What are Mergers and Acquisitions (M&A)?
Companies often hold minority interest positions in other companies, but sometimes they decide to merge into one company, maybe by selling-out to a bigger company, or acquiring a smaller one. Very often, small companies are very agile and develop new technologies quickly, but do not have sufficient funds to bring them to the market. Large companies need the technologies and it is cheaper for them to buy smaller companies rather than spending money to develop them on their own. Continue reading...
Should I have real estate investments?
Real estate has long been used as an alternative investment, to give investors a non-correlated asset that can give a portfolio increased diversification. In the last 15 years or so, with the prevalence and popularity of REITs and real estate industry funds, real estate investments are considered by some to be a core holding instead of an alternative investment. Real Estate investments are so accessible now that they should be considered an indispensable part of any portfolio. Continue reading...
How Do I Take Money From My 401(k) After I Retire?
Different 401(k) custodians will have different distribution options available to participants in retirement. After you retire, you have at least two disbursement options: lump-sum distribution and periodic distribution. If you take a lump-sum distribution that is not bound for an IRA, you will incur a significant tax bill, since all 401(k) distributions are taxable. Periodic distributions may mean that every so often you can choose an amount to be paid out to you on a quarterly basis, for example, while your investments remain intact and you attempt to accrue more interest on your money. Continue reading...
What is Medicare Part A?
Medicare Part A is the standard, baseline hospital coverage that comes at no cost as part of everyone’s Medicare benefits. It will pay for inpatient stays at hospital and skilled care facilities, but only for a certain number of days. Medicare Part A is hospitalization and inpatient care insurance. It will pay fully for about 20 days of care, but only if there is an inpatient procedure first and the patient appears to be convalescing. If the patient is not gradually recovering, their Medicare benefits will be suspended. Continue reading...
What is a Balloon Payment?
A balloon payment is a lump sum due at the end of a balloon loan term. In a balloon loan arrangement, the payment schedule does not amortize the entire amount of the loan, but instead allows for lower installment payments by holding a lump-sum payment until the end of the term. These terms are usually relatively short, such as 5 years, and often these arrangements are taken by individuals or consumers who plan on refinancing before the balloon payment comes due. Continue reading...
What is a Hostile Takeover?
A hostile takeover may not be as intense as it sounds, but it may not be pleasant for all those involved. It is an acquisition in which the controlling interest of shares in one company has come under the direction of another company, and the newly controlling company has decided to integrate the target company into their operations, which often results in cutting redundant jobs and making other decisions that the target company would probably not have made on its own. Continue reading...
What is a Homeowners Association (HOA)?
A homeowner’s association (HOA) will exist in many planned communities and subdivisions, and the association will usually expect dues to be paid from all residents in a community. They will have a board of directors, usually, who make it their business to help maintain the quality of the neighborhood by making sure common areas are taken care of and that residents are complying with the community rules. A HOA may have rules in place that make a place unpleasant to live in for some people. Continue reading...
What does the Efficiency Ratio Mean?
The efficiency ratio is a metric that measures how effectively a company uses its assets and liabilities to run the business smoothly. There are several types of efficiency ratios that can give an analyst insight into a company: accounts receivable turnover, fixed asset turnover, sales to inventory, and and stock turnover ratio. Continue reading...
What is the Rectangle Bottom (Bearish) Pattern?
The Rectangle Bottom pattern forms when the price of a security is stuck in a rangebound motion, bouncing between support and resistance levels. Two horizontal lines (1, 3, 5) and (2, 4) form the pattern. Depending on who gives up first buyers or sellers the price can Breakout in either direction. This pattern is commonly associated with directionless markets. Usually the pattern performs better when there is a strong downtrend leading into the formation. Continue reading...
What is a Moving Average Ribbon?
A moving average ribbon is created by plotting many incremental moving average lines on top of the same price chart. The visual relationship of the moving averages can help reveal crossover points, which traders can use as trade signals. As with other crossover indicators, the shorter-term moving average lines will tend to move more than the longer-term ones, and the degree of momentum that the crossovers imply increases for moving average lines of lengthier look-back periods. Continue reading...