Can I Start Collecting My Social Security Benefits If I’m Still Working?
Yes, you can start receiving social security benefits before you actually stop working, and your benefit amount will not be affected if you have attained normal retirement age, or NRA, which is determined based on the year of your birth. NRA is 67 for most people today. If you start to take benefits while working and before the normal retirement age, your benefit will be reduced. But there are a few caveats to consider if you start to receive the benefits before your normal retirement age. Continue reading...
What is an Investment Club?
An investment club can be a term used for a group that organizes itself for the purpose of pooling investment dollars and participating in the market, or for a group that meets for informational and educational purposes. Clubs that actually invest sometimes organize themselves as LLCs and establish a system for how to choose and manage their investments as a group. Even though “investment club” may sound like an informal and relatively unregulated way to invest with pooled assets, they are actually subject to regulation by the SEC. Continue reading...
What is bottom-up investing?
Bottom-up investing is the practice of looking for solid companies and investing in them as opposed to investing in indexes and basing that decision on broader market/macro conditions. In bottom-up investing, an investor or advisor takes the stance that the best investment portfolio will not be a broad allocation across market indices, but that an optimal portfolio should be built from the bottom-up with the stocks and bonds of individual companies whose fundamentals and individual potential have been analyzed. Continue reading...
What is an Investment Bank?
An investment bank is a financial institution that typically specializes in large, complex transactions, such as underwriting an Initial Public Offering (IPO), mergers and acquisitions, direct investment into start-up firms, or advising large institutional clients on investments/transactions. In short, investment banks help create the bridge between large enterprises and the investor. In that sense, IPOs are one way to accomplish this, but they also help businesses secure financing in other ways, such as through bond issues or derivative products. Continue reading...
What are Consumer Staples Stocks?
Consumer Staples are generally defined as companies that sell goods with inelastic demand, meaning that economic conditions generally don’t impact a consumer’s need for the product. They are also referred to as ‘non-cyclical,’ meaning that demand should not significantly waver even if the economy enters a recession. Because the earnings of consumer staples stocks is generally less volatile, they have historically outperformed other stocks during prolonged market downturns. Continue reading...
What is a Private Placement?
Investing in a private placement opportunity is done off-exchange, and usually involves a small number of investors who are either institutions or accredited private investors. There are many possibilities when it comes to the types of private placement investments that can be made, but the nature of the offering is that it is not public, it is made to a small number of institutional level or individual accredited investors (see Regulation D, Rule 505 and 506), and the offering is not registered with the SEC. Continue reading...
What should I look for in a good Mortgage Calculator?
Mortgage payment arrangements can be engineered in a number of ways, and a good mortgage calculator will give you enough flexibility to input the terms of your own. Ideally a mortgage calculator will be flexible enough to let you input the following: an adjustable rate, a rate cap, optional mortgage “acceleration” payments, balloon payments and resets, impound account calculations which take into account the property taxes and insurance you pay, as well as calculations which take any origination fees into account. Continue reading...
What is the Hindenburg omen and is there any merit to it?
The Hindenburg Omen is technical indicator meant to predict bear markets, sell-offs, and declines. It is named after the famous tragedy of the Hindenburg Zeppelin in Germany on May 6th, 1937. The “Omen” identifies several very complex technical patterns in the behavior of the NYSE, such as the number of new highs, new lows, and some other indicators. It claims to predict market crashes within a very short period of time (about 40 days). Continue reading...
How large are market fluctuations?
Fluctuations are represented in terms of volatility, and different types of investments experience different levels of volatility. The answer here depends on which market you’re talking about. Generally speaking, the capital markets in fixed instruments, such as government bonds, are the least volatile. Market fluctuations of the price of commodities, small-cap stocks, and emerging markets are the largest, and can be as high as 30-40% per year. Continue reading...
What is a Yield Curve?
A yield curve is an illustration of the current duration-to-yield relationship for bonds of the same credit rating but different durations. As a general rule, the longer the duration of the loan, the more risk you take on (since you don't know what might happen with that corporation in the future), and therefore, you demand a higher reward (i.e., higher coupon). The yield curve for any bond (not just the US Treasury Bonds) changes daily based on many economic and market factors. Continue reading...