What is Medicare Part D?
Part D is prescription drug coverage to supplement the coverage of Medicare Part A and Part B. It can be a standalone policy, or it can be included in a package with Part C. Medicare Part D is purchased through private insurers. While the premiums vary, they tend to range from $15- $150 a month. There was a maximum deductible of $360 for these plans in 2016, after which the insurer would trigger 75/25 coinsurance or something in that range. Continue reading...
What is an Alternative Trading System (ATS)?
An ATS is a platform separate from an exchange where securities are traded. ATSs provide marketplaces for buyers and sellers to transact in securities, much like a stock exchange. However, they are not available to the entire investment public, and they do not necessarily provide public information on the best prices available to traders within their system. They also do not set rules governing the conduct of subscribers and they perform no self-regulation, while exchanges perform all of these functions. Continue reading...
What is Underwriting?
Underwriting is the process through which risks are accepted by an institution. Underwriting is the assessment of risk or the acceptance of risk after such assessment by a company or bank. Underwriters in insurance companies will assess a risk prior to the company accepting the risk; once the risk has been accepted the company bears the burden of covering the potential losses associated with the risk. The company is paid a premium for accepting the risk. Continue reading...
What is IRS Publication 530, Tax Information for Homeowners?
IRS Link to Publication — Found Here There are many tax questions when it comes to home ownership, mortgages, equity, federal loan programs, selling a home, and so forth. Publication 530 seeks to address all relevant tax information for this large and important financial asset, which is often the largest purchase they will ever make. Homeowners incur expenses for home equity, mortgage interest, private mortgage insurance, improvements and maintenance, and taxes. Much of this can be deducted. Continue reading...
What is a Prospectus?
A Prospectus is a legal document that must be filed with the Securities and Exchange Commission (SEC) when an investment is offered for sale to the public. The most commonly known forms of a prospectus are those that accompany a mutual fund, ETF, or an annuity when purchased by an investor. For an annuity and/or a mutual fund, a Prospectus contains details on the fund management. Continue reading...
What is the Contribution Margin Ratio?
The contribution margin ratio presents a profit (less variable expenses) as a percentage of net sales. For an individual product, the contribution margin ratio would look at that product’s contribution margin ratio as a percentage of the profit made on that sale. The higher the contribution margin ratio, the better. A low contribution margin ratio would indicate that a company would have a difficult time creating a substantial profit from the sale of that product over time. Continue reading...
What is Stagflation?
Stagflation is the occurrence of both stagnation, which is slowing growth and production levels, and inflation, which is the increase of the average cost of goods. If production costs rise for some reason, such as higher oil prices, it can cause economic growth to slow down and the supply of goods in the market to drop. This is known as stagnation. The weakened supply of goods in the market and the higher production costs of the goods will cause the retail prices of the good in the market to go up. Continue reading...
What is Account Settlement?
Settling an account is laying all outstanding business on an account to rest. Account settlement is an idea that can take a few forms. Settlement is when acceptable “consideration” (compensation or pay) has been provided and both parties agree that the matter is settled, resolved, and no further debts or obligations exist for that item of business. Many people have heard the term “settlement” with regards to legal matters, in which the defendant pays off the plaintiff before an actual trial and usually can avoid officially admitting guilt. Continue reading...
If Everyone is Talking about Buying Gold, Should I Buy Some for My Portfolio as Well?
Gold is one of those things that gets plenty of hype and that most investors think they understand well. Gold, as any other commodity (silver, platinum, palladium, oil, wheat, copper, coffee beans, etc), might be a valuable part of your asset allocation. It is important to recognize, however, that gold is an extremely volatile commodity, and there is frequent chatter and hype surrounding it that easily influences many investors. Continue reading...
What is a Dividend?
A dividend is an income-like payment to an investor who holds stock. Dividends tend to be paid by companies who are well established and are not retaining their earnings for capital projects. There are several kinds of dividends, but the most common is the cash dividend. You are not likely to see dividends paid by companies whose stocks are categorized as Growth stocks. Growing companies are going to be ploughing money back into their company for years. Well-established companies tend to distribute some of their profits as dividends because it allows them to retain loyal shareholders and keep the price of the stock fairly steady. Continue reading...