to grid operations. A 1.2kW lab-prototype is developed and experimental results are presented to verify the analysis.",
"title": ""
},
{
"docid": "e8af6607d171f43f0e1410a5850f10e8",
"text": "Postpartum depression (PPD) is a serious mental health problem. It is prevalent, and offspring are at risk for disturbances in development. Major risk factors include past depression, stressful life events, poor marital relationship, and social support. Public health efforts to detect PPD have been increasing. Standard treatments (e.g., Interpersonal Psychotherapy) and more tailored treatments have been found effective for PPD. Prevention efforts have been less consistently successful. Future research should include studies of epidemiological risk factors and prevalence, interventions aimed at the parenting of PPD mothers, specific diathesis for a subset of PPD, effectiveness trials of psychological interventions, and prevention interventions aimed at addressing mental health issues in pregnant women.",
"title": ""
},
{
"docid": "cccecb08c92f8bcec4a359373a20afcb",
"text": "To solve the problem of the false matching and low robustness in detecting copy-move forgeries, a new method was proposed in this study. It involves the following steps: first, establish a Gaussian scale space; second, extract the orientated FAST key points and the ORB features in each scale space; thirdly, revert the coordinates of the orientated FAST key points to the original image and match the ORB features between every two different key points using the hamming distance; finally, remove the false matched key points using the RANSAC algorithm and then detect the resulting copy-move regions. The experimental results indicate that the new algorithm is effective for geometric transformation, such as scaling and rotation, and exhibits high robustness even when an image is distorted by Gaussian blur, Gaussian white noise and JPEG recompression; the new algorithm even has great detection on the type of hiding object forgery.",
"title": ""
},
{
"docid": "33aa9af9a5f3d3f0b8bf21dca3b13d2f",
"text": "Microarchitectural resources such as caches and predictors can be used to leak information across security domains. Significant prior work has demonstrated attacks and defenses for specific types of such microarchitectural side and covert channels. In this paper, we introduce a general mathematical study of microarchitectural channels using information theory. Our conceptual contribution is a simple mathematical abstraction that captures the common characteristics of all microarchitectural channels. We call this the Bucket model and it reveals that microarchitectural channels are fundamentally different from side and covert channels in networking. We then quantify the communication capacity of several microarchitectural covert channels (including channels that rely on performance counters, AES hardware and memory buses) and measure bandwidths across both KVM based heavy-weight virtualization and light-weight operating-system level isolation. We demonstrate channel capacities that are orders of magnitude higher compared to what was previously considered possible. Finally, we introduce a novel way of detecting intelligent adversaries that try to hide while running covert channel eavesdropping attacks. Our method generalizes a prior detection scheme (that modeled static adversaries) by introducing noise that hides the detection process from an intelligent eavesdropper.",
"title": ""
},
{
"docid": "2c87f9ef35795c89de6b60e1ceff18c8",
"text": "The paper presents a fusion-tracker and pedestrian classifier for color and thermal cameras. The tracker builds a background model as a multi-modal distribution of colors and temperatures. It is constructed as a particle filter that makes a number of informed reversible transformations to sample the model probability space in order to maximize posterior probability of the scene model. Observation likelihoods of moving objects account their 3D locations with respect to the camera and occlusions by other tracked objects as well as static obstacles. After capturing the coordinates and dimensions of moving objects we apply a pedestrian classifier based on periodic gait analysis. To separate humans from other moving objects, such as cars, we detect, in human gait, a symmetrical double helical pattern, that can then be analyzed using the Frieze Group theory. The results of tracking on color and thermal sequences demonstrate that our algorithm is robust to illumination noise and performs well in the outdoor environments.",
"title": ""
},
{
"docid": "2b1adb51eafbcd50675513bc67e42140",
"text": "This text reviews the generic aspects of the central nervous system evolutionary development, emphasizing the developmental features of the brain structures related with behavior and with the cognitive functions that finally characterized the human being. Over the limbic structures that with the advent of mammals were developed on the top of the primitive nervous system of their ancestrals, the ultimate cortical development with neurons arranged in layers constituted the structural base for an enhanced sensory discrimination, for more complex motor activities, and for the development of cognitive and intellectual functions that finally characterized the human being. The knowledge of the central nervous system phylogeny allow us particularly to infer possible correlations between the brain structures that were developed along phylogeny and the behavior of their related beings. In this direction, without discussing its conceptual aspects, this review ends with a discussion about the central nervous system evolutionary development and the emergence of consciousness, in the light of its most recent contributions.",
"title": ""
},
{
"docid": "7cf90874c70202653a47fa165a1a87f7",
"text": "This work proposes a new trust management system (TMS) for the Internet of Things (IoT). The wide majority of these systems are today bound to the assessment of trustworthiness with respect to a single function. As such, they cannot use past experiences related to other functions. Even those that support multiple functions hide this heterogeneity by regrouping all past experiences into a single metric. These restrictions are detrimental to the adaptation of TMSs to today’s emerging M2M and IoT architectures, which are characterized with heterogeneity in nodes, capabilities and services. To overcome these limitations, we design a context-aware and multi-service trust management system fitting the new requirements of the IoT. Simulation results show the good performance of the proposed system and especially highlight its ability to deter a class of common attacks designed to target trust management systems. a 2013 Elsevier Ltd. All rights reserved.",
"title": ""
},
{
"docid": "77379e9c6c0781cd44f4e3208d9e5ca4",
"text": "Recent developments in sensing and communication technologies have led to an explosion in the use of mobile devices such as smartphones and tablets. With the increase in the use of mobile devices, one has to constantly worry about the security and privacy as the loss of a mobile device could compromise personal information of the user. To deal with this problem, continuous authentication (also known as active authentication) systems have been proposed in which users are continuously monitored after the initial access to the mobile device. In this paper, we provide an overview of different continuous authentication methods on mobile devices. We discuss the merits and drawbacks of available approaches and identify promising avenues of research in this rapidly evolving field.",
"title": ""
},
{
"docid": "3810c6b33a895730bc57fdc658d3f72e",
"text": "Comics have been shown to be able to tell a story by guiding the viewers gaze patterns through a sequence of images. However, not much research has been done on how comic techniques affect these patterns. We focused this study to investigate the effect that the structure of a comics panels have on the viewers reading patterns, specifically with the time spent reading the comic and the number of times the viewer fixates on a point. We use two versions of a short comic as a stimulus, one version with four long panels and another with sixteen smaller panels. We collected data using the GazePoint eye tracker, focusing on viewing time and number of fixations, and we collected subjective information about the viewers preferences using a questionnaire. We found that no significant effect between panel structure and viewing time or number of fixations, but those viewers slightly tended to prefer the format of four long panels.",
"title": ""
},
{
"docid": "7010278254ee0fadb7b59cb05169578a",
"text": "INTRODUCTION\nLumbar disc herniation (LDH) is a common condition in adults and can impose a heavy burden on both the individual and society. It is defined as displacement of disc components beyond the intervertebral disc space. Various conservative treatments have been recommended for the treatment of LDH and physical therapy plays a major role in the management of patients. Therapeutic exercise is effective for relieving pain and improving function in individuals with symptomatic LDH. The aim of this systematic review is to evaluate the effectiveness of motor control exercise (MCE) for symptomatic LDH.\n\n\nMETHODS AND ANALYSIS\nWe will include all clinical trial studies with a concurrent control group which evaluated the effect of MCEs in patients with symptomatic LDH. We will search PubMed, SCOPUS, PEDro, SPORTDiscus, CINAHL, CENTRAL and EMBASE with no restriction of language. Primary outcomes of this systematic review are pain intensity and functional disability and secondary outcomes are functional tests, muscle thickness, quality of life, return to work, muscle endurance and adverse events. Study selection and data extraction will be performed by two independent reviewers. The assessment of risk of bias will be implemented using the PEDro scale. Publication bias will be assessed by funnel plots, Begg's and Egger's tests. Heterogeneity will be evaluated using the I2 statistic and the χ2 test. In addition, subgroup analyses will be conducted for population and the secondary outcomes. All meta-analyses will be performed using Stata V.12 software.\n\n\nETHICS AND DISSEMINATION\nNo ethical concerns are predicted. The systematic review findings will be published in a peer-reviewed journal and will also be presented at national/international academic and clinical conferences.\n\n\nTRIAL REGISTRATION NUMBER\nCRD42016038166.",
"title": ""
},
{
"docid": "6934b06f35dc7855a8410329b099ca2f",
"text": "Privacy protection in publishing transaction data is an important problem. A key feature of transaction data is the extreme sparsity, which renders any single technique ineffective in anonymizing such data. Among recent works, some incur high information loss, some result in data hard to interpret, and some suffer from performance drawbacks. This paper proposes to integrate generalization and suppression to reduce information loss. However, the integration is non-trivial. We propose novel techniques to address the efficiency and scalability challenges. Extensive experiments on real world databases show that this approach outperforms the state-of-the-art methods, including global generalization, local generalization, and total suppression. In addition, transaction data anonymized by this approach can be analyzed by standard data mining tools, a property that local generalization fails to provide.",
"title": ""
},
{
"docid": "19339fa01942ad3bf33270aa1f6ceae2",
"text": "This study investigated query formulations by users with {\\it Cognitive Search Intents} (CSIs), which are users' needs for the cognitive characteristics of documents to be retrieved, {\\em e.g. comprehensibility, subjectivity, and concreteness. Our four main contributions are summarized as follows (i) we proposed an example-based method of specifying search intents to observe query formulations by users without biasing them by presenting a verbalized task description;(ii) we conducted a questionnaire-based user study and found that about half our subjects did not input any keywords representing CSIs, even though they were conscious of CSIs;(iii) our user study also revealed that over 50\\% of subjects occasionally had experiences with searches with CSIs while our evaluations demonstrated that the performance of a current Web search engine was much lower when we not only considered users' topical search intents but also CSIs; and (iv) we demonstrated that a machine-learning-based query expansion could improve the performances for some types of CSIs.Our findings suggest users over-adapt to current Web search engines,and create opportunities to estimate CSIs with non-verbal user input.",
"title": ""
}
] |
scidocsrr
|
03b8497dfb86e54bc80bbbc1730be3b6
|
Modeling Cyber-Physical Systems with Semantic Agents
|
[
{
"docid": "73dd590da37ffec2d698142bee2e23fb",
"text": "Agent-based modeling and simulation (ABMS) is a new approach to modeling systems comprised of interacting autonomous agents. ABMS promises to have far-reaching effects on the way that businesses use computers to support decision-making and researchers use electronic laboratories to do research. Some have gone so far as to contend that ABMS is a new way of doing science. Computational advances make possible a growing number of agent-based applications across many fields. Applications range from modeling agent behavior in the stock market and supply chains, to predicting the spread of epidemics and the threat of bio-warfare, from modeling the growth and decline of ancient civilizations to modeling the complexities of the human immune system, and many more. This tutorial describes the foundations of ABMS, identifies ABMS toolkits and development methods illustrated through a supply chain example, and provides thoughts on the appropriate contexts for ABMS versus conventional modeling techniques.",
"title": ""
}
] |
[
{
"docid": "4487f3713062ef734ceab5c7f9ccc6e3",
"text": "In the analysis of machine learning models, it is often convenient to assume that the parameters are IID. This assumption is not satisfied when the parameters are updated through training processes such as SGD. A relaxation of the IID condition is a probabilistic symmetry known as exchangeability. We show the sense in which the weights in MLPs are exchangeable. This yields the result that in certain instances, the layer-wise kernel of fully-connected layers remains approximately constant during training. We identify a sharp change in the macroscopic behavior of networks as the covariance between weights changes from zero.",
"title": ""
},
{
"docid": "b6fff873c084e9a44d870ffafadbc9e7",
"text": "A wide variety of smartphone applications today rely on third-party advertising services, which provide libraries that are linked into the hosting application. This situation is undesirable for both the application author and the advertiser. Advertising libraries require their own permissions, resulting in additional permission requests to users. Likewise, a malicious application could simulate the behavior of the advertising library, forging the user’s interaction and stealing money from the advertiser. This paper describes AdSplit, where we extended Android to allow an application and its advertising to run as separate processes, under separate user-ids, eliminating the need for applications to request permissions on behalf of their advertising libraries, and providing services to validate the legitimacy of clicks, locally and remotely. AdSplit automatically recompiles apps to extract their ad services, and we measure minimal runtime overhead. AdSplit also supports a system resource that allows advertisements to display their content in an embedded HTML widget, without requiring any native code.",
"title": ""
},
{
"docid": "47ee1b71ed10b64110b84e5eecf2857c",
"text": "Measurements for future outdoor cellular systems at 28 GHz and 38 GHz were conducted in urban microcellular environments in New York City and Austin, Texas, respectively. Measurements in both line-of-sight and non-line-of-sight scenarios used multiple combinations of steerable transmit and receive antennas (e.g. 24.5 dBi horn antennas with 10.9° half power beamwidths at 28 GHz, 25 dBi horn antennas with 7.8° half power beamwidths at 38 GHz, and 13.3 dBi horn antennas with 24.7° half power beamwidths at 38 GHz) at different transmit antenna heights. Based on the measured data, we present path loss models suitable for the development of fifth generation (5G) standards that show the distance dependency of received power. In this paper, path loss is expressed in easy-to-use formulas as the sum of a distant dependent path loss factor, a floating intercept, and a shadowing factor that minimizes the mean square error fit to the empirical data. The new models are compared with previous models that were limited to using a close-in free space reference distance. Here, we illustrate the differences of the two modeling approaches, and show that a floating intercept model reduces the shadow factors by several dB and offers smaller path loss exponents while simultaneously providing a better fit to the empirical data. The upshot of these new path loss models is that coverage is actually better than first suggested by work in [1], [7] and [8].",
"title": ""
},
{
"docid": "9e451fe70d74511d2cc5a58b667da526",
"text": "Convolutional Neural Networks (CNNs) are propelling advances in a range of different computer vision tasks such as object detection and object segmentation. Their success has motivated research in applications of such models for medical image analysis. If CNN-based models are to be helpful in a medical context, they need to be precise, interpretable, and uncertainty in predictions must be well understood. In this paper, we develop and evaluate recent advances in uncertainty estimation and model interpretability in the context of semantic segmentation of polyps from colonoscopy images. We evaluate and enhance several architectures of Fully Convolutional Networks (FCNs) for semantic segmentation of colorectal polyps and provide a comparison between these models. Our highest performing model achieves a 76.06% mean IOU accuracy on the EndoScene dataset, a considerable improvement over the previous state-of-the-art.",
"title": ""
},
{
"docid": "b42b17131236abc1ee3066905025aa8c",
"text": "The planet Mars, while cold and arid today, once possessed a warm and wet climate, as evidenced by extensive fluvial features observable on its surface. It is believed that the warm climate of the primitive Mars was created by a strong greenhouse effect caused by a thick CO2 atmosphere. Mars lost its warm climate when most of the available volatile CO2 was fixed into the form of carbonate rock due to the action of cycling water. It is believed, however, that sufficient CO2 to form a 300 to 600 mb atmosphere may still exist in volatile form, either adsorbed into the regolith or frozen out at the south pole. This CO2 may be released by planetary warming, and as the CO2 atmosphere thickens, positive feedback is produced which can accelerate the warming trend. Thus it is conceivable, that by taking advantage of the positive feedback inherent in Mars' atmosphere/regolith CO2 system, that engineering efforts can produce drastic changes in climate and pressure on a planetary scale. In this paper we propose a mathematical model of the Martian CO2 system, and use it to produce analysis which clarifies the potential of positive feedback to accelerate planetary engineering efforts. It is shown that by taking advantage of the feedback, the requirements for planetary engineering can be reduced by about 2 orders of magnitude relative to previous estimates. We examine the potential of various schemes for producing the initial warming to drive the process, including the stationing of orbiting mirrors, the importation of natural volatiles with high greenhouse capacity from the outer solar system, and the production of artificial halocarbon greenhouse gases on the Martian surface through in-situ industry. If the orbital mirror scheme is adopted, mirrors with dimension on the order or 100 km radius are required to vaporize the CO2 in the south polar cap. If manufactured of solar sail like material, such mirrors would have a mass on the order of 200,000 tonnes. If manufactured in space out of asteroidal or Martian moon material, about 120 MWe-years of energy would be needed to produce the required aluminum. This amount of power can be provided by near-term multimegawatt nuclear power units, such as the 5 MWe modules now under consideration for NEP spacecraft. Orbital transfer of very massive bodies from the outer solar system can be accomplished using nuclear thermal rocket engines using the asteroid's volatile material as propellant. Using major planets for gravity assists, the rocket ∆V required to move an outer solar system asteroid onto a collision trajectory with Mars can be as little as 300 m/s. If the asteroid is made of NH3, specific impulses of about 400 s can be attained, and as little as 10% of the asteroid will be required for propellant. Four 5000 MWt NTR engines would require a 10 year burn time to push a 10 billion tonne asteroid through a ∆V of 300 m/s. About 4 such objects would be sufficient to greenhouse Mars. Greenhousing Mars via the manufacture of halocarbon gases on the planet's surface may well be the most practical option. Total surface power requirements to drive planetary warming using this method are calculated and found to be on the order of 1000 MWe, and the required times scale for climate and atmosphere modification is on the order of 50 years. It is concluded that a drastic modification of Martian conditions can be achieved using 21st century technology. The Mars so produced will closely resemble the conditions existing on the primitive Mars. Humans operating on the surface of such a Mars would require breathing gear, but pressure suits would be unnecessary. With outside atmospheric pressures raised, it will be possible to create large dwelling areas by means of very large inflatable structures. Average temperatures could be above the freezing point of water for significant regions during portions of the year, enabling the growth of plant life in the open. The spread of plants could produce enough oxygen to make Mars habitable for animals in several millennia. More rapid oxygenation would require engineering efforts supported by multi-terrawatt power sources. It is speculated that the desire to speed the terraforming of Mars will be a driver for developing such technologies, which in turn will define a leap in human power over nature as dramatic as that which accompanied the creation of post-Renaissance industrial civilization.",
"title": ""
},
{
"docid": "6e4d846272030b160b30d56a60eb2cad",
"text": "MapReduce and Spark are two very popular open source cluster computing frameworks for large scale data analytics. These frameworks hide the complexity of task parallelism and fault-tolerance, by exposing a simple programming API to users. In this paper, we evaluate the major architectural components in MapReduce and Spark frameworks including: shuffle, execution model, and caching, by using a set of important analytic workloads. To conduct a detailed analysis, we developed two profiling tools: (1) We correlate the task execution plan with the resource utilization for both MapReduce and Spark, and visually present this correlation; (2) We provide a break-down of the task execution time for in-depth analysis. Through detailed experiments, we quantify the performance differences between MapReduce and Spark. Furthermore, we attribute these performance differences to different components which are architected differently in the two frameworks. We further expose the source of these performance differences by using a set of micro-benchmark experiments. Overall, our experiments show that Spark is about 2.5x, 5x, and 5x faster than MapReduce, for Word Count, k-means, and PageRank, respectively. The main causes of these speedups are the efficiency of the hash-based aggregation component for combine, as well as reduced CPU and disk overheads due to RDD caching in Spark. An exception to this is the Sort workload, for which MapReduce is 2x faster than Spark. We show that MapReduce’s execution model is more efficient for shuffling data than Spark, thus making Sort run faster on MapReduce.",
"title": ""
},
{
"docid": "6fb1f05713db4e771d9c610fa9c9925d",
"text": "Objectives: Straddle injury represents a rare and complex injury to the female genito urinary tract (GUT). Overall prevention would be the ultimate goal, but due to persistent inhomogenity and inconsistency in definitions and guidelines, or suboptimal coding, the optimal study design for a prevention programme is still missing. Thus, medical records data were tested for their potential use for an injury surveillance registry and their impact on future prevention programmes. Design: Retrospective record analysis out of a 3 year period. Setting: All patients were treated exclusively by the first author. Patients: Six girls, median age 7 years, range 3.5 to 12 years with classical straddle injury. Interventions: Medical treatment and recording according to National and International Standards. Main Outcome Measures: All records were analyzed for accuracy in diagnosis and coding, surgical procedure, time and location of incident and examination findings. Results: All registration data sets were complete. A specific code for “straddle injury” in International Classification of Diseases (ICD) did not exist. Coding followed mainly reimbursement issues and specific information about the injury was usually expressed in an individual style. Conclusions: As demonstrated in this pilot, population based medical record data collection can play a substantial part in local injury surveillance registry and prevention initiatives planning.",
"title": ""
},
{
"docid": "68f0f63fcfa29d3867fa7d2dea6807cc",
"text": "We propose a machine learning framework to capture the dynamics of highfrequency limit order books in financial equity markets and automate real-time prediction of metrics such as mid-price movement and price spread crossing. By characterizing each entry in a limit order book with a vector of attributes such as price and volume at different levels, the proposed framework builds a learning model for each metric with the help of multi-class support vector machines (SVMs). Experiments with real data establish that features selected by the proposed framework are effective for short term price movement forecasts.",
"title": ""
},
{
"docid": "35c299197861d0a57763bbc392e90bb2",
"text": "Imperfect-information games, where players have private information, pose a unique challenge in artificial intelligence. In recent years, Heads-Up NoLimit Texas Hold’em poker, a popular version of poker, has emerged as the primary benchmark for evaluating game-solving algorithms for imperfectinformation games. We demonstrate a winning agent from the 2016 Annual Computer Poker Competition, Baby Tartanian8.",
"title": ""
},
{
"docid": "61953c398f2bcd4fd0ff4662689293a0",
"text": "Today's smartphones and mobile devices typically embed advanced motion sensors. Due to their increasing market penetration, there is a potential for the development of distributed sensing platforms. In particular, over the last few years there has been an increasing interest in monitoring vehicles and driving data, aiming to identify risky driving maneuvers and to improve driver efficiency. Such a driver profiling system can be useful in fleet management, insurance premium adjustment, fuel consumption optimization or CO2 emission reduction. In this paper, we analyze how smartphone sensors can be used to identify driving maneuvers and propose SenseFleet, a driver profile platform that is able to detect risky driving events independently from the mobile device and vehicle. A fuzzy system is used to compute a score for the different drivers using real-time context information like route topology or weather conditions. To validate our platform, we present an evaluation study considering multiple drivers along a predefined path. The results show that our platform is able to accurately detect risky driving events and provide a representative score for each individual driver.",
"title": ""
},
{
"docid": "ff4cfe56f31e21a8f69164790eb39634",
"text": "Active individuals often perform exercises in the heat following heat stress exposure (HSE) regardless of the time-of-day and its variation in body temperature. However, there is no information concerning the diurnal effects of a rise in body temperature after HSE on subsequent exercise performance in a hot environnment. This study therefore investigated the diurnal effects of prior HSE on both sprint and endurance exercise capacity in the heat. Eight male volunteers completed four trials which included sprint and endurance cycling tests at 30 °C and 50% relative humidity. At first, volunteers completed a 30-min pre-exercise routine (30-PR): a seated rest in a temperate environment in AM (AmR) or PM (PmR) (Rest trials); and a warm water immersion at 40 °C to induce a 1 °C increase in core temperature in AM (AmW) or PM (PmW) (HSE trials). Volunteers subsequently commenced exercise at 0800 h in AmR/AmW and at 1700 h in PmR/PmW. The sprint test determined a 10-sec maximal sprint power at 5 kp. Then, the endurance test was conducted to measure time to exhaustion at 60% peak oxygen uptake. Maximal sprint power was similar between trials (p = 0.787). Time to exhaustion in AmW (mean±SD; 15 ± 8 min) was less than AmR (38 ± 16 min; p < 0.01) and PmR (43 ± 24 min; p < 0.01) but similar with PmW (24 ± 9 min). Core temperature was higher from post 30-PR to 6 min into the endurance test in AmW and PmW than AmR and PmR (p < 0.05) and at post 30-PR and the start of the endurance test in PmR than AmR (p < 0.05). The rate of rise in core temperature during the endurance test was greater in AmR than AmW and PmW (p < 0.05). Mean skin temperature was higher from post 30-PR to 6 min into the endurance test in HSE trials than Rest trials (p < 0.05). Mean body temperature was higher from post 30-PR to 6 min into the endurance test in AmW and PmW than AmR and PmR (p < 0.05) and the start to 6 min into the endurance test in PmR than AmR (p < 0.05). Convective, radiant, dry and evaporative heat losses were greater on HSE trials than on Rest trials (p < 0.001). Heart rate and cutaneous vascular conductance were higher at post 30-PR in HSE trials than Rest trials (p < 0.05). Thermal sensation was higher from post 30-PR to the start of the endurance test in AmW and PmW than AmR and PmR (p < 0.05). Perceived exertion from the start to 6 min into the endurance test was higher in HSE trials than Rest trials (p < 0.05). This study demonstrates that an approximately 1 °C increase in core temperature by prior HSE has the diurnal effects on endurance exercise capacity but not on sprint exercise capacity in the heat. Moreover, prior HSE reduces endurance exercise capacity in AM, but not in PM. This reduction is associated with a large difference in pre-exercise core temperature between AM trials which is caused by a relatively lower body temperature in the morning due to the time-of-day variation and contributes to lengthening the attainment of high core temperature during exercise in AmR.",
"title": ""
},
{
"docid": "27136e888c3ebfef4ea7105d68a13ffd",
"text": "The huge amount of (potentially) available spectrum makes millimeter wave (mmWave) a promising candidate for fifth generation cellular networks. Unfortunately, differences in the propagation environment as a function of frequency make it hard to make comparisons between systems operating at mmWave and microwave frequencies. This paper presents a simple channel model for evaluating system level performance in mmWave cellular networks. The model uses insights from measurement results that show mmWave is sensitive to blockages revealing very different path loss characteristics between line-of-sight (LOS) and non-line-of-sight (NLOS) links. The conventional path loss model with a single log-distance path loss function and a shadowing term is replaced with a stochastic path loss model with a distance-dependent LOS probability and two different path loss functions to account for LOS and NLOS links. The proposed model is used to compare microwave and mmWave networks in simulations. It is observed that mmWave networks can provide comparable coverage probability with a dense deployment, leading to much higher data rates thanks to the large bandwidth available in the mmWave spectrum.",
"title": ""
},
{
"docid": "1d7d96d37584398359f9b85bc7741578",
"text": "BACKGROUND\nTwo types of soft tissue filler that are in common use are those formulated primarily with calcium hydroxylapatite (CaHA) and those with cross-linked hyaluronic acid (cross-linked HA).\n\n\nOBJECTIVE\nTo provide physicians with a scientific rationale for determining which soft tissue fillers are most appropriate for volume replacement.\n\n\nMATERIALS\nSix cross-linked HA soft tissue fillers (Restylane and Perlane from Medicis, Scottsdale, AZ; Restylane SubQ from Q-Med, Uppsala, Sweden; and Juvéderm Ultra, Juvéderm Ultra Plus, and Juvéderm Voluma from Allergan, Pringy, France) and a soft tissue filler consisting of CaHA microspheres in a carrier gel containing carboxymethyl cellulose (Radiesse, BioForm Medical, Inc., San Mateo, CA). METHODS The viscosity and elasticity of each filler gel were quantified according to deformation oscillation measurements conducted using a Thermo Haake RS600 Rheometer (Newington, NH) using a plate and plate geometry with a 1.2-mm gap. All measurements were performed using a 35-mm titanium sensor at 30°C. Oscillation measurements were taken at 5 pascal tau (τ) over a frequency range of 0.1 to 10 Hz (interpolated at 0.7 Hz). Researchers chose the 0.7-Hz frequency because it elicited the most reproducible results and was considered physiologically relevant for stresses that are common to the skin. RESULTS The rheological measurements in this study support the concept that soft tissue fillers that are currently used can be divided into three groups. CONCLUSION Rheological evaluation enables the clinician to objectively classify soft tissue fillers, to select specific filler products based on scientific principles, and to reliably predict how these products will perform--lifting, supporting, and sculpting--after they are appropriately injected.",
"title": ""
},
{
"docid": "31756ac6aaa46df16337dbc270831809",
"text": "Broadly speaking, the goal of neuromorphic engineering is to build computer systems that mimic the brain. Spiking Neural Network (SNN) is a type of biologically-inspired neural networks that perform information processing based on discrete-time spikes, different from traditional Artificial Neural Network (ANN). Hardware implementation of SNNs is necessary for achieving high-performance and low-power. We present the Darwin Neural Processing Unit (NPU), a neuromorphic hardware co-processor based on SNN implemented with digitallogic, supporting a maximum of 2048 neurons, 20482 = 4194304 synapses, and 15 possible synaptic delays. The Darwin NPU was fabricated by standard 180 nm CMOS technology with an area size of 5 ×5 mm2 and 70 MHz clock frequency at the worst case. It consumes 0.84 mW/MHz with 1.8 V power supply for typical applications. Two prototype applications are used to demonstrate the performance and efficiency of the hardware implementation. 脉冲神经网络(SNN)是一种基于离散神经脉冲进行信息处理的人工神经网络。本文提出的“达尔文”芯片是一款基于SNN的类脑硬件协处理器。它支持神经网络拓扑结构,神经元与突触各种参数的灵活配置,最多可支持2048个神经元,四百万个神经突触及15个不同的突触延迟。该芯片采用180纳米CMOS工艺制造,面积为5x5平方毫米,最坏工作频率达到70MHz,1.8V供电下典型应用功耗为0.84mW/MHz。基于该芯片实现了两个应用案例,包括手写数字识别和运动想象脑电信号分类。",
"title": ""
},
{
"docid": "357e09114978fc0ac1fb5838b700e6ca",
"text": "Instance level video object segmentation is an important technique for video editing and compression. To capture the temporal coherence, in this paper, we develop MaskRNN, a recurrent neural net approach which fuses in each frame the output of two deep nets for each object instance — a binary segmentation net providing a mask and a localization net providing a bounding box. Due to the recurrent component and the localization component, our method is able to take advantage of long-term temporal structures of the video data as well as rejecting outliers. We validate the proposed algorithm on three challenging benchmark datasets, the DAVIS-2016 dataset, the DAVIS-2017 dataset, and the Segtrack v2 dataset, achieving state-of-the-art performance on all of them.",
"title": ""
},
{
"docid": "46980b89e76bc39bf125f63ed9781628",
"text": "In this paper, a design of miniaturized 3-way Bagley polygon power divider (BPD) is presented. The design is based on using non-uniform transmission lines (NTLs) in each arm of the divider instead of the conventional uniform ones. For verification purposes, a 3-way BPD is designed, simulated, fabricated, and measured. Besides suppressing the fundamental frequency's odd harmonics, a size reduction of almost 30% is achieved.",
"title": ""
},
{
"docid": "6784e31e2ec313698a622a7e78288f68",
"text": "Web-based technology is often the technology of choice for distance education given the ease of use of the tools to browse the resources on the Web, the relative affordability of accessing the ubiquitous Web, and the simplicity of deploying and maintaining resources on the WorldWide Web. Many sophisticated web-based learning environments have been developed and are in use around the world. The same technology is being used for electronic commerce and has become extremely popular. However, while there are clever tools developed to understand on-line customer’s behaviours in order to increase sales and profit, there is very little done to automatically discover access patterns to understand learners’ behaviour on web-based distance learning. Educators, using on-line learning environments and tools, have very little support to evaluate learners’ activities and discriminate between different learners’ on-line behaviours. In this paper, we discuss some data mining and machine learning techniques that could be used to enhance web-based learning environments for the educator to better evaluate the leaning process, as well as for the learners to help them in their learning endeavour.",
"title": ""
},
{
"docid": "3b9b49f8c2773497f8e05bff4a594207",
"text": "SSD (Single Shot Detector) is one of the state-of-the-art object detection algorithms, and it combines high detection accuracy with real-time speed. However, it is widely recognized that SSD is less accurate in detecting small objects compared to large objects, because it ignores the context from outside the proposal boxes. In this paper, we present CSSD–a shorthand for context-aware single-shot multibox object detector. CSSD is built on top of SSD, with additional layers modeling multi-scale contexts. We describe two variants of CSSD, which differ in their context layers, using dilated convolution layers (DiCSSD) and deconvolution layers (DeCSSD) respectively. The experimental results show that the multi-scale context modeling significantly improves the detection accuracy. In addition, we study the relationship between effective receptive fields (ERFs) and the theoretical receptive fields (TRFs), particularly on a VGGNet. The empirical results further strengthen our conclusion that SSD coupled with context layers achieves better detection results especially for small objects (+3.2%AP@0.5 on MSCOCO compared to the newest SSD), while maintaining comparable runtime performance.",
"title": ""
},
{
"docid": "fe3a2ef6ffc3e667f73b19f01c14d15a",
"text": "The study of socio-technical systems has been revolutionized by the unprecedented amount of digital records that are constantly being produced by human activities such as accessing Internet services, using mobile devices, and consuming energy and knowledge. In this paper, we describe the richest open multi-source dataset ever released on two geographical areas. The dataset is composed of telecommunications, weather, news, social networks and electricity data from the city of Milan and the Province of Trentino. The unique multi-source composition of the dataset makes it an ideal testbed for methodologies and approaches aimed at tackling a wide range of problems including energy consumption, mobility planning, tourist and migrant flows, urban structures and interactions, event detection, urban well-being and many others.",
"title": ""
}
] |
scidocsrr
|
584a295353653bc5ebdc6639c1b72f70
|
Open Problems in Universal Induction & Intelligence
|
[
{
"docid": "4545a74d04769f6b251da9da7b357d09",
"text": "Despite a long history of research and debate, there is still no standard definition of intelligence. This has lead some to believe that intelligence may be approximately described, but cannot be fully defined. We believe that this degree of pessimism is too strong. Although there is no single standard definition, if one surveys the many definitions that have been proposed, strong similarities between many of the definitions quickly become obvious. In many cases different definitions, suitably interpreted, actually say the same thing but in different words. This observation lead us to believe that a single general and encompassing definition for arbitrary systems was possible. Indeed we have constructed a formal definition of intelligence, called universal intelligence [21], which has strong connections to the theory of optimal learning agents [19]. Rather than exploring very general formal definitions of intelligence, here we will instead take the opportunity to present the many informal definitions that we have collected over the years. Naturally, compiling a complete list would be impossible as many definitions of intelligence are buried deep inside articles and books. Nevertheless, the 70 odd definitions presented below are, to the best of our knowledge, the largest and most well referenced collection there is. We continue to add to this collect as we discover further definitions, and keep the most up to date version of the collection available online [22]. If you know of additional definitions that we could add, please send us an email.",
"title": ""
}
] |
[
{
"docid": "27cc510f79a4ed76da42046b49bbb9fd",
"text": "This article reports the orthodontic treatment ofa 25-year-old female patient whose chief complaint was the inclination of the maxillary occlusal plane in front view. The individualized vertical placement of brackets is described. This placement made possible a symmetrical occlusal plane to be achieved in a rather straightforward manner without the need for further technical resources.",
"title": ""
},
{
"docid": "525a819d97e84862d4190b1e0aa4acc0",
"text": "HELIOS2014 is a 2D soccer simulation team which has been participating in the RoboCup competition since 2000. We recently focus on an online multiagent planning using tree search methodology. This paper describes the overview of our search framework and an evaluation method to select the best action sequence.",
"title": ""
},
{
"docid": "1466bdb9a7f5662c8a15de9009bc7687",
"text": "Mining opinions and analyzing sentiments from social network data help in various fields such as even prediction, analyzing overall mood of public on a particular social issue and so on. This paper involves analyzing the mood of the society on a particular news from Twitter posts. The key idea of the paper is to increase the accuracy of classification by including Natural Language Processing Techniques (NLP) especially semantics and Word Sense Disambiguation. The mined text information is subjected to Ensemble classification to analyze the sentiment. Ensemble classification involves combining the effect of various independent classifiers on a particular classification problem. Experiments conducted demonstrate that ensemble classifier outperforms traditional machine learning classifiers by 3-5%.",
"title": ""
},
{
"docid": "f18dc5d572f60da7c85d50e6a42de2c9",
"text": "Recent developments in remote sensing are offering a promising opportunity to rethink conventional control strategies of wind turbines. With technologies such as LIDAR, the information about the incoming wind field - the main disturbance to the system - can be made available ahead of time. Feedforward control can be easily combined with traditional collective pitch feedback controllers and has been successfully tested on real systems. Nonlinear model predictive controllers adjusting both collective pitch and generator torque can further reduce structural loads in simulations but have higher computational times compared to feedforward or linear model predictive controller. This paper compares a linear and a commercial nonlinear model predictive controller to a baseline controller. On the one hand simulations show that both controller have significant improvements if used along with the preview of the rotor effective wind speed. On the other hand the nonlinear model predictive controller can achieve better results compared to the linear model close to the rated wind speed.",
"title": ""
},
{
"docid": "90a9e56cc5a2f9c149dfb33d3446f095",
"text": "The author explores the viability of a comparative approach to personality research. A review of the diverse animal-personality literature suggests that (a) most research uses trait constructs, focuses on variation within (vs. across) species, and uses either behavioral codings or trait ratings; (b) ratings are generally reliable and show some validity (7 parameters that could influence reliability and 4 challenges to validation are discussed); and (c) some dimensions emerge across species, but summaries are hindered by a lack of standard descriptors. Arguments for and against cross-species comparisons are discussed, and research guidelines are suggested. Finally, a research agenda guided by evolutionary and ecological principles is proposed. It is concluded that animal studies provide unique opportunities to examine biological, genetic, and environmental bases of personality and to study personality change, personality-health links, and personality perception.",
"title": ""
},
{
"docid": "a1f79badfd7c33b0f6348b58c449b155",
"text": "Athlete identification is important for sport video content analysis since users often care about the video clips with their preferred athletes. In this paper, we propose a method for athlete identification by combing the segmentation, tracking and recognition procedures into a coarse-to-fine scheme for jersey number (digital characters on sport shirt) detection. Firstly, image segmentation is employed to separate the jersey number regions with its background. And size/pipe-like attributes of digital characters are used to filter out candidates. Then, a K-NN (K nearest neighbor) classifier is employed to classify a candidate into a digit in “0-9” or negative. In the recognition procedure, we use the Zernike moment features, which are invariant to rotation and scale for digital shape recognition. Synthetic training samples with different fonts are used to represent the pattern of digital characters with non-rigid deformation. Once a character candidate is detected, a SSD (smallest square distance)-based tracking procedure is started. The recognition procedure is performed every several frames in the tracking process. After tracking tens of frames, the overall recognition results are combined to determine if a candidate is a true jersey number or not by a voting procedure. Experiments on several types of sports video shows encouraging result.",
"title": ""
},
{
"docid": "78041edf455a96c60d1ceea68c857785",
"text": "Sequence-to-sequence models provide a simple and elegant solution for building speech recognition systems by folding separate components of a typical system, namely acoustic (AM), pronunciation (PM) and language (LM) models into a single neural network. In this work, we look at one such sequence-to-sequence model, namely listen, attend and spell (LAS) [1], and explore the possibility of training a single model to serve different English dialects, which simplifies the process of training multi-dialect systems without the need for separate AM, PM and LMs for each dialect. We show that simply pooling the data from all dialects into one LAS model falls behind the performance of a model fine-tuned on each dialect. We then look at incorporating dialect-specific information into the model, both by modifying the training targets by inserting the dialect symbol at the end of the original grapheme sequence and also feeding a 1-hot representation of the dialect information into all layers of the model. Experimental results on seven English dialects show that our proposed system is effective in modeling dialect variations within a single LAS model, outperforming a LAS model trained individually on each of the seven dialects by 3.1~16.5% relative.",
"title": ""
},
{
"docid": "24902498d03f15aa63110e8cd4ee8a83",
"text": "Precision robotic pollination systems can not only fill the gap of declining natural pollinators, but can also surpass them in efficiency and uniformity, helping to feed the fast-growing human population on Earth. This paper presents the design and ongoing development of an autonomous robot named “BrambleBee”, which aims at pollinating bramble plants in a greenhouse environment. Partially inspired by the ecology and behavior of bees, BrambleBee employs state-of-the-art localization and mapping, visual perception, path planning, motion control, and manipulation techniques to create an efficient and robust autonomous pollination system.",
"title": ""
},
{
"docid": "225b834e820b616e0ccfed7259499fd6",
"text": "Introduction: Actinic cheilitis (AC) is a lesion potentially malignant that affects the lips after prolonged exposure to solar ultraviolet (UV) radiation. The present study aimed to assess and describe the proliferative cell activity, using silver-stained nucleolar organizer region (AgNOR) quantification proteins, and to investigate the potential associations between AgNORs and the clinical aspects of AC lesions. Materials and methods: Cases diagnosed with AC were selected and reviewed from Center of Histopathological Diagnosis of the Institute of Biological Sciences, Passo Fundo University, Brazil. Clinical data including clinical presentation of the patients affected with AC were collected. The AgNOR techniques were performed in all recovered cases. The different microscopic areas of interest were printed with magnification of *1000, and in each case, 200 epithelial cell nuclei were randomly selected. The mean quantity in each nucleus for NORs was recorded. One-way analysis of variance was used for statistical analysis. Results: A total of 22 cases of AC were diagnosed. The patients were aged between 46 and 75 years (mean age: 55 years). Most of the patients affected were males presenting asymptomatic white plaque lesions in the lower lip. The mean value quantified for AgNORs was 2.4 ± 0.63, ranging between 1.49 and 3.82. No statistically significant difference was observed associating the quantity of AgNORs with the clinical aspects collected from the patients (p > 0.05). Conclusion: The present study reports the lack of association between the proliferative cell activity and the clinical aspects observed in patients affected by AC through the quantification of AgNORs. Clinical significance: Knowing the potential relation between the clinical aspects of AC and the proliferative cell activity quantified by AgNORs could play a significant role toward the early diagnosis of malignant lesions in the clinical practice. Keywords: Actinic cheilitis, Proliferative cell activity, Silver-stained nucleolar organizer regions.",
"title": ""
},
{
"docid": "3cf60753c37f2520188b26e67e243b6c",
"text": "The growing dependence of critical infrastructures and industrial automation on interconnected physical and cyber-based control systems has resulted in a growing and previously unforeseen cyber security threat to supervisory control and data acquisition (SCADA) and distributed control systems (DCSs). It is critical that engineers and managers understand these issues and know how to locate the information they need. This paper provides a broad overview of cyber security and risk assessment for SCADA and DCS, introduces the main industry organizations and government groups working in this area, and gives a comprehensive review of the literature to date. Major concepts related to the risk assessment methods are introduced with references cited for more detail. Included are risk assessment methods such as HHM, IIM, and RFRM which have been applied successfully to SCADA systems with many interdependencies and have highlighted the need for quantifiable metrics. Presented in broad terms is probability risk analysis (PRA) which includes methods such as FTA, ETA, and FEMA. The paper concludes with a general discussion of two recent methods (one based on compromise graphs and one on augmented vulnerability trees) that quantitatively determine the probability of an attack, the impact of the attack, and the reduction in risk associated with a particular countermeasure.",
"title": ""
},
{
"docid": "2d0121e8509d09571d8973da784440a5",
"text": "In this paper we examine the suitability of BPMN for business process modelling, using the Workflow Patterns as an evaluation framework. The Workflow Patterns are a collection of patterns developed for assessing control-flow, data and resource capabilities in the area of Process Aware Information Systems (PAIS). In doing so, we provide a comprehensive evaluation of the capabilities of BPMN, and its strengths and weaknesses when utilised for business process modelling. The analysis provided for BPMN is part of a larger effort aiming at an unbiased and vendor-independent survey of the suitability and the expressive power of some mainstream process modelling languages. It is a sequel to an analysis series where languages like BPEL and UML 2.0 A.D are evaluated.",
"title": ""
},
{
"docid": "294ac617bbd49afe95c278836fa4c9ec",
"text": "We present a practical lock-free shared data structure that efficiently implements the operations of a concurrent deque as well as a general doubly linked list. The implementation supports parallelism for disjoint accesses and uses atomic primitives which are available in modern computer systems. Previously known lock-free algorithms of doubly linked lists are either based on non-available atomic synchronization primitives, only implement a subset of the functionality, or are not designed for disjoint accesses. Our algorithm only requires single-word compare-and-swap atomic primitives, supports fully dynamic list sizes, and allows traversal also through deleted nodes and thus avoids unnecessary operation retries. We have performed an empirical study of our new algorithm on two different multiprocessor platforms. Results of the experiments performed under high contention show that the performance of our implementation scales linearly with increasing number of processors. Considering deque implementations and systems with low concurrency, the algorithm by Michael shows the best performance. However, as our algorithm is designed for disjoint accesses, it performs significantly better on systems with high concurrency and non-uniform memory architecture. © 2008 Elsevier Inc. All rights reserved.",
"title": ""
},
{
"docid": "b55d2448633f70da4830565268a2b590",
"text": "This paper proposes an online tree-based Bayesian approach for reinforcement learning. For inference, we employ a generalised context tree model. This defines a distribution on multivariate Gaussian piecewise-linear models, which can be updated in closed form. The tree structure itself is constructed using the cover tree method, which remains efficient in high dimensional spaces. We combine the model with Thompson sampling and approximate dynamic programming to obtain effective exploration policies in unknown environments. The flexibility and computational simplicity of the model render it suitable for many reinforcement learning problems in continuous state spaces. We demonstrate this in an experimental comparison with a Gaussian process model, a linear model and simple least squares policy iteration.",
"title": ""
},
{
"docid": "c00665e950eadf8cd9b707ac82a3f818",
"text": "We propose the deep hierarchical network (DHN) for the quantitative analysis of facial palsy. Facial palsy, also known as Bell’s palsy, is the most common type of facial nerve palsy that results in the loss of muscle control in the affected facial regions. Typical symptoms include facial deformity and facial expression dysfunction. To the best of our best knowledge, all approaches for the automatic detection of facial palsy consider hand-crafted features. This paper reports the first deep-learning-based approach developed for the real-time quantitative analysis of facial palsy. The proposed DHN consists of three component networks: the first detects the subject’s face, the second detects the facial landmarks and line segments on the detected face, and the third detects the local palsy regions. The first component network is built on the YOLO2 detector. The second component network is developed on a fused network architecture that incorporates a line segment learning network for locating the facial landmarks and line segments. The third component network is developed on an object detection network with the line-segment-embedded input that combines the landmarked region and the line segments detected by the second component network. The novelties of this research include: 1) the modification of a state-of-the-art edge detector for extracting the facial line segments; 2) the embedding of the line segment learning for the detection of facial landmarks and local palsy regions; 3) the quantitative description of the facial palsy syndrome intensity; and 4) the release of the first clinically labeled database, the YouTube Facial Palsy (YFP) database. The making of the YFP database solves the issue that previous methods were all evaluated on proprietary databases, making the comparison of different methods extremely difficult. The YFP database includes 32 videos of 21 patients collected from YouTube and labeled by clinic specialists. To enhance the robustness against facial expression variations, we include the CK+ facial expression database in the training. We show that the proposed DHN not only just detects the local palsy regions but also captures the intensity of the facial palsy syndrome over time, enabling the quantitative description of the syndrome. The experiments show that the proposed approach offers an accurate and efficient real-time solution for facial palsy analysis.",
"title": ""
},
{
"docid": "545c43532852acbb4adb48fedcca7ccc",
"text": "Spin-Torque Transfer Magnetic RAM (STT MRAM) is a promising candidate for future universal memory. It combines the desirable attributes of current memory technologies such as SRAM, DRAM and flash memories. It also solves the key drawbacks of conventional MRAM technology: poor scalability and high write current. In this paper, we analyzed and modeled the failure probabilities of STT MRAM cells due to parameter variations. Based on the model, we developed an efficient simulation tool to capture the coupled electro/magnetic dynamics of spintronic device, leading to effective prediction for memory yield. We also developed a statistical optimization methodology to minimize the memory failure probability. The proposed methodology can be used at an early stage of the design cycle to enhance memory yield.",
"title": ""
},
{
"docid": "18c30c601e5f52d5117c04c85f95105b",
"text": "Crohn's disease is a relapsing systemic inflammatory disease, mainly affecting the gastrointestinal tract with extraintestinal manifestations and associated immune disorders. Genome wide association studies identified susceptibility loci that--triggered by environmental factors--result in a disturbed innate (ie, disturbed intestinal barrier, Paneth cell dysfunction, endoplasmic reticulum stress, defective unfolded protein response and autophagy, impaired recognition of microbes by pattern recognition receptors, such as nucleotide binding domain and Toll like receptors on dendritic cells and macrophages) and adaptive (ie, imbalance of effector and regulatory T cells and cytokines, migration and retention of leukocytes) immune response towards a diminished diversity of commensal microbiota. We discuss the epidemiology, immunobiology, amd natural history of Crohn's disease; describe new treatment goals and risk stratification of patients; and provide an evidence based rational approach to diagnosis (ie, work-up algorithm, new imaging methods [ie, enhanced endoscopy, ultrasound, MRI and CT] and biomarkers), management, evolving therapeutic targets (ie, integrins, chemokine receptors, cell-based and stem-cell-based therapies), prevention, and surveillance.",
"title": ""
},
{
"docid": "f9fbbbebde6feede5cc34afb60f854cd",
"text": "Software has bugs, and fixing those bugs pervades the software engineering process. It is folklore that bug fixes are often buggy themselves, resulting in bad fixes, either failing to fix a bug or creating new bugs. To confirm this folklore, we explored bug databases of the Ant, AspectJ, and Rhino projects, and found that bad fixes comprise as much as 9% of all bugs. Thus, detecting and correcting bad fixes is important for improving the quality and reliability of software. However, no prior work has systematically considered this bad fix problem, which this paper introduces and formalizes. In particular, the paper formalizes two criteria to determine whether a fix resolves a bug: coverage and disruption. The coverage of a fix measures the extent to which the fix correctly handles all inputs that may trigger a bug, while disruption measures the deviations from the program's intended behavior after the application of a fix. This paper also introduces a novel notion of distance-bounded weakest precondition as the basis for the developed practical techniques to compute the coverage and disruption of a fix.\n To validate our approach, we implemented Fixation, a prototype that automatically detects bad fixes for Java programs. When it detects a bad fix, Fixation returns an input that still triggers the bug or reports a newly introduced bug. Programmers can then use that bug-triggering input to refine or reformulate their fix. We manually extracted fixes drawn from real-world projects and evaluated Fixation against them: Fixation successfully detected the extracted bad fixes.",
"title": ""
},
{
"docid": "59bbad311162d1bd8b145554c3861e53",
"text": "Satellite images are used in many applications like military, forecasting, astronomy, and geographical information. Satellite images have to face spatial and spectral resolution problems due to scattering, atmospheric conditions, etc. , also they have poor perception. This limitation of resolution needs to be overcome before further processing. The goal of image resolution enhancement is to improve specific features of an image for its correct representation. Better resolution is obtained by applying enhancement techniques on blurred and noisy images. In this paper various image enhancement techniques under wavelet domain like WZP, DWT, and DT-CWT are discussed. This paper also gives selection of suitable enhancement technique",
"title": ""
},
{
"docid": "7bd4691f1995bbe6bd1591191b0f4f87",
"text": "In this paper, we present a system developed for content-based broadcasted news video browsing for home users. There are three main factors that distinguish our work from other similar ones. First, we have integrated the image and audio analysis results in identifying news segments. Second, we use the video OCR technology to detect text from frames, which provides a good source of textual information for story classification when transcripts and close captions are not available. Finally, natural language processing (NLP) technologies are used to perform automated categorization of news stories based on the texts obtained from close caption or video OCR process. Based on these video structure and content analysis technologies, we have developed two advanced video browsers for home users: intelligent highlight player and HTML-based video browser.",
"title": ""
}
] |
scidocsrr
|
456efc967f72ee4ee38118d7573ee762
|
Concolic Execution on Small-Size Binaries: Challenges and Empirical Study
|
[
{
"docid": "70c0c2d5209d6cd7b0bae3378d8e400b",
"text": "The automatic exploit generation challenge is given a program, automatically find vulnerabilities and generate exploits for them. In this paper we present AEG, the first end-to-end system for fully automatic exploit generation. We used AEG to analyze 14 open-source projects and successfully generated 16 control flow hijacking exploits. Two of the generated exploits (expect-5.43 and htget-0.93) are zero-day exploits against unknown vulnerabilities. Our contributions are: 1) we show how exploit generation for control flow hijack attacks can be modeled as a formal verification problem, 2) we propose preconditioned symbolic execution, a novel technique for targeting symbolic execution, 3) we present a general approach for generating working exploits once a bug is found, and 4) we build the first end-to-end system that automatically finds vulnerabilities and generates exploits that produce a shell.",
"title": ""
},
{
"docid": "cc7033023e1c5a902dfa10c8346565c4",
"text": "Satisfiability Modulo Theories (SMT) problem is a decision problem for logical first order formulas with respect to combinations of background theories such as: arithmetic, bit-vectors, arrays, and uninterpreted functions. Z3 is a new and efficient SMT Solver freely available from Microsoft Research. It is used in various software verification and analysis applications.",
"title": ""
},
{
"docid": "c62bc7391e55d66c9e27befe81446ebe",
"text": "Opaque predicates have been widely used to insert superfluous branches for control flow obfuscation. Opaque predicates can be seamlessly applied together with other obfuscation methods such as junk code to turn reverse engineering attempts into arduous work. Previous efforts in detecting opaque predicates are far from mature. They are either ad hoc, designed for a specific problem, or have a considerably high error rate. This paper introduces LOOP, a Logic Oriented Opaque Predicate detection tool for obfuscated binary code. Being different from previous work, we do not rely on any heuristics; instead we construct general logical formulas, which represent the intrinsic characteristics of opaque predicates, by symbolic execution along a trace. We then solve these formulas with a constraint solver. The result accurately answers whether the predicate under examination is opaque or not. In addition, LOOP is obfuscation resilient and able to detect previously unknown opaque predicates. We have developed a prototype of LOOP and evaluated it with a range of common utilities and obfuscated malicious programs. Our experimental results demonstrate the efficacy and generality of LOOP. By integrating LOOP with code normalization for matching metamorphic malware variants, we show that LOOP is an appealing complement to existing malware defenses.",
"title": ""
}
] |
[
{
"docid": "53fca78f9ecbfe0a88eb1df8596976e1",
"text": "As there has been an explosive increase in wireless data traffic, mmw communication has become one of the most attractive techniques in the 5G mobile communications systems. Although mmw communication systems have been successfully applied to indoor scenarios, various external factors in an outdoor environment limit the applications of mobile communication systems working at the mmw bands. In this article, we discuss the issues involved in the design of antenna array architecture for future 5G mmw systems, in which the antenna elements can be deployed in the shapes of a cross, circle, or hexagon, in addition to the conventional rectangle. The simulation results indicate that while there always exists a non-trivial gain fluctuation in other regular antenna arrays, the circular antenna array has a flat gain in the main lobe of the radiation pattern with varying angles. This makes the circular antenna array more robust to angle variations that frequently occur due to antenna vibration in an outdoor environment. In addition, in order to guarantee effective coverage of mmw communication systems, possible solutions such as distributed antenna systems and cooperative multi-hop relaying are discussed, together with the design of mmw antenna arrays. Furthermore, other challenges for the implementation of mmw cellular networks, for example, blockage, communication security, hardware development, and so on, are discussed, as are potential solutions.",
"title": ""
},
{
"docid": "07c2edb27aa6ac918d6ad681af82e34d",
"text": "This paper presents a cooperative perception system for multiple heterogeneous UAVs. It considers different kind of sensors: infrared and visual cameras and fire detectors. The system is based on a set of multipurpose low-level image-processing functions including segmentation, stabilization of sequences of images and geo-referencing, and it also involves data fusion algorithms for cooperative perception. It has been tested in field experiments that pursued autonomous multi-UAV cooperative detection, monitoring and measurement of forest fires. This paper presents the overall architecture of the perception system, describes some of the implemented cooperative perception techniques and shows experimental results on automatic forest fire detection and localization with cooperating UAVs.",
"title": ""
},
{
"docid": "237b178f5f6640e6d3f14956760355c1",
"text": "Automatic music transcription is considered by many to be the Holy Grail in the field of music signal analysis. However, the performance of transcription systems is still significantly below that of a human expert, and accuracies reported in recent years seem to have reached a limit, although the field is still very active. In this paper we analyse limitations of current methods and identify promising directions for future research. Current transcription methods use general purpose models which are unable to capture the rich diversity found in music signals. In order to overcome the limited performance of transcription systems, algorithms have to be tailored to specific use-cases. Semiautomatic approaches are another way of achieving a more reliable transcription. Also, the wealth of musical scores and corresponding audio data now available are a rich potential source of training data, via forced alignment of audio to scores, but large scale utilisation of such data has yet to be attempted. Other promising approaches include the integration of information across different methods and musical aspects.",
"title": ""
},
{
"docid": "04d7b3e3584d89d5a3bc5c22c3fd1438",
"text": "With the widespread use of information technologies, information networks are becoming increasingly popular to capture complex relationships across various disciplines, such as social networks, citation networks, telecommunication networks, and biological networks. Analyzing these networks sheds light on different aspects of social life such as the structure of societies, information diffusion, and communication patterns. In reality, however, the large scale of information networks often makes network analytic tasks computationally expensive or intractable. Network representation learning has been recently proposed as a new learning paradigm to embed network vertices into a low-dimensional vector space, by preserving network topology structure, vertex content, and other side information. This facilitates the original network to be easily handled in the new vector space for further analysis. In this survey, we perform a comprehensive review of the current literature on network representation learning in the data mining and machine learning field. We propose new taxonomies to categorize and summarize the state-of-the-art network representation learning techniques according to the underlying learning mechanisms, the network information intended to preserve, as well as the algorithmic designs and methodologies. We summarize evaluation protocols used for validating network representation learning including published benchmark datasets, evaluation methods, and open source algorithms. We also perform empirical studies to compare the performance of representative algorithms on common datasets, and analyze their computational complexity. Finally, we suggest promising research directions to facilitate future study.",
"title": ""
},
{
"docid": "cd23b0dfd98fb42513229070035e0aa9",
"text": "Sixteen residents in long-term care with advanced dementia (14 women; average age = 88) showed significantly more constructive engagement (defined as motor or verbal behaviors in response to an activity), less passive engagement (defined as passively observing an activity), and more pleasure while participating in Montessori-based programming than in regularly scheduled activities programming. Principles of Montessori-based programming, along with examples of such programming, are presented. Implications of the study and methods for expanding the use of Montessori-based dementia programming are discussed.",
"title": ""
},
{
"docid": "d90d40a59f91b59bd63a3c52a8d715a4",
"text": "The paradigm shift from planar (two dimensional (2D)) to vertical (three-dimensional (3D)) models has placed the NAND flash technology on the verge of a design evolution that can handle the demands of next-generation storage applications. However, it also introduces challenges that may obstruct the realization of such 3D NAND flash. Specifically, we observed that the fast threshold drift (fast-drift) in a charge-trap flash-based 3D NAND cell can make it lose a critical fraction of the stored charge relatively soon after programming and generate errors.\n In this work, we first present an elastic read reference (VRef) scheme (ERR) for reducing such errors in ReveNAND—our fast-drift aware 3D NAND design. To address the inherent limitation of the adaptive VRef, we introduce a new intra-block page organization (hitch-hike) that can enable stronger error correction for the error-prone pages. In addition, we propose a novel reinforcement-learning-based smart data refill scheme (iRefill) to counter the impact of fast-drift with minimum performance and hardware overhead. Finally, we present the first analytic model to characterize fast-drift and evaluate its system-level impact. Our results show that, compared to conventional 3D NAND design, our ReveNAND can reduce fast-drift errors by 87%, on average, and can lower the ECC latency and energy overheads by 13× and 10×, respectively.",
"title": ""
},
{
"docid": "11399ccfc503e9f43402896e5871a4d8",
"text": "This work investigated using n-grams, parts-ofspeech and support vector machines for detecting the customer intents in the user generated contents. The work demonstrated a system of categorization of customer intents that is concise and useful for business purposes. We examined possible sources of text posts to be analyzed using three text mining algorithms. We presented the three algorithms and the results of testing them in detecting different six intents. This work established that intent detection can be performed on text posts with approximately 61% accuracy. Keywords—Intent detection; text mining; support vector machines; N-grams; parts of speech",
"title": ""
},
{
"docid": "99f57f28f8c262d4234d07deb9dcf49d",
"text": "Historically, conversational systems have focused on goal-directed interaction and this focus defined much of the work in the field of spoken dialog systems. More recently researchers have started to focus on nongoal-oriented dialog systems often referred to as ”chat” systems. We can refer to these as Chat-oriented Dialog (CHAD)systems. CHAD systems are not task-oriented and focus on what can be described as social conversation where the goal is to interact while maintaining an appropriate level of engagement with a human interlocutor. Work to date has identified a number of techniques that can be used to implement working CHADs but it has also highlighted important limitations. This note describes CHAD characteristics and proposes a research agenda.",
"title": ""
},
{
"docid": "e8eaeb8a2bb6fa71997aa97306bf1bb0",
"text": "Article history: Available online 18 February 2016",
"title": ""
},
{
"docid": "ddb77ec8a722c50c28059d03919fb299",
"text": "Among the smart cities applications, optimizing lottery games is one of the urgent needs to ensure their fairness and transparency. The emerging blockchain technology shows a glimpse of solutions to fairness and transparency issues faced by lottery industries. This paper presents the design of a blockchain-based lottery system for smart cities applications. We adopt the smart contracts of blockchain technology and the cryptograph blockchain model, Hawk [8], to design the blockchain-based lottery system, FairLotto, for future smart cities applications. Fairness, transparency, and privacy of the proposed blockchain-based lottery system are discussed and ensured.",
"title": ""
},
{
"docid": "83c184b9a9b533835c74bbe844f54a70",
"text": "This work addresses issues related to the design and implementation of focused crawlers. Several variants of state-of-the-art crawlers relying on web page content and link information for estimating the relevance of web pages to a given topic are proposed. Particular emphasis is given to crawlers capable of learning not only the content of relevant pages (as classic crawlers do) but also paths leading to relevant pages. A novel learning crawler inspired by a previously proposed Hidden Markov Model (HMM) crawler is described as well. The crawlers have been implemented using the same baseline implementation (only the priority assignment function differs in each crawler) providing an unbiased evaluation framework for a comparative analysis of their performance. All crawlers achieve their maximum performance when a combination of web page content and (link) anchor text is used for assigning download priorities to web pages. Furthermore, the new HMM crawler improved the performance of the original HMM crawler and also outperforms classic focused crawlers in searching for specialized topics.",
"title": ""
},
{
"docid": "ca509048385b8cf28bd7b89c685f21b2",
"text": "Recent studies on knowledge base completion, the task of recovering missing relationships based on recorded relations, demonstrate the importance of learning embeddings from multi-step relations. However, due to the size of knowledge bases, learning multi-step relations directly on top of observed instances could be costly. In this paper, we propose Implicit ReasoNets (IRNs), which is designed to perform large-scale inference implicitly through a search controller and shared memory. Unlike previous work, IRNs use training data to learn to perform multi-step inference through the shared memory, which is also jointly updated during training. While the inference procedure is not operating on top of observed instances for IRNs, our proposed model outperforms all previous approaches on the popular FB15k benchmark by more than 5.7%.",
"title": ""
},
{
"docid": "5010761051983f5de1f18a11d477f185",
"text": "Financial forecasting has been challenging problem due to its high non-linearity and high volatility. An Artificial Neural Network (ANN) can model flexible linear or non-linear relationship among variables. ANN can be configured to produce desired set of output based on set of given input. In this paper we attempt at analyzing the usefulness of artificial neural network for forecasting financial data series with use of different algorithms such as backpropagation, radial basis function etc. With their ability of adapting non-linear and chaotic patterns, ANN is the current technique being used which offers the ability of predicting financial data more accurately. \"A x-y-1 network topology is adopted because of x input variables in which variable y was determined by the number of hidden neurons during network selection with single output.\" Both x and y were changed.",
"title": ""
},
{
"docid": "afdb022bd163c1d5af226dc9624c1aee",
"text": "Sapienza University of Rome, Italy 1.",
"title": ""
},
{
"docid": "4a677dae1152d5d69369ac76590f52f3",
"text": "This paper presents a digital implementation of power control for induction cooking appliances with domestic low-cost vessels. The proposed control strategy is based on the asymmetrical duty-cycle with automatic switching-frequency tracking control employing a digital phase locked-loop (DPLL) control on high performance microcontroller. With the use of a phase locked-loop control, this method ensures the zero voltage switching (ZVS) operation under load parameter variation and power control at any power levels. Experimental results have shown that the proposed control method can reach the minimum output power at 15% of the rated value.",
"title": ""
},
{
"docid": "a64f1bb761ac8ee302a278df03eecaa8",
"text": "We analyze StirTrace towards benchmarking face morphing forgeries and extending it by additional scaling functions for the face biometrics scenario. We benchmark a Benford's law based multi-compression-anomaly detection approach and acceptance rates of morphs for a face matcher to determine the impact of the processing on the quality of the forgeries. We use 2 different approaches for automatically creating 3940 images of morphed faces. Based on this data set, 86614 images are created using StirTrace. A manual selection of 183 high quality morphs is used to derive tendencies based on the subjective forgery quality. Our results show that the anomaly detection seems to be able to detect anomalies in the morphing regions, the multi-compression-anomaly detection performance after the processing can be differentiated into good (e.g. cropping), partially critical (e.g. rotation) and critical results (e.g. additive noise). The influence of the processing on the biometric matcher is marginal.",
"title": ""
},
{
"docid": "a3f06bfcc2034483cac3ee200803878c",
"text": "This paper presents a technique for motion detection that incorporates several innovative mechanisms. For example, our proposed technique stores, for each pixel, a set of values taken in the past at the same location or in the neighborhood. It then compares this set to the current pixel value in order to determine whether that pixel belongs to the background, and adapts the model by choosing randomly which values to substitute from the background model. This approach differs from those based upon the classical belief that the oldest values should be replaced first. Finally, when the pixel is found to be part of the background, its value is propagated into the background model of a neighboring pixel. We describe our method in full details (including pseudo-code and the parameter values used) and compare it to other background subtraction techniques. Efficiency figures show that our method outperforms recent and proven state-of-the-art methods in terms of both computation speed and detection rate. We also analyze the performance of a downscaled version of our algorithm to the absolute minimum of one comparison and one byte of memory per pixel. It appears that even such a simplified version of our algorithm performs better than mainstream techniques.",
"title": ""
},
{
"docid": "04e9ecf5ad4d5282f2b0f5ded36ca00c",
"text": "There are several billion network-oriented devices in use today that are facilitated to inter-communicate; thereby forming a giant neural-like architecture known as the Internet-of-Things (IoT). The benefits of the IoT cut across all spectrums of our individual lives, corporate culture, and societal co-existence. This is because IoT devices support health tracking, security monitoring, consumer tracking, forecasting, and so on. However, the huge interconnectedness in IoT architectures complicates traceability and faulty data propagation is not easily detected since there are challenges with data origin authentication. Thus, this research proposes a provenance technique to deal with these issues. The technique is based on associative rules and lexical chaining methodologies, which enable traceability through the identification of propagation routes of data and object-to-object communications. Through visualization tools, the proposed methodologies also enabled us to determine linkability and unlinkability between IoT devices in a network which further leads to mechanisms to check correctness in sensor data propagation.",
"title": ""
},
{
"docid": "66acaa4909502a8d7213366e0667c3c2",
"text": "Facial rejuvenation, particularly lip augmentation, has gained widespread popularity. An appreciation of perioral anatomy as well as the structural characteristics that define the aging face is critical to achieve optimal patient outcomes. Although techniques and technology evolve continuously, hyaluronic acid (HA) dermal fillers continue to dominate aesthetic practice. A combination approach including neurotoxin and volume restoration demonstrates superior results in select settings.",
"title": ""
},
{
"docid": "bccbfd27cad96c0e859bb8951b898dd7",
"text": "Hassler Hallstedt, M. 2018. Closing the Gap. How an Adaptive Behavioral Based Program on a Tablet Can Help Low Performing Children Catch Up in Math: a Randomized Placebo Controlled Study. Digital Comprehensive Summaries of Uppsala Dissertations from the Faculty of Social Sciences 150. 88 pp. Uppsala: Acta Universitatis Upsaliensis. ISBN 978-91-513-0200-3. Early mathematic skills have a substantial impact on later school achievement. Children with poor school achievement are at risk for adverse consequences later in life. Math competencies also have consequences for the economy at large because societies are becoming increasingly dependent on skill sets including mathematics. Proficiency with basic arithmetic, also known as math fact (i.e., 3+8, 12-3), is considered to be a critical early math skill. Intervention research in mathematics have demonstrated that math fact deficits among students with low math performance can be improved with additional targeted, nontechnological interventions (i.e., small-group tutoring). The aim of the present thesis was to investigate the effect, using a randomized placebo controlled design, of addititional adaptive, behavioral based, math training on a tablet on low performing second graders. The first study (study I), investigated if arithmetic skills could be assessed in a reliable and valid way on tablet. The examination showed that arithmetic scales could be transferred from paper-based tests to tablet with comparable psychometric properties, although not for a pictorial scale, and that separate norms are needed for tablet. Study II demonstrated that training on a tablet, for on average 19 hours across 20 weeks, improved basic arithmetic skills after training in the math conditions compared to control/ placebo conditions. The effects were medium sized at post assessment. There was a fadeout of effects at 6 months follow-up, where small effects were shown, and the effects decreased further at 12 months follow-up. Children with lower non-verbal IQ seemed to gain significantly more at followups than children with higher non-verbal IQ. The study found no additional effects of combining working memory training and math training. Study III, using a machine learning analysis, found that children demonstrating a positive response at 6 months follow-up were characterized by having completed 90 % or more of the math program at the default level, in combination with having a fairly favorable socioeconomic background. In summation, this work demonstrates how an adaptive behavioral based program on a tablet can help low performing children improve critical early math skills.",
"title": ""
}
] |
scidocsrr
|
b76682699bd65eb1bb86bfedf78406c9
|
A food image recognition system with Multiple Kernel Learning
|
[
{
"docid": "432fe001ec8f1331a4bd033e9c49ccdf",
"text": "Recently, methods based on local image features have shown promise for texture and object recognition tasks. This paper presents a large-scale evaluation of an approach that represents images as distributions (signatures or histograms) of features extracted from a sparse set of keypoint locations and learns a Support Vector Machine classifier with kernels based on two effective measures for comparing distributions, the Earth Mover’s Distance and the χ2 distance. We first evaluate the performance of our approach with different keypoint detectors and descriptors, as well as different kernels and classifiers. We then conduct a comparative evaluation with several state-of-the-art recognition methods on four texture and five object databases. On most of these databases, our implementation exceeds the best reported results and achieves comparable performance on the rest. Finally, we investigate the influence of background correlations on recognition performance via extensive tests on the PASCAL database, for which ground-truth object localization information is available. Our experiments demonstrate that image representations based on distributions of local features are surprisingly effective for classification of texture and object images under challenging real-world conditions, including significant intra-class variations and substantial background clutter.",
"title": ""
},
{
"docid": "dce51c1fed063c9d9776fce998209d25",
"text": "While classical kernel-based learning algorithms are based on a single kernel, in practice it is often desirable to use multiple kernels. Lankriet et al. (2004) considered conic combinations of kernel matrices for classification, leading to a convex quadratically constrained quadratic program. We show that it can be rewritten as a semi-infinite linear program that can be efficiently solved by recycling the standard SVM implementations. Moreover, we generalize the formulation and our method to a larger class of problems, including regression and one-class classification. Experimental results show that the proposed algorithm works for hundred thousands of examples or hundreds of kernels to be combined, and helps for automatic model selection, improving the interpretability of the learning result. In a second part we discuss general speed up mechanism for SVMs, especially when used with sparse feature maps as appear for string kernels, allowing us to train a string kernel SVM on a 10 million real-world splice dataset from computational biology. We integrated Multiple Kernel Learning in our Machine Learning toolbox SHOGUN for which the source code is publicly available at http://www.fml.tuebingen.mpg.de/raetsch/projects/shogun.",
"title": ""
}
] |
[
{
"docid": "02156199912027e9230b3c000bcbe87b",
"text": "Voice conversion (VC) using sequence-to-sequence learning of context posterior probabilities is proposed. Conventional VC using shared context posterior probabilities predicts target speech parameters from the context posterior probabilities estimated from the source speech parameters. Although conventional VC can be built from non-parallel data, it is difficult to convert speaker individuality such as phonetic property and speaking rate contained in the posterior probabilities because the source posterior probabilities are directly used for predicting target speech parameters. In this work, we assume that the training data partly include parallel speech data and propose sequence-to-sequence learning between the source and target posterior probabilities. The conversion models perform non-linear and variable-length transformation from the source probability sequence to the target one. Further, we propose a joint training algorithm for the modules. In contrast to conventional VC, which separately trains the speech recognition that estimates posterior probabilities and the speech synthesis that predicts target speech parameters, our proposed method jointly trains these modules along with the proposed probability conversion modules. Experimental results demonstrate that our approach outperforms the conventional VC.",
"title": ""
},
{
"docid": "be009b972c794d01061c4ebdb38cc720",
"text": "The existing efforts in computer assisted semen analysis have been focused on high speed imaging and automated image analysis of sperm motility. This results in a large amount of data, and it is extremely challenging for both clinical scientists and researchers to interpret, compare and correlate the multidimensional and time-varying measurements captured from video data. In this work, we use glyphs to encode a collection of numerical measurements taken at a regular interval and to summarize spatio-temporal motion characteristics using static visual representations. The design of the glyphs addresses the needs for (a) encoding some 20 variables using separable visual channels, (b) supporting scientific observation of the interrelationships between different measurements and comparison between different sperm cells and their flagella, and (c) facilitating the learning of the encoding scheme by making use of appropriate visual abstractions and metaphors. As a case study, we focus this work on video visualization for computer-aided semen analysis, which has a broad impact on both biological sciences and medical healthcare. We demonstrate that glyph-based visualization can serve as a means of external memorization of video data as well as an overview of a large set of spatiotemporal measurements. It enables domain scientists to make scientific observation in a cost-effective manner by reducing the burden of viewing videos repeatedly, while providing them with a new visual representation for conveying semen statistics.",
"title": ""
},
{
"docid": "de3ba8a5e83dc1fa153b9341ff7cbc76",
"text": "The 1990s have seen a rapid growth of research interests in mobile ad hoc networking. The infrastructureless and the dynamic nature of these networks demands new set of networking strategies to be implemented in order to provide efficient end-to-end communication. This, along with the diverse application of these networks in many different scenarios such as battlefield and disaster recovery, have seen MANETs being researched by many different organisations and institutes. MANETs employ the traditional TCP/IP structure to provide end-to-end communication between nodes. However, due to their mobility and the limited resource in wireless networks, each layer in the TCP/IP model require redefinition or modifications to function efficiently in MANETs. One interesting research area in MANET is routing. Routing in the MANETs is a challenging task and has received a tremendous amount of attention from researches. This has led to development of many different routing protocols for MANETs, and each author of each proposed protocol argues that the strategy proposed provides an improvement over a number of different strategies considered in the literature for a given network scenario. Therefore, it is quite difficult to determine which protocols may perform best under a number of different network scenarios, such as increasing node density and traffic. In this paper, we provide an overview of a wide range of routing protocols proposed in the literature. We also provide a performance comparison of all routing protocols and suggest which protocols may perform best in large networks.",
"title": ""
},
{
"docid": "2d784404588a3b214684f38b060ac29c",
"text": "Complex query types huge data volumes and very high read update ratios make the indexing techniques designed and tuned for traditional database systems unsuitable for data warehouses DW We propose an encoded bitmap indexing for DWs which improves the performance of known bitmap indexing in the case of large cardinality domains A performance analysis and theorems which identify properties of good encodings for better performance are presented We compare en coded bitmap indexing with related techniques such as bit slicing projection dynamic and range based indexing",
"title": ""
},
{
"docid": "3419c35e0dff7b47328943235419a409",
"text": "Several methods of classification of partially edentulous arches have been proposed and are in use. The most familiar classifications are those originally proposed by Kennedy, Cummer, and Bailyn. None of these classification systems include implants, simply because most of them were proposed before implants became widely accepted. At this time, there is no classification system for partially edentulous arches incorporating implants placed or to be placed in the edentulous spaces for a removable partial denture (RPD). This article proposes a simple classification system for partially edentulous arches with implants based on the Kennedy classification system, with modification, to be used for RPDs. It incorporates the number and positions of implants placed or to be placed in the edentulous areas. A different name, Implant-Corrected Kennedy (ICK) Classification System, is given to the new classification system to be differentiated from other partially edentulous arch classification systems.",
"title": ""
},
{
"docid": "af842014eb9d2201f20f5ec5a5025fe5",
"text": "In the context of deep learning for robotics, we show effective method of training a real robot to grasp a tiny sphere (1.37cm of diameter), with an original combination of system design choices. We decompose the end-to-end system into a vision module and a closed-loop controller module. The two modules use target object segmentation as their common interface. The vision module extracts information from the robot end-effector camera, in the form of a binary segmentation mask of the target. We train it to achieve effective domain transfer by composing real background images with simulated images of the target. The controller module takes as input the binary segmentation mask, and thus is agnostic to visual discrepancies between simulated and real environments. We train our closed-loop controller in simulation using imitation learning and show it is robust with respect to discrepancies between the dynamic model of the simulated and real robot: when combined with eye-in-hand observations, we achieve a 90% success rate in grasping a tiny sphere with a real robot. The controller can generalize to unseen scenarios where the target is moving and even learns to recover from failures.",
"title": ""
},
{
"docid": "e464cde1434026c17b06716c6a416b7a",
"text": "Three experiments supported the hypothesis that people are more willing to express attitudes that could be viewed as prejudiced when their past behavior has established their credentials as nonprejudiced persons. In Study 1, participants given the opportunity to disagree with blatantly sexist statements were later more willing to favor a man for a stereotypically male job. In Study 2, participants who first had the opportunity to select a member of a stereotyped group (a woman or an African American) for a category-neutral job were more likely to reject a member of that group for a job stereotypically suited for majority members. In Study 3, participants who had established credentials as nonprejudiced persons revealed a greater willingness to express a politically incorrect opinion even when the audience was unaware of their credentials. The general conditions under which people feel licensed to act on illicit motives are discussed.",
"title": ""
},
{
"docid": "037fb8eb72b55b8dae1aee107eb6b15c",
"text": "Traditional methods on video summarization are designed to generate summaries for single-view video records, and thus they cannot fully exploit the mutual information in multi-view video records. In this paper, we present a multiview metric learning framework for multi-view video summarization. It combines the advantages of maximum margin clustering with the disagreement minimization criterion. The learning framework thus has the ability to find a metric that best separates the input data, and meanwhile to force the learned metric to maintain underlying intrinsic structure of data points, for example geometric information. Facilitated by such a framework, a systematic solution to the multi-view video summarization problem is developed from the viewpoint of metric learning. The effectiveness of the proposed method is demonstrated by experiments.",
"title": ""
},
{
"docid": "7e08a713a97f153cdd3a7728b7e0a37c",
"text": "The availability of long circulating, multifunctional polymers is critical to the development of drug delivery systems and bioconjugates. The ease of synthesis and functionalization make linear polymers attractive but their rapid clearance from circulation compared to their branched or cyclic counterparts, and their high solution viscosities restrict their applications in certain settings. Herein, we report the unusual compact nature of high molecular weight (HMW) linear polyglycerols (LPGs) (LPG - 100; M(n) - 104 kg mol(-1), M(w)/M(n) - 1.15) in aqueous solutions and its impact on its solution properties, blood compatibility, cell compatibility, in vivo circulation, biodistribution and renal clearance. The properties of LPG have been compared with hyperbranched polyglycerol (HPG) (HPG-100), linear polyethylene glycol (PEG) with similar MWs. The hydrodynamic size and the intrinsic viscosity of LPG-100 in water were considerably lower compared to PEG. The Mark-Houwink parameter of LPG was almost 10-fold lower than that of PEG. LPG and HPG demonstrated excellent blood and cell compatibilities. Unlike LPG and HPG, HMW PEG showed dose dependent activation of blood coagulation, platelets and complement system, severe red blood cell aggregation and hemolysis, and cell toxicity. The long blood circulation of LPG-100 (t(1/2β,) 31.8 ± 4 h) was demonstrated in mice; however, it was shorter compared to HPG-100 (t(1/2β,) 39.2 ± 8 h). The shorter circulation half life of LPG-100 was correlated with its higher renal clearance and deformability. Relatively lower organ accumulation was observed for LPG-100 and HPG-100 with some influence of on the architecture of the polymers. Since LPG showed better biocompatibility profiles, longer in vivo circulation time compared to PEG and other linear drug carrier polymers, and has multiple functionalities for conjugation, makes it a potential candidate for developing long circulating multifunctional drug delivery systems similar to HPG.",
"title": ""
},
{
"docid": "6cd9df79a38656597b124b139746462e",
"text": "Load balancing is a technique which allows efficient parallelization of irregular workloads, and a key component of many applications and parallelizing runtimes. Work-stealing is a popular technique for implementing load balancing, where each parallel thread maintains its own work set of items and occasionally steals items from the sets of other threads.\n The conventional semantics of work stealing guarantee that each inserted task is eventually extracted exactly once. However, correctness of a wide class of applications allows for relaxed semantics, because either: i) the application already explicitly checks that no work is repeated or ii) the application can tolerate repeated work.\n In this paper, we introduce idempotent work tealing, and present several new algorithms that exploit the relaxed semantics to deliver better performance. The semantics of the new algorithms guarantee that each inserted task is eventually extracted at least once-instead of exactly once.\n On mainstream processors, algorithms for conventional work stealing require special atomic instructions or store-load memory ordering fence instructions in the owner's critical path operations. In general, these instructions are substantially slower than regular memory access instructions. By exploiting the relaxed semantics, our algorithms avoid these instructions in the owner's operations.\n We evaluated our algorithms using common graph problems and micro-benchmarks and compared them to well-known conventional work stealing algorithms, the THE Cilk and Chase-Lev algorithms. We found that our best algorithm (with LIFO extraction) outperforms existing algorithms in nearly all cases, and often by significant margins.",
"title": ""
},
{
"docid": "65117f76b795ad5fabd271fad5ee4287",
"text": "We present a novel, fast, and compact method to improve semantic segmentation of three-dimensional (3-D) point clouds, which is able to learn and exploit common contextual relations between observed structures and objects. Introducing 3-D Entangled Forests (3-DEF), we extend the concept of entangled features for decision trees to 3-D point clouds, enabling the classifier not only to learn, which labels are likely to occur close to each other, but also in which specific geometric configuration. Operating on a plane-based representation of a point cloud, our method does not require a final smoothing step and achieves state-of-the-art results on the NYU Depth Dataset in a single inference step. This compactness in turn allows for fast processing times, a crucial factor to consider for online applications on robotic platforms. In a thorough evaluation, we demonstrate the expressiveness of our new 3-D entangled feature set and the importance of spatial context in the scope of semantic segmentation.",
"title": ""
},
{
"docid": "7681a78f2d240afc6b2e48affa0612c1",
"text": "Web usage mining applies data mining procedures to analyze user access of Web sites. As with any KDD (knowledge discovery and data mining) process, WUM contains three main steps: preprocessing, knowledge extraction, and results analysis. We focus on data preprocessing, a fastidious, complex process. Analysts aim to determine the exact list of users who accessed the Web site and to reconstitute user sessions-the sequence of actions each user performed on the Web site. Intersites WUM deals with Web server logs from several Web sites, generally belonging to the same organization. Thus, analysts must reassemble the users' path through all the different Web servers that they visited. Our solution is to join all the log files and reconstitute the visit. Classical data preprocessing involves three steps: data fusion, data cleaning, and data structuration. Our solution for WUM adds what we call advanced data preprocessing. This consists of a data summarization step, which will allow the analyst to select only the information of interest. We've successfully tested our solution in an experiment with log files from INRIA Web sites.",
"title": ""
},
{
"docid": "f693b26866ca8eb2a893dead7aa0fb21",
"text": "This paper deals with response signals processing in eddy current non-destructive testing. Non-sinusoidal excitation is utilized to drive eddy currents in a conductive specimen. The response signals due to a notch with variable depth are calculated by numerical means. The signals are processed in order to evaluate the depth of the notch. Wavelet transformation is used for this purpose. Obtained results are presented and discussed in this paper. Streszczenie. Praca dotyczy sygnałów wzbudzanych przy nieniszczącym testowaniu za pomocą prądów wirowych. Przy pomocy symulacji numerycznych wyznaczono sygnały odpowiedzi dla niesinusoidalnych sygnałów wzbudzających i defektów o różnej głębokości. Celem symulacji jest wyznaczenie zależności pozwalającej wyznaczyć głębokość defektu w zależności od odbieranego sygnału. W artykule omówiono wykorzystanie do tego celu transformaty falkowej. (Analiza falkowa impulsowych prądów wirowych)",
"title": ""
},
{
"docid": "d81c25a953bc14e3316e2ae7485c023a",
"text": "The amphibious robot is so attractive and challenging for its broad application and its complex working environment. It should walk on rough ground, maneuver underwater and pass through transitional terrain such as sand and mud, simultaneously. To tackle with such a complex task, a novel amphibious robot (AmphiHex-I) with transformable leg-flipper composite propulsion is proposed and developed. This paper presents the detailed structure design of the transformable leg-flipper propulsion mechanism and its drive module, which enables the amphibious robot passing through the terrain, water and transitional zone between them. A preliminary theoretical analysis is conducted to study the interaction between the elliptic leg and transitional environment such as granular medium. An orthogonal experiment is designed to study the leg locomotion in the sandy and muddy terrain with different water content. Finally, basic propulsion experiments of AmphiHex-I are launched, which verified the locomotion capability on land and underwater is achieved by the transformable leg-flipper mechanism.",
"title": ""
},
{
"docid": "1488c4ad77f042cbc67aa1681fca8d7e",
"text": "Mining chemical-induced disease relations embedded in the vast biomedical literature could facilitate a wide range of computational biomedical applications, such as pharmacovigilance. The BioCreative V organized a Chemical Disease Relation (CDR) Track regarding chemical-induced disease relation extraction from biomedical literature in 2015. We participated in all subtasks of this challenge. In this article, we present our participation system Chemical Disease Relation Extraction SysTem (CD-REST), an end-to-end system for extracting chemical-induced disease relations in biomedical literature. CD-REST consists of two main components: (1) a chemical and disease named entity recognition and normalization module, which employs the Conditional Random Fields algorithm for entity recognition and a Vector Space Model-based approach for normalization; and (2) a relation extraction module that classifies both sentence-level and document-level candidate drug-disease pairs by support vector machines. Our system achieved the best performance on the chemical-induced disease relation extraction subtask in the BioCreative V CDR Track, demonstrating the effectiveness of our proposed machine learning-based approaches for automatic extraction of chemical-induced disease relations in biomedical literature. The CD-REST system provides web services using HTTP POST request. The web services can be accessed fromhttp://clinicalnlptool.com/cdr The online CD-REST demonstration system is available athttp://clinicalnlptool.com/cdr/cdr.html. Database URL:http://clinicalnlptool.com/cdr;http://clinicalnlptool.com/cdr/cdr.html.",
"title": ""
},
{
"docid": "0ebcadb280792dfc14714cd13e550775",
"text": "Brushless DC (BLDC) motor drives are continually gaining popularity in motion control applications. Therefore, it is necessary to have a low cost, but effective BLDC motor speed/torque regulator. This paper introduces a novel concept for digital control of trapezoidal BLDC motors. The digital controller was implemented via two different methods, namely conduction-angle control and current-mode control. Motor operation is allowed only at two operating points or states. Alternating between the two operating points results in an average operating point that produces an average operating speed. The controller design equations are derived from Newton's second law. The novel controller is verified via computer simulations and an experimental demonstration is carried out with the rapid prototyping and real-time interface system dSPACE.",
"title": ""
},
{
"docid": "5cdc962d9ce66938ad15829f8d0331ed",
"text": "This study aims to provide a picture of how relationship quality can influence customer loyalty or loyalty in the business-to-business context. Building on prior research, we propose relationship quality as a higher construct comprising trust, commitment, satisfaction and service quality. These dimensions of relationship quality can reasonably explain the influence of relationship quality on customer loyalty. This study follows the composite loyalty approach providing both behavioural aspects (purchase intentions) and attitudinal loyalty in order to fully explain the concept of customer loyalty. A literature search is undertaken in the areas of customer loyalty, relationship quality, perceived service quality, trust, commitment and satisfaction. This study then seeks to address the following research issues: Does relationship quality influence both aspects of customer loyalty? Which relationship quality dimensions influence each of the components of customer loyalty? This study was conducted in a business-to-business setting of the courier and freight delivery service industry in Australia. The survey was targeted to Australian Small to Medium Enterprises (SMEs). Two methods were chosen for data collection: mail survey and online survey. The total number of usable respondents who completed both survey was 306. In this study, a two step approach (Anderson and Gerbing 1988) was selected for measurement model and structural model. The results also show that all measurement models of relationship dimensions achieved a satisfactory level of fit to the data. The hypothesized relationships were estimated using structural equation modeling. The overall goodness of fit statistics shows that the structural model fits the data well. As the results show, to maintain customer loyalty to the supplier, a supplier may enhance all four aspects of relationship quality which are trust, commitment, satisfaction and service quality. Specifically, in order to enhance customer’s trust, a supplier should promote the customer’s trust in the supplier. In efforts to emphasize commitment, a supplier should focus on building affective aspects of commitment rather than calculative aspects. Satisfaction appears to be a crucial factor in maintaining purchase intentions whereas service quality will strongly enhance both purchase intentions and attitudinal loyalty.",
"title": ""
},
{
"docid": "7170a9d4943db078998e1844ad67ae9e",
"text": "Privacy has become increasingly important to the database community which is reflected by a noteworthy increase in research papers appearing in the literature. While researchers often assume that their definition of “privacy” is universally held by all readers, this is rarely the case; so many papers addressing key challenges in this domain have actually produced results that do not consider the same problem, even when using similar vocabularies. This paper provides an explicit definition of data privacy suitable for ongoing work in data repositories such as a DBMS or for data mining. The work contributes by briefly providing the larger context for the way privacy is defined legally and legislatively but primarily provides a taxonomy capable of thinking of data privacy technologically. We then demonstrate the taxonomy’s utility by illustrating how this perspective makes it possible to understand the important contribution made by researchers to the issue of privacy. The conclusion of this paper is that privacy is indeed multifaceted so no single current research effort adequately addresses the true breadth of the issues necessary to fully understand the scope of this important issue.",
"title": ""
},
{
"docid": "dfa25bfc23d0a7be74d190af7377b740",
"text": "Dental erosion is a contemporary disease, mostly because of the change of the eating patterns that currently exist in society. It is a \"silent\" and multifactorial disease, and is highly influenced by habits and lifestyles. The prevalence of dental erosion has considerably increased, with this condition currently standing as a great challenge for the clinician, regarding the diagnosis, identification of the etiological factors, prevention, and execution of an adequate treatment. This article presents a dental erosion review and a case report of a restorative treatment of dental erosion lesions using a combination of bonded ceramic overlays to reestablish vertical dimension and composite resin to restore the worn palatal and incisal surfaces of the anterior upper teeth. Adequate function and esthetics can be achieved with this approach.",
"title": ""
},
{
"docid": "7835a3ecdb9a8563e29ee122e5987503",
"text": "Women diagnosed with complete spinal cord injury (SCI) at T10 or higher report sensations generated by vaginal-cervical mechanical self-stimulation (CSS). In this paper we review brain responses to sexual arousal and orgasm in such women, and further hypothesize that the afferent pathway for this unexpected perception is provided by the Vagus nerves, which bypass the spinal cord. Using functional magnetic resonance imaging (fMRI), we ascertained that the region of the medulla oblongata to which the Vagus nerves project (the Nucleus of the Solitary Tract or NTS) is activated by CSS. We also used an objective measure, CSS-induced analgesia response to experimentally induced finger pain, to ascertain the functionality of this pathway. During CSS, several women experienced orgasms. Brain regions activated during orgasm included the hypothalamic paraventricular nucleus, amygdala, accumbens-bed nucleus of the stria terminalis-preoptic area, hippocampus, basal ganglia (especially putamen), cerebellum, and anterior cingulate, insular, parietal and frontal cortices, and lower brainstem (central gray, mesencephalic reticular formation, and NTS). We conclude that the Vagus nerves provide a spinal cord-bypass pathway for vaginal-cervical sensibility and that activation of this pathway can produce analgesia and orgasm.",
"title": ""
}
] |
scidocsrr
|
8aad42609bf989c816c96442c69dd42f
|
Evaluating Reliability and Predictive Validity of the Persian Translation of Quantitative Checklist for Autism in Toddlers (Q-CHAT)
|
[
{
"docid": "ab8cc15fe47a9cf4aa904f7e1eea4bc9",
"text": "Autism, a severe disorder of development, is difficult to detect in very young children. However, children who receive early intervention have improved long-term prognoses. The Modified Checklist for Autism in Toddlers (M-CHAT), consisting of 23 yes/no items, was used to screen 1,293 children. Of the 58 children given a diagnostic/developmental evaluation, 39 were diagnosed with a disorder on the autism spectrum. Six items pertaining to social relatedness and communication were found to have the best discriminability between children diagnosed with and without autism/PDD. Cutoff scores were created for the best items and the total checklist. Results indicate that the M-CHAT is a promising instrument for the early detection of autism.",
"title": ""
},
{
"docid": "81ca5239dbd60a988e7457076aac05d7",
"text": "OBJECTIVE\nFrontline health professionals need a \"red flag\" tool to aid their decision making about whether to make a referral for a full diagnostic assessment for an autism spectrum condition (ASC) in children and adults. The aim was to identify 10 items on the Autism Spectrum Quotient (AQ) (Adult, Adolescent, and Child versions) and on the Quantitative Checklist for Autism in Toddlers (Q-CHAT) with good test accuracy.\n\n\nMETHOD\nA case sample of more than 1,000 individuals with ASC (449 adults, 162 adolescents, 432 children and 126 toddlers) and a control sample of 3,000 controls (838 adults, 475 adolescents, 940 children, and 754 toddlers) with no ASC diagnosis participated. Case participants were recruited from the Autism Research Centre's database of volunteers. The control samples were recruited through a variety of sources. Participants completed full-length versions of the measures. The 10 best items were selected on each instrument to produce short versions.\n\n\nRESULTS\nAt a cut-point of 6 on the AQ-10 adult, sensitivity was 0.88, specificity was 0.91, and positive predictive value (PPV) was 0.85. At a cut-point of 6 on the AQ-10 adolescent, sensitivity was 0.93, specificity was 0.95, and PPV was 0.86. At a cut-point of 6 on the AQ-10 child, sensitivity was 0.95, specificity was 0.97, and PPV was 0.94. At a cut-point of 3 on the Q-CHAT-10, sensitivity was 0.91, specificity was 0.89, and PPV was 0.58. Internal consistency was >0.85 on all measures.\n\n\nCONCLUSIONS\nThe short measures have potential to aid referral decision making for specialist assessment and should be further evaluated.",
"title": ""
}
] |
[
{
"docid": "9775396477ccfde5abdd766588655539",
"text": "The use of hand gestures offers an alternative to the commonly used human computer interfaces, providing a more intuitive way of navigating among menus and multimedia applications. This paper presents a system for hand gesture recognition devoted to control windows applications. Starting from the images captured by a time-of-flight camera (a camera that produces images with an intensity level inversely proportional to the depth of the objects observed) the system performs hand segmentation as well as a low-level extraction of potentially relevant features which are related to the morphological representation of the hand silhouette. Classification based on these features discriminates between a set of possible static hand postures which results, combined with the estimated motion pattern of the hand, in the recognition of dynamic hand gestures. The whole system works in real-time, allowing practical interaction between user and application.",
"title": ""
},
{
"docid": "888b24ac96c2258d47bec205ccd418b6",
"text": "We present a graph-based semi-supervised label propagation algorithm for acquiring opendomain labeled classes and their instances from a combination of unstructured and structured text sources. This acquisition method significantly improves coverage compared to a previous set of labeled classes and instances derived from free text, while achieving comparable precision.",
"title": ""
},
{
"docid": "798ee46a8ac10787eaa154861d0311c6",
"text": "In the last few years, we have seen the transformative impact of deep learning in many applications, particularly in speech recognition and computer vision. Inspired by Google's Inception-ResNet deep convolutional neural network (CNN) for image classification, we have developed\"Chemception\", a deep CNN for the prediction of chemical properties, using just the images of 2D drawings of molecules. We develop Chemception without providing any additional explicit chemistry knowledge, such as basic concepts like periodicity, or advanced features like molecular descriptors and fingerprints. We then show how Chemception can serve as a general-purpose neural network architecture for predicting toxicity, activity, and solvation properties when trained on a modest database of 600 to 40,000 compounds. When compared to multi-layer perceptron (MLP) deep neural networks trained with ECFP fingerprints, Chemception slightly outperforms in activity and solvation prediction and slightly underperforms in toxicity prediction. Having matched the performance of expert-developed QSAR/QSPR deep learning models, our work demonstrates the plausibility of using deep neural networks to assist in computational chemistry research, where the feature engineering process is performed primarily by a deep learning algorithm.",
"title": ""
},
{
"docid": "6f16ccc24022c4fc46f8b0b106b0f3c4",
"text": "We reviewed 25 patients ascertained through the finding of trigonocephaly/metopic synostosis as a prominent manifestation. In 16 patients, trigonocephaly/metopic synostosis was the only significant finding (64%); 2 patients had metopic/sagittal synostosis (8%) and in 7 patients the trigonocephaly was part of a syndrome (28%). Among the nonsyndromic cases, 12 were males and 6 were females and the sex ratio was 2 M:1 F. Only one patient with isolated trigonocephaly had an affected parent (5.6%). All nonsyndromic patients had normal psychomotor development. In 2 patients with isolated metopic/sagittal synostosis, FGFR2 and FGFR3 mutations were studied and none were detected. Among the syndromic cases, two had Jacobsen syndrome associated with deletion of chromosome 11q 23 (28.5%). Of the remaining five syndromic cases, different conditions were found including Say-Meyer syndrome, multiple congenital anomalies and bilateral retinoblastoma with no detectable deletion in chromosome 13q14.2 by G-banding chromosomal analysis and FISH, I-cell disease, a new acrocraniofacial dysostosis syndrome, and Opitz C trigonocephaly syndrome. The last two patients were studied for cryptic chromosomal rearrangements, with SKY and subtelomeric FISH probes. Also FGFR2 and FGFR3 mutations were studied in two syndromic cases, but none were found. This study demonstrates that the majority of cases with nonsyndromic trigonocephaly are sporadic and benign, apart from the associated cosmetic implications. Syndromic trigonocephaly cases are causally heterogeneous and associated with chromosomal as well as single gene disorders. An investigation to delineate the underlying cause of trigonocephaly is indicated because of its important implications on medical management for the patient and the reproductive plans for the family.",
"title": ""
},
{
"docid": "a500afda393ad60ddd1bb39778655172",
"text": "The success and the failure of a data warehouse (DW) project are mainly related to the design phase according to most researchers in this domain. When analyzing the decision-making system requirements, many recurring problems appear and requirements modeling difficulties are detected. Also, we encounter the problem associated with the requirements expression by non-IT professionals and non-experts makers on design models. The ambiguity of the term of decision-making requirements leads to a misinterpretation of the requirements resulting from data warehouse design failure and incorrect OLAP analysis. Therefore, many studies have focused on the inclusion of vague data in information systems in general, but few studies have examined this case in data warehouses. This article describes one of the shortcomings of current approaches to data warehouse design which is the study of in the requirements inaccuracy expression and how ontologies can help us to overcome it. We present a survey on this topic showing that few works that take into account the imprecision in the study of this crucial phase in the decision-making process for the presentation of challenges and problems that arise and requires more attention by researchers to improve DW design. According to our knowledge, no rigorous study of vagueness in this area were made. Keywords— Data warehouses Design, requirements analysis, imprecision, ontology",
"title": ""
},
{
"docid": "c66069fc52e1d6a9ab38f699b6a482c6",
"text": "An understanding of the age of the Acheulian and the transition to the Middle Stone Age in southern Africa has been hampered by a lack of reliable dates for key sequences in the region. A number of researchers have hypothesised that the Acheulian first occurred simultaneously in southern and eastern Africa at around 1.7-1.6 Ma. A chronological evaluation of the southern African sites suggests that there is currently little firm evidence for the Acheulian occurring before 1.4 Ma in southern Africa. Many researchers have also suggested the occurrence of a transitional industry, the Fauresmith, covering the transition from the Early to Middle Stone Age, but again, the Fauresmith has been poorly defined, documented, and dated. Despite the occurrence of large cutting tools in these Fauresmith assemblages, they appear to include all the technological components characteristic of the MSA. New data from stratified Fauresmith bearing sites in southern Africa suggest this transitional industry maybe as old as 511-435 ka and should represent the beginning of the MSA as a broad entity rather than the terminal phase of the Acheulian. The MSA in this form is a technology associated with archaic H. sapiens and early modern humans in Africa with a trend of greater complexity through time.",
"title": ""
},
{
"docid": "95612aa090b77fc660279c5f2886738d",
"text": "Healthy biological systems exhibit complex patterns of variability that can be described by mathematical chaos. Heart rate variability (HRV) consists of changes in the time intervals between consecutive heartbeats called interbeat intervals (IBIs). A healthy heart is not a metronome. The oscillations of a healthy heart are complex and constantly changing, which allow the cardiovascular system to rapidly adjust to sudden physical and psychological challenges to homeostasis. This article briefly reviews current perspectives on the mechanisms that generate 24 h, short-term (~5 min), and ultra-short-term (<5 min) HRV, the importance of HRV, and its implications for health and performance. The authors provide an overview of widely-used HRV time-domain, frequency-domain, and non-linear metrics. Time-domain indices quantify the amount of HRV observed during monitoring periods that may range from ~2 min to 24 h. Frequency-domain values calculate the absolute or relative amount of signal energy within component bands. Non-linear measurements quantify the unpredictability and complexity of a series of IBIs. The authors survey published normative values for clinical, healthy, and optimal performance populations. They stress the importance of measurement context, including recording period length, subject age, and sex, on baseline HRV values. They caution that 24 h, short-term, and ultra-short-term normative values are not interchangeable. They encourage professionals to supplement published norms with findings from their own specialized populations. Finally, the authors provide an overview of HRV assessment strategies for clinical and optimal performance interventions.",
"title": ""
},
{
"docid": "e756574e701c9ecc4e28da6135499215",
"text": "MicroRNAs are small noncoding RNA molecules that regulate gene expression posttranscriptionally through complementary base pairing with thousands of messenger RNAs. They regulate diverse physiological, developmental, and pathophysiological processes. Recent studies have uncovered the contribution of microRNAs to the pathogenesis of many human diseases, including liver diseases. Moreover, microRNAs have been identified as biomarkers that can often be detected in the systemic circulation. We review the role of microRNAs in liver physiology and pathophysiology, focusing on viral hepatitis, liver fibrosis, and cancer. We also discuss microRNAs as diagnostic and prognostic markers and microRNA-based therapeutic approaches for liver disease.",
"title": ""
},
{
"docid": "e9f9d022007833ab7ae928619641e1b1",
"text": "BACKGROUND\nDissemination and implementation of health care interventions are currently hampered by the variable quality of reporting of implementation research. Reporting of other study types has been improved by the introduction of reporting standards (e.g. CONSORT). We are therefore developing guidelines for reporting implementation studies (StaRI).\n\n\nMETHODS\nUsing established methodology for developing health research reporting guidelines, we systematically reviewed the literature to generate items for a checklist of reporting standards. We then recruited an international, multidisciplinary panel for an e-Delphi consensus-building exercise which comprised an initial open round to revise/suggest a list of potential items for scoring in the subsequent two scoring rounds (scale 1 to 9). Consensus was defined a priori as 80% agreement with the priority scores of 7, 8, or 9.\n\n\nRESULTS\nWe identified eight papers from the literature review from which we derived 36 potential items. We recruited 23 experts to the e-Delphi panel. Open round comments resulted in revisions, and 47 items went forward to the scoring rounds. Thirty-five items achieved consensus: 19 achieved 100% agreement. Prioritised items addressed the need to: provide an evidence-based justification for implementation; describe the setting, professional/service requirements, eligible population and intervention in detail; measure process and clinical outcomes at population level (using routine data); report impact on health care resources; describe local adaptations to the implementation strategy and describe barriers/facilitators. Over-arching themes from the free-text comments included balancing the need for detailed descriptions of interventions with publishing constraints, addressing the dual aims of reporting on the process of implementation and effectiveness of the intervention and monitoring fidelity to an intervention whilst encouraging adaptation to suit diverse local contexts.\n\n\nCONCLUSIONS\nWe have identified priority items for reporting implementation studies and key issues for further discussion. An international, multidisciplinary workshop, where participants will debate the issues raised, clarify specific items and develop StaRI standards that fit within the suite of EQUATOR reporting guidelines, is planned.\n\n\nREGISTRATION\nThe protocol is registered with Equator: http://www.equator-network.org/library/reporting-guidelines-under-development/#17 .",
"title": ""
},
{
"docid": "82250ed88b90a942ddf551b0e9c78dd5",
"text": "This paper is focused on proposal of image steganographic method that is able to embedding of encoded secret message using Quick Response Code (QR) code into image data. Discrete Wavelet Transformation (DWT) domain is used for the embedding of QR code, while embedding process is additionally protected by Advanced Encryption Standard (AES) cipher algorithm. In addition, typical characteristics of QR code was broken using the encryption, therefore it makes the method more secure. The aim of this paper is design of image steganographic method with high secure level and high non-perceptibility level. The relation between security and capacity of the method was improved by special compression of QR code before the embedding process. Efficiency of the proposed method was measured by Peak Signal-to-Noise Ratio (PSNR) and achieved results were compared with other steganographic tools.",
"title": ""
},
{
"docid": "dc3417d01a998ee476aeafc0e9d11c74",
"text": "We present an overview of techniques for quantizing convolutional neural networks for inference with integer weights and activations. 1. Per-channel quantization of weights and per-layer quantization of activations to 8-bits of precision post-training produces classification accuracies within 2% of floating point networks for a wide variety of CNN architectures (section 3.1). 2. Model sizes can be reduced by a factor of 4 by quantizing weights to 8bits, even when 8-bit arithmetic is not supported. This can be achieved with simple, post training quantization of weights (section 3.1). 3. We benchmark latencies of quantized networks on CPUs and DSPs and observe a speedup of 2x-3x for quantized implementations compared to floating point on CPUs. Speedups of up to 10x are observed on specialized processors with fixed point SIMD capabilities, like the Qualcomm QDSPs with HVX (section 6). 4. Quantization-aware training can provide further improvements, reducing the gap to floating point to 1% at 8-bit precision. Quantization-aware training also allows for reducing the precision of weights to four bits with accuracy losses ranging from 2% to 10%, with higher accuracy drop for smaller networks (section 3.2). 5. We introduce tools in TensorFlow and TensorFlowLite for quantizing convolutional networks (Section 3). 6. We review best practices for quantization-aware training to obtain high accuracy with quantized weights and activations (section 4). 7. We recommend that per-channel quantization of weights and per-layer quantization of activations be the preferred quantization scheme for hardware acceleration and kernel optimization. We also propose that future processors and hardware accelerators for optimized inference support precisions of 4, 8 and 16 bits (section 7).",
"title": ""
},
{
"docid": "c808655e7272293ef8ae8af563700c2e",
"text": "3D scene flow estimation aims to jointly recover dense geometry and 3D motion from stereoscopic image sequences, thus generalizes classical disparity and 2D optical flow estimation. To realize its conceptual benefits and overcome limitations of many existing methods, we propose to represent the dynamic scene as a collection of rigidly moving planes, into which the input images are segmented. Geometry and 3D motion are then jointly recovered alongside an over-segmentation of the scene. This piecewise rigid scene model is significantly more parsimonious than conventional pixel-based representations, yet retains the ability to represent real-world scenes with independent object motion. It, furthermore, enables us to define suitable scene priors, perform occlusion reasoning, and leverage discrete optimization schemes toward stable and accurate results. Assuming the rigid motion to persist approximately over time additionally enables us to incorporate multiple frames into the inference. To that end, each view holds its own representation, which is encouraged to be consistent across all other viewpoints and frames in a temporal window. We show that such a view-consistent multi-frame scheme significantly improves accuracy, especially in the presence of occlusions, and increases robustness against adverse imaging conditions. Our method currently achieves leading performance on the KITTI benchmark, for both flow and stereo.",
"title": ""
},
{
"docid": "55a0fb2814fde7890724a137fc414c88",
"text": "Quantitative structure-activity relationship modeling is one of the major computational tools employed in medicinal chemistry. However, throughout its entire history it has drawn both praise and criticism concerning its reliability, limitations, successes, and failures. In this paper, we discuss (i) the development and evolution of QSAR; (ii) the current trends, unsolved problems, and pressing challenges; and (iii) several novel and emerging applications of QSAR modeling. Throughout this discussion, we provide guidelines for QSAR development, validation, and application, which are summarized in best practices for building rigorously validated and externally predictive QSAR models. We hope that this Perspective will help communications between computational and experimental chemists toward collaborative development and use of QSAR models. We also believe that the guidelines presented here will help journal editors and reviewers apply more stringent scientific standards to manuscripts reporting new QSAR studies, as well as encourage the use of high quality, validated QSARs for regulatory decision making.",
"title": ""
},
{
"docid": "f5e44676e9ce8a06bcdb383852fb117f",
"text": "We explore techniques to significantly improve the compute efficiency and performance of Deep Convolution Networks without impacting their accuracy. To improve the compute efficiency, we focus on achieving high accuracy with extremely low-precision (2-bit) weight networks, and to accelerate the execution time, we aggressively skip operations on zero-values. We achieve the highest reported accuracy of 76.6% Top-1/93% Top-5 on the Imagenet object classification challenge with low-precision network while reducing the compute requirement by ∼3× compared to a full-precision network that achieves similar accuracy. Furthermore, to fully exploit the benefits of our low-precision networks, we build a deep learning accelerator core, DLAC, that can achieve up to 1 TFLOP/mm2 equivalent for single-precision floating-point operations (∼2 TFLOP/mm2 for half-precision), which is ∼5× better than Linear Algebra Core [16] and ∼4× better than previous deep learning accelerator proposal [8].",
"title": ""
},
{
"docid": "2ead9e973f2a237b604bf68284e0acf1",
"text": "Cognitive radio networks challenge the traditional wireless networking paradigm by introducing concepts firmly stemmed into the Artificial Intelligence (AI) field, i.e., learning and reasoning. This fosters optimal resource usage and management allowing a plethora of potential applications such as secondary spectrum access, cognitive wireless backbones, cognitive machine-to-machine etc. The majority of overview works in the field of cognitive radio networks deal with the notions of observation and adaptations, which are not a distinguished cognitive radio networking aspect. Therefore, this paper provides insight into the mechanisms for obtaining and inferring knowledge that clearly set apart the cognitive radio networks from other wireless solutions.",
"title": ""
},
{
"docid": "6a3dc4c6bcf2a4133532c37dfa685f3b",
"text": "Feature selection can be de ned as a problem of nding a minimum set of M relevant at tributes that describes the dataset as well as the original N attributes do where M N After examining the problems with both the exhaustive and the heuristic approach to fea ture selection this paper proposes a proba bilistic approach The theoretic analysis and the experimental study show that the pro posed approach is simple to implement and guaranteed to nd the optimal if resources permit It is also fast in obtaining results and e ective in selecting features that im prove the performance of a learning algo rithm An on site application involving huge datasets has been conducted independently It proves the e ectiveness and scalability of the proposed algorithm Discussed also are various aspects and applications of this fea ture selection algorithm",
"title": ""
},
{
"docid": "141e3ad8619577140f02a1038981ecb2",
"text": "Sponges are sessile benthic filter-feeding animals, which harbor numerous microorganisms. The enormous diversity and abundance of sponge associated bacteria envisages sponges as hot spots of microbial diversity and dynamics. Many theories were proposed on the ecological implications and mechanism of sponge-microbial association, among these, the biosynthesis of sponge derived bioactive molecules by the symbiotic bacteria is now well-indicated. This phenomenon however, is not exhibited by all marine sponges. Based on the available reports, it has been well established that the sponge associated microbial assemblages keep on changing continuously in response to environmental pressure and/or acquisition of microbes from surrounding seawater or associated macroorganisms. In this review, we have discussed nutritional association of sponges with its symbionts, interaction of sponges with other eukaryotic organisms, dynamics of sponge microbiome and sponge-specific microbial symbionts, sponge-coral association etc.",
"title": ""
},
{
"docid": "9f3f5e2baa1bff4aa28a2ce2a4c47088",
"text": "One of the most perplexing problems in risk analysis is why some relatively minor risks or risk events, as assessed by technical experts, often elicit strong public concerns and result in substantial impacts upon society and economy. This article sets forth a conceptual framework that seeks to link systematically the technical assessment of risk with psychological, sociological, and cultural perspectives of risk perception and risk-related behavior. The main thesis is that hazards interact with psychological, social, institutional, and cultural processes in ways that may amplify or attenuate public responses to the risk or risk event. A structural description of the social amplification of risk is now possible. Amplification occurs at two stages: in the transfer of information about the risk, and in the response mechanisms of society. Signals about risk are processed by individual and social amplification stations, including the scientist who communicates the risk assessment, the news media, cultural groups, interpersonal networks, and others. Key steps of amplifications can be identified at each stage. The amplified risk leads to behavioral responses, which, in turn, result in secondary impacts. Models are presented that portray the elements and linkages in the proposed conceptual framework.",
"title": ""
},
{
"docid": "165429eb7bf6661af60081aa9cdeb370",
"text": "Central to the looming paradigm shift toward data-intensive science, machine-learning techniques are becoming increasingly important. In particular, deep learning has proven to be both a major breakthrough and an extremely powerful tool in many fields. Shall we embrace deep learning as the key to everything? Or should we resist a black-box solution? These are controversial issues within the remote-sensing community. In this article, we analyze the challenges of using deep learning for remote-sensing data analysis, review recent advances, and provide resources we hope will make deep learning in remote sensing seem ridiculously simple. More importantly, we encourage remote-sensing scientists to bring their expertise into deep learning and use it as an implicit general model to tackle unprecedented, large-scale, influential challenges, such as climate change and urbanization.",
"title": ""
},
{
"docid": "a3cb3e28db4e44642ecdac8eb4ae9a8a",
"text": "A Ka-band highly linear power amplifier (PA) is implemented in 28-nm bulk CMOS technology. Using a deep class-AB PA topology with appropriate harmonic control circuit, highly linear and efficient PAs are designed at millimeter-wave band. This PA architecture provides a linear PA operation close to the saturated power. Also elaborated harmonic tuning and neutralization techniques are used to further improve the transistor gain and stability. A two-stack PA is designed for higher gain and output power than a common source (CS) PA. Additionally, average power tracking (APT) is applied to further reduce the power consumption at a low power operation and, hence, extend battery life. Both the PAs are tested with two different signals at 28.5 GHz; they are fully loaded long-term evolution (LTE) signal with 16-quadrature amplitude modulation (QAM), a 7.5-dB peakto-average power ratio (PAPR), and a 20-MHz bandwidth (BW), and a wireless LAN (WLAN) signal with 64-QAM, a 10.8-dB PAPR, and an 80-MHz BW. The CS/two-stack PAs achieve power-added efficiency (PAE) of 27%/25%, error vector magnitude (EVM) of 5.17%/3.19%, and adjacent channel leakage ratio (ACLRE-UTRA) of -33/-33 dBc, respectively, with an average output power of 11/14.6 dBm for the LTE signal. For the WLAN signal, the CS/2-stack PAs achieve the PAE of 16.5%/17.3%, and an EVM of 4.27%/4.21%, respectively, at an average output power of 6.8/11 dBm.",
"title": ""
}
] |
scidocsrr
|
3bad9c8d77eeb7d45ecc853380175289
|
Accurate, Fast Fall Detection Using Gyroscopes and Accelerometer-Derived Posture Information
|
[
{
"docid": "2841935e11a246a68d71cca27728f387",
"text": "Unintentional falls are a common cause of severe injury in the elderly population. By introducing small, non-invasive sensor motes in conjunction with a wireless network, the Ivy Project aims to provide a path towards more independent living for the elderly. Using a small device worn on the waist and a network of fixed motes in the home environment, we can detect the occurrence of a fall and the location of the victim. Low-cost and low-power MEMS accelerometers are used to detect the fall while RF signal strength is used to locate the person",
"title": ""
}
] |
[
{
"docid": "afae94714340326278c1629aa4ecc48c",
"text": "The purpose of this investigation was to examine the influence of upper-body static stretching and dynamic stretching on upper-body muscular performance. Eleven healthy men, who were National Collegiate Athletic Association Division I track and field athletes (age, 19.6 +/- 1.7 years; body mass, 93.7 +/- 13.8 kg; height, 183.6 +/- 4.6 cm; bench press 1 repetition maximum [1RM], 106.2 +/- 23.0 kg), participated in this study. Over 4 sessions, subjects participated in 4 different stretching protocols (i.e., no stretching, static stretching, dynamic stretching, and combined static and dynamic stretching) in a balanced randomized order followed by 4 tests: 30% of 1 RM bench throw, isometric bench press, overhead medicine ball throw, and lateral medicine ball throw. Depending on the exercise, test peak power (Pmax), peak force (Fmax), peak acceleration (Amax), peak velocity (Vmax), and peak displacement (Dmax) were measured. There were no differences among stretch trials for Pmax, Fmax, Amax, Vmax, or Dmax for the bench throw or for Fmax for the isometric bench press. For the overhead medicine ball throw, there were no differences among stretch trials for Vmax or Dmax. For the lateral medicine ball throw, there was no difference in Vmax among stretch trials; however, Dmax was significantly larger (p </= 0.05) for the static and dynamic condition compared to the static-only condition. In general, there was no short-term effect of stretching on upper-body muscular performance in young adult male athletes, regardless of stretch mode, potentially due to the amount of rest used after stretching before the performances. Since throwing performance was largely unaffected by static or dynamic upper-body stretching, athletes competing in the field events could perform upper-body stretching, if enough time were allowed before the performance. However, prior studies on lower-body musculature have demonstrated dramatic negative effects on speed and power. Therefore, it is recommended that a dynamic warm-up be used for the entire warm-up.",
"title": ""
},
{
"docid": "551d642efa547b9d8c089b8ecb9530fb",
"text": "Using piezoelectric materials to harvest energy from ambient vibrations to power wireless sensors has been of great interest over the past few years. Due to the power output of the piezoelectric materials is relatively low, rechargeable battery is considered as one kind of energy storage to accumulate the harvested energy for intermittent use. Piezoelectric harvesting circuits for rechargeable batteries have two schemes: non-adaptive and adaptive ones. A non-adaptive harvesting scheme includes a conventional diode bridge rectifier and a passive circuit. In recent years, several researchers have developed adaptive schemes for the harvesting circuit. Among them, the adaptive harvesting scheme by Ottman et al. is the most promising. This paper is aimed to quantify the performances of adaptive and non-adaptive schemes and to discuss their performance characteristics.",
"title": ""
},
{
"docid": "3776b7fdcd1460b60a18c87cd60b639e",
"text": "A sketch is a probabilistic data structure that is used to record frequencies of items in a multi-set. Various types of sketches have been proposed in literature and applied in a variety of fields, such as data stream processing, natural language processing, distributed data sets etc. While several variants of sketches have been proposed in the past, existing sketches still have a significant room for improvement in terms of accuracy. In this paper, we propose a new sketch, called Slim-Fat (SF) sketch, which has a significantly higher accuracy compared to prior art, a much smaller memory footprint, and at the same time achieves the same speed as the best prior sketch. The key idea behind our proposed SF-sketch is to maintain two separate sketches: a small sketch called Slim-subsketch and a large sketch called Fat-subsketch. The Slim-subsketch, stored in the fast memory (SRAM), enables fast and accurate querying. The Fat-subsketch, stored in the relatively slow memory (DRAM), is used to assist the insertion and deletion from Slim-subsketch. We implemented and extensively evaluated SF-sketch along with several prior sketches and compared them side by side. Our experimental results show that SF-sketch outperforms the most commonly used CM-sketch by up to 33.1 times in terms of accuracy.",
"title": ""
},
{
"docid": "5eab71f546a7dc8bae157a0ca4dd7444",
"text": "We introduce a new usability inspection method called HED (heuristic evaluation during demonstrations) for measuring and comparing usability of competing complex IT systems in public procurement. The method presented enhances traditional heuristic evaluation to include the use context, comprehensive view of the system, and reveals missing functionality by using user scenarios and demonstrations. HED also quantifies the results in a comparable way. We present findings from a real-life validation of the method in a large-scale procurement project of a healthcare and social welfare information system. We analyze and compare the performance of HED to other usability evaluation methods used in procurement. Based on the analysis HED can be used to evaluate the level of usability of an IT system during procurement correctly, comprehensively and efficiently.",
"title": ""
},
{
"docid": "e2a7ff093714cc6a0543816b3d7c08e9",
"text": "Microblogs such as Twitter reflect the general public’s reactions to major events. Bursty topics from microblogs reveal what events have attracted the most online attention. Although bursty event detection from text streams has been studied before, previous work may not be suitable for microblogs because compared with other text streams such as news articles and scientific publications, microblog posts are particularly diverse and noisy. To find topics that have bursty patterns on microblogs, we propose a topic model that simultaneously captures two observations: (1) posts published around the same time are more likely to have the same topic, and (2) posts published by the same user are more likely to have the same topic. The former helps find eventdriven posts while the latter helps identify and filter out “personal” posts. Our experiments on a large Twitter dataset show that there are more meaningful and unique bursty topics in the top-ranked results returned by our model than an LDA baseline and two degenerate variations of our model. We also show some case studies that demonstrate the importance of considering both the temporal information and users’ personal interests for bursty topic detection from microblogs.",
"title": ""
},
{
"docid": "910a3be33d479be4ed6e7e44a56bb8fb",
"text": "Support vector machine (SVM) is a supervised machine learning approach that was recognized as a statistical learning apotheosis for the small-sample database. SVM has shown its excellent learning and generalization ability and has been extensively employed in many areas. This paper presents a performance analysis of six types of SVMs for the diagnosis of the classical Wisconsin breast cancer problem from a statistical point of view. The classification performance of standard SVM (St-SVM) is analyzed and compared with those of the other modified classifiers such as proximal support vector machine (PSVM) classifiers, Lagrangian support vector machines (LSVM), finite Newton method for Lagrangian support vector machine (NSVM), Linear programming support vector machines (LPSVM), and smooth support vector machine (SSVM). The experimental results reveal that these SVM classifiers achieve very fast, simple, and efficient breast cancer diagnosis. The training results indicated that LSVM has the lowest accuracy of 95.6107 %, while St-SVM performed better than other methods for all performance indices (accuracy = 97.71 %) and is closely followed by LPSVM (accuracy = 97.3282). However, in the validation phase, the overall accuracies of LPSVM achieved 97.1429 %, which was superior to LSVM (95.4286 %), SSVM (96.5714 %), PSVM (96 %), NSVM (96.5714 %), and St-SVM (94.86 %). Value of ROC and MCC for LPSVM achieved 0.9938 and 0.9369, respectively, which outperformed other classifiers. The results strongly suggest that LPSVM can aid in the diagnosis of breast cancer.",
"title": ""
},
{
"docid": "95612aa090b77fc660279c5f2886738d",
"text": "Healthy biological systems exhibit complex patterns of variability that can be described by mathematical chaos. Heart rate variability (HRV) consists of changes in the time intervals between consecutive heartbeats called interbeat intervals (IBIs). A healthy heart is not a metronome. The oscillations of a healthy heart are complex and constantly changing, which allow the cardiovascular system to rapidly adjust to sudden physical and psychological challenges to homeostasis. This article briefly reviews current perspectives on the mechanisms that generate 24 h, short-term (~5 min), and ultra-short-term (<5 min) HRV, the importance of HRV, and its implications for health and performance. The authors provide an overview of widely-used HRV time-domain, frequency-domain, and non-linear metrics. Time-domain indices quantify the amount of HRV observed during monitoring periods that may range from ~2 min to 24 h. Frequency-domain values calculate the absolute or relative amount of signal energy within component bands. Non-linear measurements quantify the unpredictability and complexity of a series of IBIs. The authors survey published normative values for clinical, healthy, and optimal performance populations. They stress the importance of measurement context, including recording period length, subject age, and sex, on baseline HRV values. They caution that 24 h, short-term, and ultra-short-term normative values are not interchangeable. They encourage professionals to supplement published norms with findings from their own specialized populations. Finally, the authors provide an overview of HRV assessment strategies for clinical and optimal performance interventions.",
"title": ""
},
{
"docid": "5519eea017d8f69804060f5e40748b1a",
"text": "The nonlinear Fourier transform is a transmission and signal processing technique that makes positive use of the Kerr nonlinearity in optical fibre channels. I will overview recent advances and some of challenges in this field.",
"title": ""
},
{
"docid": "db02adcb4f8ace13ab1f6f4a79bf7232",
"text": "This paper presents a spectral and time-frequency analysis of EEG signals recorded on seven healthy subjects walking on a treadmill at three different speeds. An accelerometer was placed on the head of the subjects in order to record the shocks undergone by the EEG electrodes during walking. Our results indicate that up to 15 harmonics of the fundamental stepping frequency may pollute EEG signals, depending on the walking speed and also on the electrode location. This finding may call into question some conclusions drawn in previous EEG studies where low-delta band (especially around 1 Hz, the fundamental stepping frequency) had been announced as being the seat of angular and linear kinematics control of the lower limbs during walk. Additionally, our analysis reveals that EEG and accelerometer signals exhibit similar time-frequency properties, especially in frequency bands extending up to 150 Hz, suggesting that previous conclusions claiming the activation of high-gamma rhythms during walking may have been drawn on the basis of insufficiently cleaned EEG signals. Our results are put in perspective with recent EEG studies related to locomotion and extensively discussed in particular by focusing on the low-delta and high-gamma bands.",
"title": ""
},
{
"docid": "41c3505d1341247972d99319cba3e7ba",
"text": "A 32-year-old pregnant woman in the 25th week of pregnancy underwent oral glucose tolerance screening at the diabetologist's. Later that day, she was found dead in her apartment possibly poisoned with Chlumsky disinfectant solution (solutio phenoli camphorata). An autopsy revealed chemical burns in the digestive system. The lungs and the brain showed signs of severe edema. The blood of the woman and fetus was analyzed using gas chromatography with mass spectrometry and revealed phenol, its metabolites (phenyl glucuronide and phenyl sulfate) and camphor. No ethanol was found in the blood samples. Both phenol and camphor are contained in Chlumsky disinfectant solution, which is used for disinfecting surgical equipment in healthcare facilities. Further investigation revealed that the deceased woman had been accidentally administered a disinfectant instead of a glucose solution by the nurse, which resulted in acute intoxication followed by the death of the pregnant woman and the fetus.",
"title": ""
},
{
"docid": "f231bff77a403fe18a445d894e9b93e5",
"text": "The geographical location of Internet IP addresses is important for academic research, commercial and homeland security applications. Thus, both commercial and academic databases and tools are available for mapping IP addresses to geographic locations. Evaluating the accuracy of these mapping services is complex since obtaining diverse large scale ground truth is very hard. In this work we evaluate mapping services using an algorithm that groups IP addresses to PoPs, based on structure and delay. This way we are able to group close to 100,000 IP addresses world wide into groups that are known to share a geo-location with high confidence. We provide insight into the strength and weaknesses of IP geolocation databases, and discuss their accuracy and encountered anomalies.",
"title": ""
},
{
"docid": "df0756ecff9f2ba84d6db342ee6574d3",
"text": "Security is becoming a critical part of organizational information systems. Intrusion detection system (IDS) is an important detection that is used as a countermeasure to preserve data integrity and system availability from attacks. Data mining is being used to clean, classify, and examine large amount of network data to correlate common infringement for intrusion detection. The main reason for using data mining techniques for intrusion detection systems is due to the enormous volume of existing and newly appearing network data that require processing. The amount of data accumulated each day by a network is huge. Several data mining techniques such as clustering, classification, and association rules are proving to be useful for gathering different knowledge for intrusion detection. This paper presents the idea of applying data mining techniques to intrusion detection systems to maximize the effectiveness in identifying attacks, thereby helping the users to construct more secure information systems.",
"title": ""
},
{
"docid": "89aa13fe76bf48c982e44b03acb0dd3d",
"text": "Stock trading strategy plays a crucial role in investment companies. However, it is challenging to obtain optimal strategy in the complex and dynamic stock market. We explore the potential of deep reinforcement learning to optimize stock trading strategy and thus maximize investment return. 30 stocks are selected as our trading stocks and their daily prices are used as the training and trading market environment. We train a deep reinforcement learning agent and obtain an adaptive trading strategy. The agent’s performance is evaluated and compared with Dow Jones Industrial Average and the traditional min-variance portfolio allocation strategy. The proposed deep reinforcement learning approach is shown to outperform the two baselines in terms of both the Sharpe ratio and cumulative returns.",
"title": ""
},
{
"docid": "fe1c70068301a379f6658775c6eb7ba0",
"text": "Fashion is a perpetual topic in human social life, and the mass has the penchant to emulate what large city residents and celebrities wear. Undeniably, New York City is such a bellwether large city with all kinds of fashion leadership. Consequently, to study what the fashion trends are during this year, it is very helpful to learn the fashion trends of New York City. Discovering fashion trends in New York City could boost many applications such as clothing recommendation and advertising. Does the fashion trend in the New York Fashion Show actually influence the clothing styles on the public? To answer this question, we design a novel system that consists of three major components: (1) constructing a large dataset from the New York Fashion Shows and New York street chic in order to understand the likely clothing fashion trends in New York, (2) utilizing a learning-based approach to discover fashion attributes as the representative characteristics of fashion trends, and (3) comparing the analysis results from the New York Fashion Shows and street-chic images to verify whether the fashion shows have actual influence on the people in New York City. Through the preliminary experiments over a large clothing dataset, we demonstrate the effectiveness of our proposed system, and obtain useful insights on fashion trends and fashion influence.",
"title": ""
},
{
"docid": "3d0103c34fcc6a65ad56c85a9fe10bad",
"text": "This paper approaches the problem of finding correspondences between images in which there are large changes in viewpoint, scale and illumination. Recent work has shown that scale-space ‘interest points’ may be found with good repeatability in spite of such changes. Furthermore, the high entropy of the surrounding image regions means that local descriptors are highly discriminative for matching. For descriptors at interest points to be robustly matched between images, they must be as far as possible invariant to the imaging process. In this work we introduce a family of features which use groups of interest points to form geometrically invariant descriptors of image regions. Feature descriptors are formed by resampling the image relative to canonical frames defined by the points. In addition to robust matching, a key advantage of this approach is that each match implies a hypothesis of the local 2D (projective) transformation. This allows us to immediately reject most of the false matches using a Hough transform. We reject remaining outliers using RANSAC and the epipolar constraint. Results show that dense feature matching can be achieved in a few seconds of computation on 1GHz Pentium III machines.",
"title": ""
},
{
"docid": "7c4c33097c12f55a08f8a7cc3634c5cb",
"text": "Pattern queries are widely used in complex event processing (CEP) systems. Existing pattern matching techniques, however, can provide only limited performance for expensive queries in real-world applications, which may involve Kleene closure patterns, flexible event selection strategies, and events with imprecise timestamps. To support these expensive queries with high performance, we begin our study by analyzing the complexity of pattern queries, with a focus on the fundamental understanding of which features make pattern queries more expressive and at the same time more computationally expensive. This analysis allows us to identify performance bottlenecks in processing those expensive queries, and provides key insights for us to develop a series of optimizations to mitigate those bottlenecks. Microbenchmark results show superior performance of our system for expensive pattern queries while most state-of-the-art systems suffer from poor performance. A thorough case study on Hadoop cluster monitoring further demonstrates the efficiency and effectiveness of our proposed techniques.",
"title": ""
},
{
"docid": "e33e3e46a4bcaaae32a5743672476cd9",
"text": "This paper is based on the notion of data quality. It includes correctness, completeness and minimality for which a notational framework is shown. In long living databases the maintenance of data quality is a rst order issue. This paper shows that even well designed and implemented information systems cannot guarantee correct data in any circumstances. It is shown that in any such system data quality tends to decrease and therefore some data correction procedure should be applied from time to time. One aspect of increasing data quality is the correction of data values. Characteristics of a software tool which supports this data value correction process are presented and discussed.",
"title": ""
},
{
"docid": "8f621c393298a81ef46c104a92297231",
"text": "A new method of free-form deformation, t-FFD, is proposed. An original shape of large-scale polygonal mesh or point-cloud is deformed by using a control mesh, which is constituted of a set of triangles with arbitrary topology and geometry, including the cases of disconnection or self-intersection. For modeling purposes, a designer can handle the shape directly or indirectly, and also locally or globally. This method works on a simple mapping mechanism. First, each point of the original shape is parametrized by the local coordinate system on each triangle of the control mesh. After modifying the control mesh, the point is mapped according to each modified triangle. Finally, the mapped locations are blended as a new position of the original point, then a smoothly deformed shape is achieved. Details of the t-FFD are discussed and examples are shown.",
"title": ""
},
{
"docid": "3c8e85a977df74c2fd345db9934d4699",
"text": "The abstract paragraph should be indented 1/2 inch (3 picas) on both left and righthand margins. Use 10 point type, with a vertical spacing of 11 points. The word Abstract must be centered, bold, and in point size 12. Two line spaces precede the abstract. The abstract must be limited to one paragraph.",
"title": ""
},
{
"docid": "9cbe52f8a135310d5da850c51b0a7d08",
"text": "Training robots for operation in the real world is a complex, time consuming and potentially expensive task. Despite significant success of reinforcement learning in games and simulations, research in real robot applications has not been able to match similar progress. While sample complexity can be reduced by training policies in simulation, such policies can perform sub-optimally on the real platform given imperfect calibration of model dynamics. We present an approach – supplemental to fine tuning on the real robot – to further benefit from parallel access to a simulator during training and reduce sample requirements on the real robot. The developed approach harnesses auxiliary rewards to guide the exploration for the real world agent based on the proficiency of the agent in simulation and vice versa. In this context, we demonstrate empirically that the reciprocal alignment for both agents provides further benefit as the agent in simulation can optimize its behaviour for states commonly visited by the real-world agent.",
"title": ""
}
] |
scidocsrr
|
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