What is a Coverdell ESA?
A Coverdell ESA is an account which can be used to save for educational expenses. These used to be called Educational IRAs until someone realized that didn’t make sense. A Coverdell Educational Savings Account (ESA) allows you to save money for your child’s future education costs. As opposed to a 529 Plan, which is limited to post-high school education, money from an ESA can be used as early as Kindergarten. Continue reading...
What is Universal Life Insurance?
Universal Life Insurance is a permanent cash value insurance that has a term-insurance component and a savings component as well. The savings component is invested in a tax-deferred account, designed to create a cash build-up that can increase the death benefit or to be used at the discretion of the policy-owner. The cash grows inside the policy tax-deferred, and if money is taken out as a loan, it avoids taxation as income. Continue reading...
What is the gordon growth model?
The Gordon Growth Model is also known as the dividend discount model (DDM). It is a model for pricing a stock that was developed by professor Myron J. Gordon in the 1960s. The model uses a stock’s present value relative to the present value of its future dividends to provide an intrinsic value for the stock. The model is a shaky one at best, especially given that companies these days often change the course of dividend payments, and many (particularly in the tech world) don’t pay any dividends at all. Continue reading...
What is Required Rate of Return?
Required Rate of Return is the return that investors will expect to earn on their money, given the risk and costs involved. Required Rate of Return is determined by the market for a particular security or asset at a given time. Issuers of fixed or variable coupon bonds must look at the rates offered by their peer institutions with similar credit ratings. Investors will require a certain rate of return if they are going to invest their money, and this is where the RRR gets its name. The calculations which help an issuer to arrive at the RRR will include the current risk-free rate (10 year treasury bond rate), liquidity, inflation, and so on. Continue reading...
What is a market-on-open order?
Traders can enter time-specific trade orders in the form of opening or closing orders, which are only to be executed as close to the opening or closing price as possible. Market-on-open orders are looking to buy or sell immediately after the market opens, at the opening price. Market-on-open orders are instructions for a broker or floor trader (even though we don’t see those much anymore these days) to buy or sell shares at opening price of the stock being traded. Continue reading...
What is an Uptick?
An uptick is an incremental increase in the trading price of a security. Uptick is a slight increase in the trading price of a security. The word comes from the "ticker price" of a stock, which used to be printed out on ticker tape from a printer connected to telecommunication lines which reported updates in trading information throughout the day. Now tickers run electronically across the bottom of television screens and so on. Continue reading...
What is a Private Placement?
Investing in a private placement opportunity is done off-exchange, and usually involves a small number of investors who are either institutions or accredited private investors. There are many possibilities when it comes to the types of private placement investments that can be made, but the nature of the offering is that it is not public, it is made to a small number of institutional level or individual accredited investors (see Regulation D, Rule 505 and 506), and the offering is not registered with the SEC. Continue reading...
What is the Hindenburg omen and is there any merit to it?
The Hindenburg Omen is technical indicator meant to predict bear markets, sell-offs, and declines. It is named after the famous tragedy of the Hindenburg Zeppelin in Germany on May 6th, 1937. The “Omen” identifies several very complex technical patterns in the behavior of the NYSE, such as the number of new highs, new lows, and some other indicators. It claims to predict market crashes within a very short period of time (about 40 days). Continue reading...
Can You Sell a Bond for Less Than the Price You Paid For It?
Yes, if you sell the bond before its maturity, it’s possible that you would have to sell it at a discount. If you bought a $1,000 bond with a 5% coupon, and a year later, the company issued new $1,000 bonds with a 6% coupon, you would not be able to sell your bond to someone else for $1,000 (obviously, because they would rather purchase the new bonds for $1,000 which pay more annual interest than your old one). Continue reading...
AI Robots: Instructions
With AI Robots, you can view bought and sold trades with potential profit and stop loss in real-time. Receive timely alerts with each trade. Here are the steps: Step 1. Review AI Robots' past performance for free. Step 2. Select an AI Robot you might be interested in based on their customization and statistics. Step 3. Subscribe and follow one AI Robot and get a monthly $60 credit to purchase other products. Step 4. Subscribe and follow two or more AI Robots and get a monthly $120 credit to purchase other products. Step 5. Sign up for 1-on-1 sessions or webcasts. Continue reading...