Why Should I be Extremely Careful with Commodities ETFs?
There are some things to keep in mind when investing in commodities and their ETFs. Most commodities trading revolves around who owns a hard asset and when. ETFs occupy a space in the commodities world that is somewhat unique. An ETF such as the Crude Oil Index does not physically buy millions of barrels of oil and store them. It buys financial instruments which theoretically should reflect the price of oil. Continue reading...
What are Medicare Benefits?
Medicare is a medical insurance benefit for Americans 65 years of age or older, but it also provides coverage for those with severe disabilities, ALS (Lou Gehrig’s disease), and ESRD (end-stage kidney disease) at any age. The premiums for what is known as Part A are paid throughout the insured’s working career, with Part B available as a supplement at low cost. Once you’re over 65, this becomes your medical insurance unless you’re still on an employer’s plan. Medicare provides coverage for in-patient procedures and short stays in the hospital, as well as hospice care and a few other small benefits for home health care. That is just for Part A—the “free” portion of Medicare people pay into over their working lives as part of their FICA taxes. Continue reading...
How Do I Know I’m Getting Credit for the Years I’ve Worked?
Create an online Social Security Account — Here For about a decade from 2000-2010, every worker in America would receive an annual statement in the mail. This fell subject to budget cuts, and today workers are encouraged to go online to view their social security information. Some workers receive mailings every 5 years to remind them if they have not signed up for the online statements. Starting in 1999, the Social Security Administration mailed 4-page annual statements to over 150 million workers. About 500,000 of these were delivered every day, at an annual cost of about $70 million. Budget costs eventually caused the statements to go paperless for a while, and as of 2016, workers who have not registered online will receive a letter every 5 years that contains a statement and information about how to register for the online statements. Continue reading...
What is IRS Publication 502 on Medical and Dental Expenses?
IRS Link to Publication — Found Here Publication 502 outlines which types of medical and dental expenses are deductible, who can be included in your considerations, what the limits are on deductions, and more. This publication is primarily meant for individuals but businesses might find it useful as well. Publication 502 is a source of information for all tax information regarding deductions stemming from medical and dental expenses and insurance. Continue reading...
What is the Price to Sales Ratio (P/S Ratio)?
The Price to Sales Ratio, also known as the PSR, is a valuation metric that looks at a stock’s market price versus its per share revenue. Alternatively, you can calculate it by dividing a company’s total market capitalization by its total revenue in the most recent fiscal year. The ratio indicates how much value (how much investors are willing to pay) is placed on each dollar of revenue generated by the company. Continue reading...
What is Cash Budget?
Budgeting is the act of planning accounts for the future. A cash budget plans out the expected cash flow of a business. Sales and production estimations are used along with historical cash flow data to project where money will come from and where it will be spent in the months ahead. A cash budget tends to be laid out on a monthly basis. Accounting is the documentation of the outlay of all expenses and income from the past, while budgeting is act of building an outlay for the future. A cash budget tries to ensure that there is more cash coming in than going out; any excess cash can be rolled forward into the budget plans for the following months, and this is called a cash roll. Continue reading...
What is market share?
Market share is the percentage of the total amount of similar products sold in a marketplace that are constituted by a particular product or the products of a particular company. This sometimes used synonymously with the term Market Penetration. Most industries have many competitors offering essentially the same services and products; in fact that is a sign of a healthy capitalistic marketplace. The market share of a company is the proportion of the total sales in that industry that belong to their company. Continue reading...
What is a Limit Order?
A Limit Order is a type of order to buy or sell a security, where the trader wants to set a specific price for the trade, or any price that’s better than the price set. From a buy and sell standpoint, a buy limit order would be designed to have the trade executed at the designated price, or any price lower than that. A sell order is just the opposite, where the trader hopes to execute the trade at a minimum set price. Limit orders typically have a period of time before they are canceled, if the designated price is not reached by a certain period. Continue reading...
What is the difference between active and passive money management?
The debate on whether active or passive management is better for investors has polarized many advisors and theorists for years. There are two schools of thought when it comes to long-term investing. One basically states that you should determine a proper allocation of asset classes for yourself, buy index funds to reflect each particular asset class, and possibly rebalance the portfolio periodically. This basically means “set it and forget it,” and the investor must be willing to ignore fluctuations in the markets and maintain a faith in an Efficient Market. Continue reading...
What is dollar cost averaging?
Dollar cost averaging (DCA) is a method of hedging against the risk of investing a lump sum at high market prices. With DCA, the investor deploys money at set intervals, hoping to get the best average price per share. If you use the same amount of money to buy shares at set intervals, you will acquire more shares when the market is down, and fewer shares when the market is up, so theoretically you would have acquired more of the advantageously-priced shares overall and will be in a better position in the long run. Continue reading...