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Introduction
Investment Portfolios
Investment Terminology and Instruments
Technical Analysis and Trading
Cryptocurrencies and Blockchain
Retirement
Retirement Accounts
Personal Finance
Corporate Basics
How do I determine the right mix of assets?

How do I determine the right mix of assets?

Asset allocation tools and Monte Carlo simulators are available through broker-dealers and online services. You may wish to construct your own asset allocation, but there are asset allocation programs available which can take a lot of the uncertainty out of the process. The most famous method for analyzing and testing an allocation involves the so-called Monte Carlo simulation. This simulator helps you determine what would have happened with your portfolio if you were invested according to a particular mix of assets. Three main parameters you should consider for each asset class are: the asset’s historical performance, its volatility, and its correlation to other asset classes. Continue reading...

How Can I Use the Money From My Coverdell ESA?

Coverdell ESA accounts can be used to cover educational expenses. Similarly to a 529 Plan, the money from a Coverdell ESA can only be used for qualified educational expenses. However, the definitions for “qualified” are broader with this plan, and can be used for educational expenses from Kindergarten through high school, in addition to postsecondary (college) expenses. The downside is that Coverdell’s have a low contribution limit of only $2,000 per year. Continue reading...

What is adaptive selling?

What is adaptive selling?

Adaptive selling is a sales and marketing principal where the product or services offered are framed or actually modified based on the preferences or demographics of the audience or client. Adaptive selling requires the ability to customize a shopper’s experience as they interface with the real or virtual storefront. The sales system leaves room to learn about the customer and to adopt the language and products offered based on changing interpretations of the customer. This may require a well-trained sales representative or a well-designed computer algorithm, as has been implemented on some e-commerce sites. Continue reading...

What is Accrued Revenue?

Revenue that has not yet been received for goods or services already rendered may be documented as Accrued Revenue. Accrual accounting allows a business to put the payments due to it for good and services already rendered into the Assets column of its books. If no invoice or payment plan is established, it sits in the Accrued Revenue line; if so, the item goes into Accounts Receivable. Accrual accounting is different than cash accounting in this regard: cash accounting will only make an entry on the books when cash or goods are exchanged. Accrual accounting is actually mandatory for publicly traded companies with revenues over $5 million who are based in the US, per SEC regulations. Continue reading...

What is a Bankruptcy Trustee?

A bankruptcy trustee is appointed to oversee the liquidation of a debtor’s estate. A bankruptcy trustee has an obligation to do all he or she can to maximize the amount that a bankrupt entity’s estate can pay to the debtor’s unsecured creditors. The trustee must also challenge the claims of a creditor where appropriate. The estate is constituted of all of the bankrupt entity’s nonexempt assets. The trustee will oversee the “341” meeting, in the case of Chapter 7 bankruptcy. Continue reading...

What are Solvency Ratios?

Solvency ratios come in several flavors, but they all seek to shed light on a company’s ability to pay its long-term debt obligations. There are several types of what is known as solvency ratios. Some examples of solvency ratios include debt-to-equity, debt-to-assets, interest-coverage ratio, the quick ratio, the current ratio, and so forth. These are meant to be metrics for a company’s ability to meet its debt obligations through various market conditions. The quick ratio, for instance, can reveal whether the current-year liabilities (payables) of a company are covered by the current year cash and receivables, or whether the company will depend on other sources such as inventory liquidation to meet this need. Continue reading...

What is Form 4563: Exclusion of Income for Bona-Fide Residents of American Samoa?

IRS Link to Form — Found Here Residents of US Territories will sometimes have to file their taxes with their resident territory as well as the US Department of Revenue. For those who are bona-fide citizens, they are more likely to be able to exclude their income from US taxation. Bona-fide residency of a territory is most easily defined by the 183-day rule: if the person is physically present and living in the territory for 183 days out of the year, he or she is a bona-fide resident of the territory (in most cases). Beginning or ending bona-fide residency requires form 8898. American Samoa is the only place that can exercise the “possession exclusion,” as defined in IRC Section 931. Continue reading...

What is Mortgage Par Rate?

Lenders have a different par rate for different types of borrowers, which is the base around which they have the ability to negotiate deals. The par rate will be based on the prevailing interest rate environment, with factors changing it slightly for different potential borrowers and the risk associated with them based on creditworthiness. Par rate is the fair market value of a loan for a person with certain risk characteristics, from a lending institution of certain size and qualities. The par rate is the reference point around which a borrower and a lender will strike a deal, even though this is often unknown to the borrower. If the lender, which might be a bank loan officer or a mortgage broker, gives the borrower a break on the front-end cost of the loan, the borrower might have some interest tacked on to the par rate to make up for it. Continue reading...

What is the Falling Flag (Bearish) Pattern?

What is the Falling Flag (Bearish) Pattern?

The Falling Flag (or Bearish Flag) pattern looks like a flag with the mast turned upside down (the mast points up). The pattern forms when falling prices experience a consolidation period, and the price moves within a narrow range defined by the parallel lines through points 2-4 and 3-5. After the consolidation, the previous trend resumes. This type of formation happens when anticipation of a downtrend is high, and when a security’s price consolidates during a broader decline. It may indicate growing investor concern of an impending downtrend. Continue reading...

Day trading with RSI

Day trading with RSI

The Relative Strength Index (RSI) is a momentum oscillator developed by Welles Wilder. In the RSI, the average gains and average losses over a specific time period (such as 14 days) are divided to calculate the Relative Strength, then normalized into the Relative Strength Index (RSI), which is range bound between 0 and 100. The RSI typically fluctuates between values of 70 and 30, with higher numbers indicating more momentum. According to this indicator, a security with an RSI over 70 (out of 100) can be considered overbought, while a security with an RSI under 30 (out of 100) can be considered oversold. Continue reading...