What Investment Options Do Annuities Have?
The investment options in an annuity depend on the insurance company offering the product. The investment options are generally limited, however. If you decided on a Fixed Annuity, the insurance company agrees to pay you a fixed percentage for a set period of time – the rest is completely handled by the company. Usually, this percentage is higher in the beginning (teaser rate), and might go down periodically. Continue reading...
What are the Contribution Limits for My Keogh Plan?
The contribution limit for a Keogh Plan depends on what type of Keogh Plan you set up. There are Defined Contribution and Defined Benefit Keoghs. Defined Contribution plans could be profit-sharing or money-purchase plans. As of 2013, a Defined Contribution Keogh Plan allows the employer to contribute up to 25% of your income, or $53,000, whichever is less, and this will constitute the profit-sharing or money-purchase aspect of the plan. Continue reading...
What is a Housing Bubble?
Bubbles form in markets when there is such a large amount of demand that it drives prices up to levels where it is no longer supported by inherent value. Bubbles have effects on an interconnected web of economic forces and institutions. It was postulated before 2008 that the housing market could not form a bubble in the same way the stock market could, but the subprime meltdown proved those theorists wrong. Bubbles are when a market suffers from unnatural price inflation due to speculation, bandwagon investing, and, to some extent, misinformation. 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 Ascending Triangle (Bearish) Pattern?
The Ascending Triangle pattern has a horizontal top line (1, 3, 5) representing a resistance level, and an upward-sloping bottom line (2, 4). The Breakout can either be up or down, and the direction of the Breakout will determine whether the Target Price is higher or lower. This pattern is commonly associated with directionless markets, since the contraction (narrowing) of the market range signals that neither bulls nor bears are in control. When the price of a pair consolidates around highs it might indicate that a significant downtrend is ahead. Continue reading...
What is Operating Margin?
Operating margin is a ratio (expressed as a percentage) that indicates how much a company makes for each dollar of sales. It can be calculated by dividing a company’s operating income by net sales, and generally a company that has a high and consistently improving operating margin is thought to be healthy. Operating margin can be looked at in terms of the overall company, or in a more focused vacuum - such as analyzing the operating margin of a new clothing line or an experimental sales project. Continue reading...
What is an Accountant’s Opinion?
An Accountant’s Opinion, also called an Auditor’s Opinion, is a formal document signed by a certified accountant after a review of a company’s books. Companies may be required to have an audit from an independent and unbiased third-party accountant, perhaps annually before a report to shareholders or the submission of financial documents to regulatory bodies or lending institutions. At the conclusion of a review or audit, the auditor issues an Accountant’s Opinion (or Auditor’s Opinion) letter. The two outcomes that are most common: Qualified or Unqualified. Continue reading...
What are Federal Reserve Regulations?
The Fed has been commissioned with upholding the directive of the Federal Reserve Act. The Fed is technically an independent institution from the US Government, even though it works hand-in-hand with the Treasury Department on monetary policy issues. It functions partially as a self-regulatory organization for the banking industry, and the Regulations, which are named with letters of the alphabet, are meant to protect consumers, member banks, and the economy as a whole. The leadership of the Fed is comprised of both government appointees and private sector banking leaders. Continue reading...
What is a Callable Bond?
A callable bond, also known as a “redeemable bond,” is one where the issuer has the ability to pay off the debt prior to its maturity date, with certain conditions. Which the issuer has the right to redeem prior to its maturity date, under certain conditions. The primary reason that an issuer would choose to “call” a bond is that interest rates have declined since the bond was issued. By calling the bond, the issuer generally has to opportunity to refinance that debt at a lower rate. Once called, the issuer will notify the creditor and pay off the debt, typically with a slight premium added to close the deal. Continue reading...
What Are the Basics of Mutual Funds?
Mutual funds come in many varieties, but here are some basics to keep in mind to help you find your way. While most people have definitely heard the term mutual fund, many people do not understand how they work and how to use them. With over 10,000 mutual funds available in the marketplace today, the average person may have a hard time selecting appropriate mutual funds for his or her portfolio, determining a good asset mix, and understanding all of the charges associated with buying, owning, and selling mutual funds. Continue reading...