Who Offers Defined Benefit Plans?
Any employer can offer a Defined Benefit plan, but not many do anymore. Before the introduction of Defined Contribution Plans, most large corporations such as General Electric, General Motors, etc. offered only Defined Benefit Plans. Over the years, it has put a huge burden on these corporations to guarantee the performance of these plans. If the plan has not performed according to the assumptions, the company would have to contribute the difference, which would have to come from their profits. In order to shift the burden to the employees, most companies now offer Defined Contribution Plans (such as 401(k)s, etc.) instead of Defined Benefit Plans. Continue reading...
What is a 529 Plan?
529 plans are accounts designed to help families save for the future college expenses of young family members. A 529 Plan is designed to help you save money now to pay your child’s college expenses later. Investment companies who design a plan, which looks similar to a retail mutual fund account or IRA, will partner with state governments to offer the state’s official 529 plan. Families can invest in a 529 and gain access to an array of mutual funds. Continue reading...
What is Medicare Part D?
Part D is prescription drug coverage to supplement the coverage of Medicare Part A and Part B. It can be a standalone policy, or it can be included in a package with Part C. Medicare Part D is purchased through private insurers. While the premiums vary, they tend to range from $15- $150 a month. There was a maximum deductible of $360 for these plans in 2016, after which the insurer would trigger 75/25 coinsurance or something in that range. Continue reading...
Is Life Insurance a Good Investment?
As a rule of thumb, life insurance should not be considered an investment at all, since it’s primary purpose is to provide insurance coverage. That said, some cash value policies have attractive features that can be appealing in certain circumstances. We will say that a smart investor who has done research and gotten good advice will generally not end up with a permanent cash value life insurance policy. Continue reading...
How to use the Broadening Wedge Descending (Bullish) Pattern in trading
Once the price breaks out from the top pattern boundary, day traders and swing traders should trade with an UP trend. Consider buying a security or a call option at the upward breakout price level. To identify an exit, compute the target price for by adding the height of the pattern to the upward Breakout level. Pattern height is the difference between the highest high and the lowest low. The upward Breakout level is the highest high. Continue reading...
What are Earnings per Share (EPS)?
EPS is derived by taking the net income of a company and dividing it by the share price. That gives an individual investor an idea of how much growth was captured by their shares. Earnings per share is one of the main articles that is announced by the quarterly reports given by companies to their investors. Earnings per share does not mean that each share has appreciated a certain amount, but if the quarterly reports in earnings seasons stir up demand for the shares based on solid fundamentals at a company, it can result in a higher price per share. Continue reading...
What is the Rectangle Top (Bullish) Pattern?
The Rectangle Top pattern forms when the price of a security is stuck in a range bound motion. Two horizontal lines (top: 1, 3, 5) and (bottom: 2, 4) form the pattern as the security bounces up and down between support and resistance levels. Depending on who gives up first buyers or sellers the price can breakout in either direction. This pattern is commonly associated with directionless markets. Usually the pattern performs better when there is a strong uptrend leading into the formation. Continue reading...
What is the Short Interest Ratio?
The Short Interest Ratio (SIR) measures investor sentiment for a given company and is calculated using the number of shares being shorted divided by the average daily trading volume of the stock. Also called the short ratio or float short, the SIR is a ratio of the number of shares being shorted divided by the average daily trading volume for the stock over the last 30 days. The ratio can be interpreted as the number of days it takes short sellers to repurchase borrowed shares, or an approximation for the number of shares that have been sold short and not yet covered as a percentage of all trading volume. Continue reading...
What is Publication 504, Divorced and Separated individuals?
IRS Link to Publication — Found Here Divorce can be a hard thing on a personal level, and the tax returns can become more difficult to sort through as well. Publication 504 walks through the various choices available to those who are divorced or separated and who may need to adjust how their dependents are claimed, how property is divided up or sold, and who pays the taxes due at the time of divorce. Publication 504 gives detailed instructions concerning how to correctly report and file the proceeds of divorce. Continue reading...
What is Adjusted Book Value?
Adjusted Book Value takes true fair market value of all assets and liabilities into account. Adjusted Book Value tends to be used when a company has been devalued to the point of facing possible bankruptcy and liquidation. Book value in general does not account for intangible assets, such as intellectual property, so it is more useful in assessing the risk of loss in a foundering company than the earnings potential of a profitable company. Technically the adjustments to book value will raise or lower the value of assets and liabilities according to current fair market value. Continue reading...