What are My SIMPLE IRA Investment Options?
SIMPLE IRAs will have various kinds of investment options, depending on the trustee company that holds the plan assets. SIMPLE IRA investments are determined by the financial institution at which your SIMPLE IRA is established. When opening a SIMPLE IRA, be sure to check what investment options the financial institution offers as well as the fee structure. Standard ERISA rules apply, meaning that all employees must be offered the same thing. SIMPLE IRAs can only be held at trustee companies whose business model is on the IRS’s list of approved SIMPLE Trustees. Continue reading...
What Happens If I Withdraw Money From my Cash-Balance Plan After I Retire?
You may not be able to make non-recurring withdrawals of various amounts from a Cash Balance plan. After you retire, you’ll typically have two options: a fixed monthly payment for the rest of your life, or a lump-sum payment. Cash balance plans generally do not allow random, non-recurring withdrawals because the individual account was always a hypothetical account. The administrative work of fetching various sums for everyone and keeping up with the total pool of plan assets is not the administrator’s prerogative with these plans. Continue reading...
What is IRS Publication 529 on Miscellaneous Deductions?
IRS Link to Publication — Found Here Publication 529 describes the possible deductions which can be taken in an itemized way on an individual’s tax return. Miscellaneous deductions can be filed using Schedule A of Form 1040. Someone should only take the time to fill out this form if they believe their total deductions will exceed the standard deduction amount, which is nearly $13,000 for a married couple filing jointly. Continue reading...
What is the Rectangle Top (Bearish) Pattern?
The Rectangle Top pattern forms when the price of a security is stuck in a rangebound motion, and it bounces between support and resistance levels. Two horizontal lines are formed (top: 1, 3, 5) and (bottom: 2, 4) as a result. 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 are the main Accounting Methods?
There are two main kinds of accounting methods: accrual accounting and cash accounting. Depending on who is speaking, accounting “methods” may also extend to the GAAP vs pro-forma distinction. For the most part, accounting methods can be defined based on the year in which the revenues and expenses are put on the books. In cash accounting, only the revenues and expenses which are collected and paid in the current year or period are documented. Continue reading...
What is currency substitution?
Currency Substitution can be an official or ad hoc occurrence in a country whose commerce is partially, or fully, conducted using the currency of another country. Some currencies which are pegged to another currency at a fixed rate (especially at whole integers) are domestically exchanged in the same manner that the local currency is. Many countries have completely adopted the currency of another country, and do not have a central bank of their own. Continue reading...
What is a credit default swap?
A Credit Default Swap is a contract that provides a hedge against credit default risk. To guarantee against the non-payment of a loan, a Credit Default Swap can be purchased for a premium. The seller of the swap bears the risk of payment if a bond issuer defaults, or if there is a similarly threatening “credit event” which is agreed upon in the terms of the swap contract. Generally, the buyer of a credit default swap will pay quarterly premiums for the protection, and the annualized premium is called the "spread," which may be a set percentage of the notional amount. Continue reading...
What is naked shorting?
In a regular short sale transaction, the seller would locate and borrow the security being sold before the sale. Naked shorting means that the seller has not located or secured the security being short sold, and is in many cases illegal. Naked shorting is illegal because it accompanies an extreme likelihood that the security sold short will be FTD (Fail to Deliver) within the settlement period. Naked shorting is selling something that you do not have, without confirming that you can get the security to deliver, or even that the security exists. Naked short selling has a long history. Continue reading...
What is a Good Financial Advisor?
A good financial advisor should care as much about your investments as you do, and be personable and knowledgeable enough to make the relationship worth your time, money, and trust. Choosing a Financial Advisor is a bit like choosing a caretaker for your child: you would want someone who gives you a sense of security, who has professional references or the recommendation of a trusted friend, years of experience, is reliable and honest, can foster growth, and ideally, will care about your child almost as much as you do. Continue reading...
What is the Elliott Wave Theory?
Elliot Wave Theory incorporates the natural cycles of nature and waves with market movements in an attempt to explain and predict the historical and future prices of stocks. Penned by Ralph Elliott in the early 20th century, the Elliott Wave Theory attempts to organize the seemingly random behavior of the market into cycles. The theory visualizes a series of waves cycles, each representing a different length of time or magnitude of a trend or cycle. Continue reading...