Who Administers a 401(k)?
A 401(k) plan Administrator will usually be an officer of the Employer sponsoring the plan. A 401(k) plan document will specify who is the Administrator of the plan, but it is generally an executive or officer of the company sponsoring the plan. 401(k)s can be sold in packages that are essentially the same from employer to employer. When the design is well-established, and there are systems in place to enroll employees and maintain the plan, such as an employee website, a company’s CFO or human resources department chair may wear the Administrator hat. Some plans require a special administrator, and this may be a requirement of the broker-dealer acting as Custodian, especially if the plan has been designed from an open architecture, and there are many moving parts. Continue reading...
What Part of the Contribution into My IRA is Tax-Deductible?
Traditional IRAs can get interesting if you or a spouse is covered by a qualified plan at work. You are able to deduct all of your contributions into a Traditional IRA as long as you (or your spouse) are not a participant in an employer-sponsored retirement program. If either of you are, there are certain regulations you should be aware of. The amount of your contribution that can be tax-deductible is determined by your (and your spouse’s) modified adjustable gross income (MAGI). Continue reading...
What are the Withdrawal Rules for My SEP IRA?
SEP IRAs are subject to the same withdrawal rules as Traditional IRAs. SEP IRA contributions and earnings may be withdrawn at any time, but there are penalties that may apply, using the same rules as those applied to Traditional IRA withdrawals. If you are under the age of 59½, you must pay a 10% penalty fee in addition to income taxes on your withdrawal. Of course, there are certain exceptions to the penalties: first time home-buyers expenses up to $10,000, medical bills, educational expenses, and a few others. Continue reading...
What is the Profit Rate for the Ascending Triangle (Bullish) Pattern?
The Ascending Triangle pattern forms when the price of a security tests a resistance level and creates a horizontal top line (1, 3, 5), with an upward-sloping bottom line (2, 4) formed by a rising support level. The breakout can either be up or down, and it 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 security consolidates around a certain level, it may indicate growing investor confidence for a significant uptrend. Continue reading...
What is the Symmetrical Triangle Bottom (Bearish) Pattern?
The Symmetrical Triangle Bottom pattern forms when the price of a pair fails to retest a high or a low and ultimately forms two narrowing trend lines. Points 1 5 form the triangle patterns. The price is expected to move up or down past the triangle depending on which line is broken first. 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. However, there is a distinct possibility that market participants will either pour in or sell out, and the price can move up or down with big volumes (leading up to the breakout). Continue reading...
What is Liability?
As a general statement, a liability refers to some form of currency (money or service) that is owed from one party to another, typically in the form of debt or a balance outstanding. On a balance sheet, a company’s liabilities would include its loans, accounts payable, outstanding debt. Short-term liabilities are generally those owed within a year, whereas long-term liabilities might stretch beyond that. Continue reading...
What is a Dividend?
A dividend is an income-like payment to an investor who holds stock. Dividends tend to be paid by companies who are well established and are not retaining their earnings for capital projects. There are several kinds of dividends, but the most common is the cash dividend. You are not likely to see dividends paid by companies whose stocks are categorized as Growth stocks. Growing companies are going to be ploughing money back into their company for years. Well-established companies tend to distribute some of their profits as dividends because it allows them to retain loyal shareholders and keep the price of the stock fairly steady. Continue reading...
What is an Uptrend?
An uptrend is a continuous upward movement in a stock's price. An uptrend is an upward movement over a few increments of time (whatever time increment being used), where the successive numbers being compared continue to increase. The parameters being compared might be just peaks, just troughs, closing prices, or averages, but formally it is defined as increased in successive peaks and troughs both. Continue reading...
What is an Open-End Fund?
An open-end fund is a collective investment product where the issuer can redeem or issue shares at any time. Most mutual funds are open-end funds. Since the issuers can redeem or issue new shares at any time, they can meet the needs of investors very fluidly - buying back shares if an investor wishes to sell, or issuing new ones if demand rises. A manager also has the option to ‘close’ an open-end fund if they feel the fund 06has grown too large to allow new investors. Most mutual funds start out as open-end funds. 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...