What are Balanced Funds?
Balanced funds offer a well-diversified investment that includes relatively equal exposure to stocks and bonds. Balanced funds combine stocks, bonds, and money market instruments to give investors some upside potential along with a goal of capital preservation. While they are considered to be safer, they also have more modest returns in most market environments, because of course lower risk investments have lower potential returns. Continue reading...
What are Double and Triple ETFs?
Double and triple ETFs are also known as leveraged ETFs, and their goal is to magnify the performance of the index they follow. Using futures contracts and other derivative instruments, 2x or 3x ETFs attempt to magnify the performance of an index, with the goal of achieving the result daily. Because they also compound daily, they are not usually held for more than a few days. These are also called leveraged ETFs because they use margin, futures contracts, and other derivative instruments to give an investor this magnified exposure. They give you two or three times (respectively) the profits but also two or three times the losses, so one must be very cautious when dealing with them. Continue reading...
How Much Does (and Will) Social Security Pay?
Social Security uses a formula that applies a factor to your average monthly income from the 35 years in which you earned the most. The benefit will be calculated for your Normal Retirement Age (67 for most people today), and you should receive statements in the mail keeping you updated on your projected or actual Social Security Retirement Benefits. Every year, you should get a statement from the Social Security Administration that provides you with exact numbers. The amount depends on the age at which you retire, and the contributions you made to Social Security over the years. The formula uses the 35 years in which you earned the most, and divides it by the total number of months in 35 years, which is 420, which leads to your Average Indexed Monthly Earnings (AIME). Continue reading...
What is the Best Age to Start Receiving Social Security Benefits?
Generally speaking, the closer you are to age 70, the better. But everyone will need to take all of their options into account and use some planning tools or the assistance of a professional planner to arrive at an ideal cash flow scenario for retirement. All assets should be brought into consideration, as well as the possible social security benefits of both spouses and their spousal benefits. There is no one “best age” to start receiving the Social Security benefits. Everyone has a Normal Retirement Age (NRA), which determines the age at which you can receive your “full” Social Security benefits, but you can defer your benefits past this point to receive an 8% increase for every additional year you deferred your benefit. Note that benefits cannot be deferred past age 70. Continue reading...
What is Medicare Part A?
Medicare Part A is the standard, baseline hospital coverage that comes at no cost as part of everyone’s Medicare benefits. It will pay for inpatient stays at hospital and skilled care facilities, but only for a certain number of days. Medicare Part A is hospitalization and inpatient care insurance. It will pay fully for about 20 days of care, but only if there is an inpatient procedure first and the patient appears to be convalescing. If the patient is not gradually recovering, their Medicare benefits will be suspended. Continue reading...
What is Investment Income?
Also referred to as passive income, investment income is money paid to an investor from the dividends, premiums sold, or sale of assets in their portfolio. Some investors treat it like a part-time job, such that there is nothing passive about it. In retirement, investors often receive income from bonds, preferred stock, and dividend-paying common shares. Income can be pulled from several kinds of investments, including real estate, and it is likely to be taxed at ordinary income tax rates. Continue reading...
What is the Difference Between Public and Permissioned Blockchains?
Blockchain technology does not always have to be implemented in a public peer-to-peer system. Blockchains rely on a network of computers, representing nodes, that collaborate and distribute the information required for the blockchain to function. The nodes in some blockchains can be established by any computer willing to run the client software for the network. Bitcoin and most cryptocurrencies are intended to function this way: as a public, open-source, permission-less, and trust less network. The nodes are used indiscriminately by the rest of the network as long as the node is performing the functions required of nodes, and this is called a proof-of-work system. When Satoshi Nakamoto coded the first blockchain, his intention was to keep the network functioning with only one tier: “one CPU, one vote.” That vision has encountered obstacles in the form of ASIC mining and other unforeseen circumstances that have empowered some nodes and groups of users over others. Continue reading...
How to use Andrew's Pitchfork in trading
Alan Andrews designed Andrew’s Pitchfork to define a trend with support and resistance lines around a median line, all three of which are derived from three points at peaks and troughs around the onset of a current trend. The overlay takes the shape of a trident or pitchfork, with Andrews calling the lines “tines,” after a pitchfork’s prongs. The origin point is placed at the location of a major trend reversal or a definitive support/resistance level, forming beginning of the pitchfork’s “handle.” Once the incline of the pitchfork is suitable, traders can attempt to use it for indications of overbought/oversold conditions, or to indicate a transition to a new trend. Continue reading...
What is the Law of Supply?
All other things being equal, if the price of a good increases, the supply of that good will increase, and this is known as the Law of Supply. The Supply Curve is plotted on a graph with a y-axis being price and an x-axis being quantity. The relationship is positive and the line will climb up to the right. The is the opposite direction of the Demand Curve, and the place where the two intersect is considered to be the point of market equilibrium. The curves can be shifted by variables not present on the graph, such as changes in levels of income and other factors, but the slopes will remain the same, theoretically. Continue reading...
What is Federal Debt?
Federal debt is the money owed by the government. The primary source of this debt is Treasury Bonds (Notes), which constitute debt obligations. About 25% of the current national debt is owed internally between different government agencies, mostly to the Social Security Trust Funds. The Federal Debt is also, and perhaps more commonly, referred to as the National Debt. Currently the debt is approximately $19 Trillion. Continue reading...