What are Real Estate Funds?
Real estate mutual funds invest in publicly-traded companies in the real estate industry, and are slightly different than REITs. A real estate mutual fund invests in companies in the real estate industry. These companies will include real estate brokerage companies in the commercial, residential, or raw land sector, as well as the lending institutions that are involved in such transactions, among other holdings. Continue reading...
What does asset allocation mean?
At the highest level, Asset Allocation refers to an investor’s decision of what percentage to allocate to stocks, versus bonds, versus cash (and cash equivalents), versus any other asset class (commodities, alternatives, real estate, etc…). It is believed that the asset allocation decision is responsible for the majority of an investor’s returns. In other words, there is a direct correlation between an investor’s long-term return and how long - and to what percent - they owned stocks over their lifetime. Continue reading...
What does Ask Mean?
In the financial markets, “Ask” is the price that a seller is willing to accept for a security. It is also known as the offer price. Given the market is constantly changing, Ask prices are rarely set in stone for long. What’s more, the Ask price on a security may not necessarily be the best going price available for it. It merely represents what that particular seller is willing to accept for it. What is a “Spread”? What is a Market-Maker Spread? Continue reading...
What is IRS Publication 544 on Sales and Other Dispositions of Assets?
IRS Link to Publication — Found Here This guide is a reference for the tax implications of sales, transfers, barters, exchanges, forfeits, repossession, condemnation and abandonment of property. Where gains or losses are manifested, the guide helps to differentiate between capital gains and ordinary gains, as well as how to figure and report the gains or losses. Often when people sell or dispose of property in various manners there is a question of what the tax implications are, how much of the transaction is taxable, and whether any amount of it can be applied toward tax deductions. This guide, Publication 544, will outline all of the necessary filing forms and reporting practices for almost any kind of sale or disposition of property. Continue reading...
What is a No-Appraisal Mortgage?
Most mortgages require that an appraisal or at least inspection is done before any loan is made. There are exceptions to this, in the form of no-appraisal mortgages which are available to lower-income homeowners, qualifying members of the military and its veterans, and some farmers. Most no-appraisal loans are through federal programs such as HARP, FHA, and the VA. The purpose of these loans is to keep people in their homes and to keep the economy relatively stable. These are generally not first mortgages, but are relief, modification, and refinancing arrangements to qualifying homeowners that already have a mortgage outstanding. Continue reading...
How Does Cloud Mining Bitcoin Work?
It is possible to participate in bitcoin mining indirectly, by partially funding a remote mining operation. Cloud mining is separate and distinct from pool mining, because instead of owning hardware and pooling resources with other miners to increase the likelihood of securing profits, cloud mining simply secures funding from investors, essentially, who have a contract to participate in profits of a mining pool in a remote locations based on the bandwidth of Gigahashes/s that they would like to fund (“buy”). Continue reading...
What was the Subprime Meltdown?
A high volume of loans issued to those who were unable to repay them, and a high volume of derivative securities traded on top of these loans, contributed to the subprime meltdown of 2007-2009. A large amount of collateralized mortgage obligations (CMOs) and other collateralized debt were owned by large institutions and investors as alternative high yield investments prior to the crash of 2007-2009. Continue reading...
What is the Current Ratio/Liquidity Ratio?
The current ratio is a measure of a company’s immediate liquidity, calculated by dividing current assets by current liabilities. The value of this ratio lies in determining whether a company's short-term assets (cash, cash equivalents, marketable securities, receivables and inventory) are sufficient enough to pay-off its short-term liabilities (notes payable, current portion of term debt, payables, accrued expenses and taxes). Generally speaking, the higher the current ratio, the better. Continue reading...
What are Fibonacci Retracements?
Fibonacci Retracements are places where a Fibonacci lines and arcs. If a retracement has a length that proportionally fits within certain parameters in comparison to the uptrend that preceded it, some traders attempt to predict the size of the uptrend that will come afterwards using Fibonacci numbers. The most popular retracement percentages to use are 23.6%, 38.2%, 50%, 61.8%, and 100%. Fibonacci numbers are part of the Fibonacci sequence, where the two previous numbers are added together to calculate the next number in the sequence. The ratio of two Fibonacci numbers is the Golden Ratio, or 1.61803398875, which has been used since ancient times as the perfect proportion in architecture and other design. The Golden Ratio is also known as Phi (pronounced “fee”). Because Fibonacci numbers are found throughout the natural world, they have been integrated into some traders’ strategies for market analysis. Continue reading...
What is a bear market?
Bear markets are loosely defined as periods when markets experience declines in magnitude of 20% or more. More specifically, bear markets are a period in which a major index like the S&P 500, for example, declines by 20% or more, with this decline sustained for a period over two months or so. Consequently, many investors become “bearish” – they lose confidence in the market, sell off their securities they do not believe will recover soon, and sit on the sidelines. There have been 25 bear markets since 1929, for an average of one every 3.4 years. Continue reading...