How Do I Allocate My Assets in Retirement?
How you allocate your assets in retirement depends on your goals and objectives for the assets, and the amount of growth you need to reach them. Your asset allocation also depends on your age and risk tolerance, all of which need to be factored-in each year when allocating your portfolio. The very first step in deciding an asset allocation is to determine your total level of liquid assets, what your desired level of growth and/or income is over long stretches of time, and your tolerance for risk/volatility. Most investors need more growth over time than they think, and often times it results in investors under-allocating to stocks or other risk assets. Continue reading...
How do I Calculate my Expenses?
Keeping track of your expenses is one of the most important (and basic) steps to leading a responsible financial life. It might be tempting to “eyeball” your expenses and somehow get by without a plan, but in almost all cases, such carelessness will spell financial disaster. Budgeting your money for specific categories of expenses and carefully documenting the actual spending is critical. You should add up amounts spent on monthly mortgage and car payments, rent, groceries, clothing, entertainment, utilities, transportation, and other miscellaneous expenses, and try to get as close to possible to a monthly budget. Continue reading...
What Does M&A Mean?
M&A stands for Mergers and Acquisitions, and refers to the consolidation of companies or assets for strategic purposes. It does not necessarily have to imply that one company wholly takes over another — there are a number of different transactions that can fall under the M&A umbrella, which can include purchase of key assets or management acquisitions. In nearly all cases, however, there are two companies involved - the buyer of capital and the seller. Continue reading...
What is IRS Publication 463 on Travel, Entertainment, Gift, and Car Expenses?
IRS Link to Publication — Found Here Publication 463 discusses common business-related deductions such as travel, entertainment, gift, and vehicle expenses. The guide is meant to explain which expenses are deductible, how to report them, how to prove them, and what to do if you get reimbursed. Business expenses are commonly paid for out-of-pocket by employees and business owners, and many of them are unsure exactly which expenses are tax-deductible. Continue reading...
What is Consensus?
Consensus in investing is a measure of how in line investor beliefs are with one another. It describes strong trends in both trading and investor sentiment, often manifesting as bullish or bearish outlooks on a security or market. Bullish or bearish outlooks can be misleading, however. Opinions are not facts, and the noise of opinions from news sources and pundits can make opinions seem more factual than they are. Many investors require time to develop and form opinions, or form opinions for the wrong reasons, and can succumb to a herd mentality Continue reading...
What is Adjusted Gross Margin?
Adjusted Gross Margin accounts for the cost of maintaining inventory, which regular Gross Margin does not. Gross margin can be calculated offhand as the selling price of a good minus the price paid for the good (cost of goods sold). This is the simplest calculation for profit. The Adjusted Gross Margin takes into account the cost of maintaining an inventory as well, which is a step in the direction of accounting for the expenses of the business operation as a whole. Continue reading...
What Should I Do With a Lump-Sum Distribution From My Pension Plan?
We encourage you to be responsible and keep the future in mind. The first thing to keep in mind is that it’s very easy to spend a lump sum right away without thinking about the consequences. While the monthly payment option protects your money from overspending, a lump sum should be handled with frugality and practicality in mind. A large portion of this amount should be invested safely and wisely, particularly if you are very near to your own retirement age, and you do not have time to ride out market fluctuations. When investing, you should consider a conservative estimate of you and your spouse’s life expectancies weighed against your annual income needs, adjusted for rising healthcare costs. Continue reading...
What is Federal Reserve Credit?
The Federal Reserve extends credit in the form of short-term loans to member banks. Banks avoid taking loans from the Fed if they can, because it is viewed as a sign of instability. The Federal Discount Rate applies to loans taken from what is known as the discount window at the Fed, and it tends to be a higher rate than what is charged between two banks. The Federal Reserve will extend credit only to banking institutions that are members of the Federal Reserve system. Continue reading...
Should I pay for financial planning services?
Any professional that you work with for financial planning is going to be compensated for the work they do, but there are different ways they earn their pay. Whether it’s worth it to you is another question. If you have enough knowledge and time on your hands, and your investment portfolio is not very complicated, you may be able to manage it on your own. This can save you some money on financial advisor fees. Continue reading...
Day trading with RSI
The Relative Strength Index (RSI) is a momentum oscillator developed by Welles Wilder. In the RSI, the average gains and average losses over a specific time period (such as 14 days) are divided to calculate the Relative Strength, then normalized into the Relative Strength Index (RSI), which is range bound between 0 and 100. The RSI typically fluctuates between values of 70 and 30, with higher numbers indicating more momentum. According to this indicator, a security with an RSI over 70 (out of 100) can be considered overbought, while a security with an RSI under 30 (out of 100) can be considered oversold. Continue reading...