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What is Cash Available for Distribution?

Cash Available for Distribution is a term used in REITs and sometimes corporate accounting for the balance of earnings left over after expenses have been paid. After expenses have been paid and a reserve fund amount has been set aside for taxes and other recurring expenditures, there may be enough earnings left over to be designated as Cash Available for Distribution (CAD). It might also be called Funds Available for Distribution (FAD). Continue reading...

How to use the Accumulation/Distribution in trading

The Accumulation/Distribution Indicator (originally called the Cumulative Money Flow Line) tracks cash flow into or out of a security and correlates the cash flow changes to changes in the security price. By following the trading volume into or out of a security, it establishes the degree of correlation between this trading volume and the price of the security. Accumulation/distribution is designed to reveal divergences in price trends (specifically between stock price and trading volume). These divergences indicate the degree to which a security may be overbought or oversold at a given time. Continue reading...

What are Periodic Distributions from a 401(k)?

Periodic distribution is a planned intermittent payment of cash from a 401(k). If you choose to have your money distributed periodically, you will usually have a choice between monthly, quarterly, or even annual payments. Money distributed periodically is not subject to the same 20% withholding the lump-sum payment is. The periodic payments are treated as wages, and, because plan participants taking these payments in retirement may find it easy to calculate what their income will be for the year, they can instead plan for their actual tax bracket, or opt-out of withholding if they prefer. Continue reading...

Can I Take a Periodic Distribution from my Pension Plan?

Regular pension payments are periodic distributions. Yes. This will be the default option on pension arrangements, unless companies are trying to settle with pensioners for lump-sum amounts that will lessen the plan’s long term liability. The options for periodic distributions will always be for periods less than or up to a year in length. Periodic distributions can help you sleep better at night, knowing that you have a fixed stream of income for the rest of your life. It may not be enough to sustain your lifestyle completely, but it will give you a sense of financial security and prohibit overspending in a way that the lump-sum distribution does not. Continue reading...

Can I Take a Periodic Distribution From My Cash-Balance Plan?

Periodic distributions are one of the main ways that former employees enjoy the benefits of a Cash Balance plan. Yes, you can take periodic distributions from your cash-balance plan. As opposed to the other option (lump-sum distribution), opting for the periodic distribution can help you sleep better at night, knowing that you have a fixed stream of income for the rest of your life. This Life Annuity option is mandated by law to be an option to participants of a cash balance plan. 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...

What is the Difference Between a Blockchain and a Database?

Blockchains use distributed ledgers, which are decentralized and do not rely on centralized databases. Databases are the traditional way to store information and to keep it secure. When companies store information about their customers, or about the business itself, it is usually kept in a database connected to servers that handle requests for the information. The design for such a system tends to look like a wagon wheel:  a central hub with numerous spokes connecting it to the outer wheel.  Layers of security are heaped onto centralized servers and permit access to various levels of information is given to specific users. Continue reading...

What Can a Blockchain Do?

Blockchain technology is already being used and developed for many important and impressive applications, and much more is yet to be discovered. Blockchains use distributed work to obtain consensus for changes to a distributed ledger.  Because of their nature, blockchains are incredibly powerful tools that can be used in many realms and applications. They offer security in that they are almost unhackable; any attempted unauthorized changes to the system are immediately obvious to the entire system because it is built on agreement and consensus among its many nodes. Because this structure gives each addition to the ledger, and the record in the ledger, a high degree of integrity and security, future applications of blockchains are being researched in various fields around the world. Continue reading...

What is a Decentralized Application?

The Ethereum platform allows developers to use it as a coding environment and distribution network for applications built on the blockchain. The ability to create distributed applications on a blockchain is a novel idea that has gained a lot of momentum since Ethereum’s release. Developers can write and distribute their applications over the blockchain network, at little to no cost, while removing the necessity of running a website or a large server database because the blockchain satisfies these needs. The code for the application becomes part of the blockchain ledger, and users who wish to use some functionality of the decentralized application, or Ðapp as they are called, will submit requests to the Ethereum blockchain, pay the transaction fees for the distributed network to process the requests, and the network will call on the code of the Ðapp stored in the blockchain and process it using the computing power of the distributed network sometimes called the Ethereum Virtual Machine. Continue reading...

What is the Ethereum Virtual Machine?

Ethereum has a Turing-complete platform built into it that allows the blockchain to function like a large distributed computer. The Ethereum Virtual Machine is a part of every Ethereum client software on the blockchain, and it allows the interconnected computers to function as one processor. Distributed computation such as this is not really a new thing, but the fact that it allows all developers in Ethereum to decentralized their projects makes this one of the most revolutionary aspects of the Ethereum platform. Continue reading...

How Does Blockchain Technology Work?

Blockchains are intended to maintain integrity in the system without anyone needing to monitor or control it. By instituting a system of checks and balances that functions on its own accord through rules programmed into the protocol, and which also makes decisions and keeps records based on consensus throughout a peer-to-peer network, a blockchain oversees its own activities without requiring any trust in a central authority or the other parties involved. Continue reading...

How do Bitcoin Transactions Work?

Two words: blockchain technology. Transactions in bitcoin are encoded, packed into a block of other transactions, and all of these are sent out to thousands of computers running blockchain computations, known as hashes. All of these computers are running similar algorithms designed to force honest work and to take time for the computers to complete. The purpose of this step is merely forcing the blockchain to require time, energy, and effort, and to be randomized and decentralized when it is validating transactions. Whichever computer solves it first receives an incentive reward, and the entire blockchain, comprised of all computers running bitcoin client software, then updates the ledger to include the most recent validated transactions. Continue reading...

Is Bitcoin Legal?

Bitcoin remains a technology and a currency that primarily exists outside of the influence and control of governments and regulated markets. In most places, it is accepted for what it is. In some countries, it is explicitly banned. Bitcoin is technically illegal in a few parts of the world, but for the most part, it remains in the extra-legal realm, existing outside of the traditional legal system and the regulated markets. Bitcoin was created in large part to be difficult to understand and to pin down, to be part of the fringe and underground that could not be controlled by a central authority. It is open-source, so no one owns the rights to the code, and the community of programmers interested in shaping the future of cryptocurrency frequently attempts to make small upgrades and tweaks to blockchain technology in the interest of creating more efficient, more scalable blockchain cryptocurrency. Continue reading...

Can I Take Loans Against My 401(k)?

401(k) plans typically allow loans to be taken, so that investors don’t have to pay taxes or an early-withdrawal penalty on the money. Many 401(k) plans allow loans to be taken out on the account balance, up to certain limits, and on a strict repayment schedule. Most plans require loans to be repaid in under two years, but they can give participants up to 5 years to repay a loan. Taking money out as a loan allows participants to avoid early withdrawal penalties and taxes. If the loan is not repaid on-time, it can be treated as a distribution, however, which might cause the investor to incur taxes. Investors usually don’t fully realize the damage that loans (and early withdrawals) can do to the long-term account balance. Continue reading...

What is standard deviation?

Standard Deviation is a measurement of how far from the average (mean) the majority of a data set lies. Standard Deviation is a measure of variability, and it is on a different scale for each data set being measured; there is no “standard” standard deviation. It is possible to normalize it for comparison to other data sets using measurements like r-squared and the sharpe ratio. The number arrived at when computing standard deviation is going to reveal the distance, in terms of one of the quantifiable variables being observed, from the average, in either a positive or negative direction, within which 68% of the data set falls. Continue reading...

What is Bond Yield?

Bond yield is a measure of the return on investment for bonds, and there several kinds of yield that can be computed. Yield on a bond is the amount of interest that it pays annually, as a percentage of the amount invested — at least, this is the most common type of yield discussed, which is known as Current Yield. If a bond pays quarterly or monthly income to the investor, these payments are totaled up and divided by the amount invested. Continue reading...

What are the Withdrawal Rules From My Self-Employed 401(k)?

Individual 401(k)s will have the same withdrawal rules as regular 401(k)s. The withdrawal rules for a Self-Employed 401(k) are identical to the rules for a traditional 401(k). If you want to avoid a 10% early withdrawal penalty, you’ll need to keep the money in your account until you reach age 59½, but if you separate from service after 55 you may be able to make withdrawals penalty-free. If you really need the money early, certain exceptions for disability, medical expenses, 72(t) annuitized distributions, and plan loans can allow you to sidestep the penalty. Withdrawals for any other reason, including hardships, are still subject to the penalty. Continue reading...

How to use the Chaikin Oscillator in trading

The Chaikin Oscillator is a volume indicator that can help traders discern if price movements are verified by changes in trading volume. When there are discrepancies, it can mean that prices are exhibiting overbought or oversold conditions. Before the Chaikin Oscillator, On-Balance Volume was the most popular indicator for the job. On-Balance Volume (OBV) is a popular leading indicator introduced in the 1960s by Joe Granville. OBV is a line built using differences between daily trading volume – in Granville’s estimation, the major driver of market behavior – adding the difference on days that the market or stock moves up and subtracting the difference on days when the market or stock moves down. It looks for instances of rising volume that should correlate with price movement, but price movement has not occurred; additionally, OBV can be used to confirm lag. Continue reading...

When Do I Have to Start Taking Money Out of My IRA?

The IRS requires IRA owners to take distributions starting at age 70 ½. By April 1st of the year following the year you turn 70 ½, the IRS needs to see a distribution from your IRA that satisfies the Required Minimum Distribution rule. The RMD is calculated using a table published by the IRS, and each age is assigned a different “factor.” The factor is a number, and you divide the balance of your IRA or 401(k) by that number to reveal the amount that will satisfy your RMD obligation. The factor decreases incrementally as the ages increase. Continue reading...

Can I Withdraw Money From My Cash-Balance Plan?

It’s not likely that a cash-balance plan will allow for early withdrawals. Generally speaking, you can’t withdraw money from a Cash-Balance Plan before you retire unless it is to roll over assets to a new employer’s plan or a personal IRA. Once the money is in another account, you could potentially have full access to it, minus the 10% IRS penalty if you’re under 59 ½. Loans from a cash balance plan may be permitted if they abide by the same rules as 401(k) loans — and if the IRS and the DOL will allow you to consider your vested amount in your hypothetical account as adequate collateral. Continue reading...