What is a Keogh plan?
Keogh plans are any type of qualified plan at a sole proprietorship or partnership. Keogh plans come in various forms, and this is because they are actually quite a broad category. IRS Publication 560 (found here) divides workplace retirement plans into SIMPLE IRAs, SEP IRAs, and Qualified Plans. This last category, Qualified Plans, includes profit-sharing plans, 401(k)s, 403(b)s, money purchase plans, and defined benefit plans such as pensions and salary continuation plans. Continue reading...
How Much Should I Withdraw from my Retirement Accounts Once I Retire?
A general rule-of-thumb is to withdraw no more than 4% of your retirement savings per year. Since your retirement money has to last you for the rest of your life (and in most cases, your spouse’s), it’s extremely important to carefully calculate how much you can withdraw each year without risking running out of money. Retirees should avoid withdrawing more than 4% of your total retirement assets in any given year, and that’s assuming that your assets are invested for growth over time (with some equity exposure). Continue reading...
What is the Home Market Effect?
The Home Market Effect is a term used in macroeconomic theory describing a concentration of an industry’s production facilities being concentrated in the larger national economies where its primary consumers exist. The home market effect (HME) is a theoretical term used in trade theory economics. The domestic economy in this case has an effect on the international prices and economy related to these goods. Continue reading...
What is Form 1040-X?
IRS Link to Form — Found Here Form 1040-X is the amendment form used to change previously submitted information from the 1040, 1040-A, or 1040-EZ tax filing form. The taxpayer has 3 years to file the 1040-X to make changes. The 1040-A and EZ are simpler versions of the 1040 which can be used by individuals who have relatively simple filings to do, and have modest household income. The 1040-X requires a line-by-line amendment request and explanation of why the changes are being requested. You will also need to attach supporting documents that provide more information about the changes being requested. Continue reading...
What is the Rising Pennant (Bullish) Pattern?
The Rising Pennant (or Bullish Pennant) pattern looks like a pennant with a mast. It forms when rising prices experience a consolidation period, and the price moves within a narrow range defined by the converging lines through points (2, 4) and (3, 5). After the consolidation, the previous trend resumes. This type of formation happens when anticipation of an uptrend is high, and when the price of a pair consolidates within a range. It indicates growing investor interest in a potentially explosive uptrend. Continue reading...
What is the Rectangle Bottom (Bullish) Pattern?
The Rectangle Bottom pattern forms when the price of a pair is stuck in a range bound motion. Two horizontal lines (1, 3, 5) and (2, 4) form the pattern as the pair 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 downtrend leading into the formation. Continue reading...
What is the Rectangle Bottom (Bearish) Pattern?
The Rectangle Bottom pattern forms when the price of a pair is stuck in a rangebound motion, bouncing between support and resistance levels. Two horizontal lines (1, 3, 5) and (2, 4) form the pattern. 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 downtrend leading into the formation. Continue reading...
What is an Equity REIT?
Equity REITs are the more traditional version of Real Estate Investment Trusts, which invest solely in income-producing properties and operate similar to a mutual fund. When investing in Real Estate Investment Trusts (REITs) investors have a choice between equity REITs, mortgage REITs, and hybrid REITs. Equity REITs invest in income-producing properties, and have a hand in building and renovating such properties. Continue reading...
What is a hedge fund?
Hedge funds are private investment groups that attract high net worth individuals (and in some cases institutions), and use investment strategies that may be riskier than would be suitable for the average investor. While the name "hedge" implies that the fund serves a defensive purpose, today’s hedge funds use wide array strategies, and more often than not the goal is total return. The strategies used are often speculative, contrarian, or alternative compared to most investment options in say mutual funds or traditional long-only asset managers. Continue reading...
What is alpha in investing?
Alpha is a risk ratio which measures gains or losses relative to a benchmark, indicating whether an investor is being compensated with a return greater than the volatility risk being taken. Alpha’s counterpart, the Beta figure, measures how closely an investment follows movements in the market as a whole or, when examining mutual funds, how similarly the funds move to their relevant indexes. Alpha is expressed as integers, which can be translated into percentage points above or below a benchmark for a time period. Investors are interested in higher Alpha figures: the larger the positive Alpha, the more the fund in question has outperformed its benchmark. An Alpha of 2 indicates a performance 2% greater than its benchmark; inversely, a -2 Alpha would denote 2% underperformance. Continue reading...