Where Can I Get Help With My 401(k) Investments?
Not every plan will have an advisor ready to give you personalized attention, but some do. For those that don’t, there are plenty of resources out there. There are countless sources out there, all offering “the best” information about how to manage your 401(k) investments, but very few offer a smart, logical, and practical approach. Most of the time, the advice you get will tell you to diversify among various asset classes, but will never give you specific allocations. It is simply essential to actively monitor your investments and take the reins of your financial future. Continue reading...
What does Bid Mean?
When you make a ‘buy offer’ on a stock or other security in the financial markets, you are making a Bid. A Bid offer in terms of financial markets is the price offered by an investor or trader for a security. A market maker will try to reconcile Bid offers (the highest prices that buyers are willing to pay) with Ask offers (the lowest price that a seller is willing to accept). Match the Bid and the Ask offers, and you’ve got a trade. Continue reading...
Bitcoin’s Source Code, Part 2: What Does It Mean That Bitcoin Is Open-Source?
Open-source software code can be viewed and changed by anyone, but it actually works in the favor of Bitcoin and other cryptocurrencies. Bitcoin’s source code was uploaded by Satoshi Nakamoto to a code-sharing site called Sourceforge, which enabled anyone to download, use, and modify the code as they saw fit. In fact, he encouraged the community to do so. The fascinating thing about the design of Bitcoin and many other open-source software is that they will work, and will continue to exist, without anyone owning the rights to the code. In most people’s concept of ownership and responsibility, the owner is responsible for maintaining something, for protecting it from attacks, manipulation, vandalism, fraud, etc, and is also responsible for making sure that it is safe for other people to use. Continue reading...
What is a Warrant?
A warrant is an agreement giving the holder the right to buy (or sell) a certain number of shares of a company. Warrants are often requested or granted when a company engages in a loan from private investors - it will give the lenders the opportunity to buy and own shares in the company if its stock appreciates or if the opportunity seems attractive. If the company fails to grow and deliver, the warrants can simply go unused with no financial impact for the holder. Like options, there are warrants that confer the option to buy shares (call warrants) and those that allow the holder to sell (put warrants). Continue reading...
What is GAAP?
Freddie Mac is a government-sponsored company which purchases mortgages from banks and securitizes them for sales to investment banks or individuals. Freddie Mac is not a government organization, but was established by a congressional mandate in the 1970’s. It’s proper name is the Federal Home Loan Mortgage Corporation (FHLMC). The company’s purpose is to make mortgage debts into marketable securities by purchasing the mortgage risk and cash flow from banks and dividing into tranches which are sold to or through investment banking institutions. The securitized mortgages are known as Collateralized Mortgage Obligations, or CMO’s. Continue reading...
What is Abatement Cost?
Environmental regulations or lawsuits occasionally force companies to comply by taking measures or acquiring technologies to abate their environmental impact, and the overhead of such projects is called Abatement Cost. Increasingly over the last 20 years or so more countries and states have begun imposing laws on companies to reduce their carbon emissions, noise pollution, and various other environmental impacts. The costs of enacting measures or technologies to help them comply with such regulations is known as abatement cost. Continue reading...
Can I Take a Lump-Sum Distribution From My Pension Plan?
There is no guaranteed option to make lump-sum distributions from pension plans. You may be able to take a lump-sum distribution, but the option is not always available. Most employers are eager to get another participant (liability) off the books. This kind of settlement is a lot like a debt settlement, in fact, that’s exactly what it is to the plan fund. As long as you are part of the plan, you represent an unknown quantity of liability, because they have to keep paying your benefits, and possibly spousal benefits for as long as either of you shall live. This is an option you may have upon reaching retirement, if the plan offers it to you. Continue reading...
Where Do I Find a Financial Advisor?
A financial advisor can be found through an online search, at events, or through the recommendation of friends. Believe it or not, while there are thousands of resources and databases, the best way to find a Financial Advisor is to ask your friends. You will need to determine a few basic criteria when looking for a Financial Advisor, such as geographical location, his or her age bracket, years of experience, frequency and medium of communication, and the amount of fees you are willing to pay. While there are thousands of resources and databases, sometimes the easiest way to find a Financial Advisor is to ask your friends. Continue reading...
What should I look for in a good Investment Performance Evaluation calculator?
A good investment performance calculator will give you the ability to input various cash flow scenarios and compute weighted returns, among other options. A really useful investment performance calculator will allow you to input various cash flow scenarios and to see weighted returns based on these. Dollar-and-time-weighted performance, dividend cash flows, deposits and withdrawals, as well as fees paid for various transactions, will all be incorporated in a good calculator. Continue reading...
What are Bond Ratings?
The possibility of a company or municipal government defaulting on their bond obligations, usually by going bankrupt, is a real one. For this reason, all bonds are rated according to the financial stability of the issuer. A look at the history of corporate and municipal debt will illuminate the fact that the possibility of the issuer being unable to pay its obligations to bondholders is a very real one. There is an established system of bond ratings that gives a rough estimate of the bond's reliability. Continue reading...