New answers tagged investing
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trading in the stock market using your brother's broker account(with his permission), is it illegal?
Most brokerages have a process to enact a "power of attorney" (POA) relationship, to allow a family member (siblings are specifically identified at this US FINRA page as a typical case) to make trades on behalf of the account owner.
So to the isolated title question: yes, it is legal and possible for a sibling to have a power of attorney granted by ...
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trading in the stock market using your brother's broker account(with his permission), is it illegal?
You absolutely cannot do this.
In almost all jurisdictions, you will bring severe money laundering problems.
Note that your brother would have to pay all tax.
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It certainly seems plausible to me - without spending too much time on the math, there's a few other details that may make it more believable:
The wife also brings in "six figures" that they "almost entirely save" - so there's another $100,000+ of income that you don't include.
The article doesn't say how much is owed on the properties. ...
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trading in the stock market using your brother's broker account(with his permission), is it illegal?
The rules that govern this are called Know Your Customers rules:
https://en.wikipedia.org/wiki/Know_your_customer
Depending on your location it might not be strictly illegal for you to do it, but be certain that your (well, your brother's) financial institution will have problems with it.
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The first consideration to keep in mind is that you are playing the stock market game against professional stock traders who have decades of experience and access to highly sophisticated computer systems which analyze the developments of millions of stocks in real-time. And even they don't always beat the market.
A regular person who picks stocks based on ...
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I've used a variant of this strategy when gambling on highly volatile instruments, e.g. bitcoin in 2017 or leveraged put options in 2020. What I've done is sell half of the position once the price doubles. That way I've recovered the initial investment and feel more free to wait to see what happens with the remaining money.
However, the strategy only makes ...
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In addition to the considerations others have mentioned, you also have to take inflation into account. Some annuities are fixed, some may be indexed to the CPI, but even those aren't necessarily indexed to medical inflation or housing inflation or some other expenses that may rise dramatically over your lifetime.
For an example, assume you are a man age 65 ...
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I recommend you watch the following video by a former Goldman Sachs trader, where he exposes how the big professional money profits at the expense of the retail trader.
My interpretation of what he says is that you need to invest based on your interpretation of the future, on things you believe will profit for fundamental reasons. You can then do the initial ...
1
You can use the time-weighted return method
a = 1025/1000
b = 1050/1025
c = 2050/(1050 + 1000)
d = 2075/2050
r = a b c d - 1 = 0.0628049
The return from Jan 1 to Feb 15 is 6.28049 %
That is 45 days, so annualising
(1 + r)^(365/45) - 1 = 0.638957
The annualised return is 63.8957 %
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There's nothing at all wrong with selling if you have made a profit. That's the whole point of investing, right? Your threshold for when your profit is high enough is relative to your own situation and investment style. You don't "realize" losses until you actually sell, and likewise you don't realize gains until you sell. While you own the stocks, ...
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It's okay to sell to sell your shares whenever you want or need to. I don't know what's going on in your life.
From a financial perspective, it's not advised that you reduce your position just because the value of it went up by an arbitrary amount. As Teepeem points out (reworded) - think of this as "I have $10,500 invested in Company A. I should do ...
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You have discovered one of the issues with investopedia. It isn't consistent.
There is also an article How Do Share Capital and Paid-Up Capital Differ? that contains this section (I have highlighted the important section):
Characteristics of Paid-Up Capital
Paid-up capital doesn't need to be repaid, which is a major benefit of
funding business operations in ...
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Another consideration when looking at the cost of annuities is how regular your income needs are.
In the UK, annuities are taxed as income. If your income needs tend to fluctuate over a year, you may find that you are getting an annuity income every month that you may not need in its entirety, but you will still get taxed on that income.
If you are just ...
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Ignoring the increased dealing costs of repeatedly selling small amounts of stock, this plan has a fundamental flaw.
Eventually, you will have 100% of your money invested in stocks which went down, not up, and which will probably never recover their original price.
If you think you are clever enough to pick stocks this way, you want to do the exact opposite ...
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It is definitely not the least costly if you are looking at it in terms of generating $X in income per month per $Y invested. The benefit of Annuities is that they are one of the least RISKY investments. Unless the company you bought them with defaults you get a guaranteed income stream even if we experience an extended bear market.
For that safety you ...
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If you need the income to last for life (of an individual or couple) but no longer, then an annuity is likely the best option. This is because an insurance company can diversify your longevity risk with that of other customers. Investments you make on your own would not be able to hedge your longevity (you're facing a sample of 1); you couldn't spend as if ...
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Problem is you never know when it will drop (and will miss out on the extra profit). You could use a trailing stop-loss order. In which you say (for example) a stock can drop a maximum of €1.20 below its maximum.
If the current price is €14.00 it well autosell at €12.80. If the price goes up to €14.30 first, then it will autosell at €13.10, etc.
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This feels like a variant of a sunk-cost fallacy. Don't consider the $10k at all in your investing; there's nothing you can do to get it back.
Instead, suppose someone gave you $10.5k worth of stock. Do you think that stock is the best use of $10.5k? Then hold it. Do you have something better to do with $10.5k? Then sell.
The only place where that ...
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There are two simple answers, one of which you provided:
Too often it drops back under $10k if you don’t sell, and if you sell all of it then you will miss future profits.
The other one is that it's your money so it's OK to do whatever you feel comfortable with.
I think that answers like' it sounds like you are trying to time the market' or 'sell when you ...
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It depends. As mentioned in another answer, it depends on what you do with the $500. Here, I expand on this concept with an example.
You own shares of a stock. It goes up 5% and you now feel the stock is expensive and has high exposure to a possible downturn. It may be wise to reallocate your portfolio by selling some (or possibly all) of the 5% gain in ...
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It is impossible to know the right answer to this question, specifically.
The best answer is that you should sell when you need the money.
For example, lets say you plan to buy a home in 5 years and choose to invest some of the money for the purchase. Perhaps year 1, you invest 100% in the market, year two 50% in the market, 50% in a savings account, and ...
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This sounds like "timing the market" and is not a viable long-term strategy. You buy when you think a stock will go up, and sell when you think it goes down, or when you want to diversify, or when you need cash and it's part of your liquidation strategy. You don't know if the stock will go up or down from here, so selling might be the right ...
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An issuer company with a business purpose of investing, and with more than 100 shareholders, is required to register as an investment company. But also, a company, with a business purpose other than investing, can avoid being classified as an investment company by having a portfolio that is 60% Treasury securities.
The company issuing its own shares under ...
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The energy and financial sectors have been a huge drag on the S&P 500, whereas tech stocks have done well, supposedly because they are less impacted by the pandemic or might even benefit from it.
Investors’ Love of Tech Drives Booming Market Rally (WSJ June 7th, 2020)
The faith investors have in fast-growing tech firms and historic stimulus measures by ...
1
Deep ITM options near expiration have very little time premium. They also tend to have very wide B/A spreads. Combine the two and you can have data distortion.
YUMC = $37.21
7/17 $27.50 call is $9.20 x $10.40
The intrinsic value of this $27.50 call is $9.81
Your data provider is using the midpoint of the quote for calculating implied volatility. In this ...
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I'm surprised that no one has recommended that you read "The Intelligent Investor" by Graham. That suggestion usually makes me laugh because it's not for noobs. Be that as it may, opinions on how to invest and what to invest in are as plentiful as the day is long and what suits one person may not suit another.
The simplest advice that I can ...
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ETFs provide the exact mechanism you're looking for, with different underlying mechanics (buying/selling units on an exchange rather than directly through the fund provider). But traditional mutual funds still have their place. They're perfectly fine for buy-and-hold investors, retirement accounts, pension funds, and other vehicles that don't need intra-day ...
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Open-end funds (aka mutual funds) are not traded on exchanges. Instead, the company that manages the mutual fund creates and redeems shares. All buyers and sellers go through that company. In theory, there could be a secondary market (exchange) for mutual fund shares, but this does not seem to happen.
Handling buyers and sellers puts a burden on fund ...
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Obviously a fund is already spread across multiple markets and companies.
Your fund might be distributed across markets and companies. Other funds might not be distributed at all. Fund X might not have an international component. Fund Y might be tech heavy. Fund Z might be emerging markets.
You decide how you want to diversify your investments and then you ...
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Warren Buffets Principle: Is the company simple and easy to understand: Is Berkshire such a company?
Berkshire certainly was a less complex company when Buffett bought it - just a simple textile company that he bought partially out of spite for a lowball offer of his shares. According to Wikipedia, he later claimed it was a poor decision from an investment standpoint (he would have made millions if he had bought other investments instead). His general ...
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As others explained, the expected change in value is rather small - maybe there simply was nobody that cared to trade an option that is so far out of the money.
Also, consider that many online platforms allow only .05 multiples for limits, If the perceived value really went from .42 to .38 $, both numbers would round to .40 for a large number of investors.
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Because your puts are so far out-of-the-money, they have negligible deltas and therefore the expected option price change is going to be near negligible with a drop like Friday's. Because that price change is going to be so small, it can disappear into the bid/ask spread, appearing unchanged or even moving in the opposite direction.
The delta of your SPY $...
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It is two slightly different ways of specifying how much you want to buy when placing a market order (i.e. one that is satisfied at whatever the current price is).
For simplicity, I'm assuming there's no commission or other costs associated with dealing.
Suppose you were interested in a stock that is currently priced at $30 (offer price), and you've got &...
3
It looks like the share price has hit the "Upper Circuit Limit", so trading is suspended for the day (or, possibly, there can be no sellers, only buyers).
The BSE page for Alok is currently (14:21 GMT, 26th June 2020) showing 18 notifications, the latest of which is "Touched Upper Circuit Rs. 48.20:
A circuit limit (upper or lower) is a limit ...
1
Why can't I use a higher discount rate for valuing investments that are more risky?
It doesn't say you can't, it just gives some drawbacks, and may not be as simple as adding an arbitrary risk premium. It's certainly common to use a discount rate from other investments of equivalent risk to calculate NPV. Determining "equivalent risk" may be ...
0
The discount rate is the your gain in a risk-free alternative. It is independent from the risk of your investment.
I would take the uncertainty in future cash-flow into account by creating multiple scenarios with multiple probability level, and calculate with the expected value.
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You get the dividends if you owned the shares on the ex-div date. Since you bought them before and sold them after, yes you should get the dividends.
Note that the price of your stock should have dropped roughly by the amount of the dividend (modulo any market fluctuations) on the ex-div date, so your dividend will just be making up for that loss in value.
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If you average purchase price goes up, that means that the price of the fund is going up, which means that the money that you already have invested will grow (and by more than your average price goes up).
For an example, let's say that the fund is at $100 and you have $10,000 invested (100 units) with an average purchase price of 90. Suppose it goes up 5% ...
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What you are doing here, is trying to time the market. You think at the ETF has reached it pick. But how can you be so sure about it? Nobody can tell the future for sure.
It's important, before you invest into a ETF, to have a plan and to know in what you are investing. With this your legs won't shake in bad times.
If you are unsure about your current ETF ...
1
I'm investigating about the 'Spanish Compliant Bonds', an investment product that is tax-friendly for Spanish tax residents.
[...]
"Spanish Compliant Bonds" aren't a thing. They're just selling you bonds promising you won't have tax issues surprises. When that document notes about modelo 720, that's the key information for you.
[...]
This ...
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It depends on what you're actually trying to measure. If you're trying to measure the performance of gold, then you could just look at the beginning and end prices of gold.
If you want to see how your decisions to buy and sell impacted your portfolio's return, then time-weighted return is a common (and easily calculable) measure. You basically take the ...
0
Forex is like trading two stocks against each other in a way.
Where stocks have a companies financial reports, forex has a
countries report. But stocks can also be affected by a countries economical health (Apple for example since it is a large part of the SP500 index)
There is a US Dollar Index (58% is EURUSD) which can be traded as "the USD".
...
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It means that insiders (directors, senior officers) have significantly divested in their Zoom shares. See on this website, which appears to aggregate filings to the SEC on insider trading and which shows significant insider selling activity in the past few months.
As for the stock being worth buying or not, that is your call. Insiders may have information we ...
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No on the retirement advisor. I don't know what the fee structure of Fidelity is, but with Wells Fargo Advisors, a managed account costs something like 1% per year. That's not 1% of the return, but 1% of everything under management (so depending on assets, you could be paying thousands per year in just fees). And you pay those fees even in a downturn, so the ...
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Based on historical data, you need to save around 30 to 35 times your annual expense and invest it appropriately to become financially independent. You can do this either by cutting your expenses or increasing your income. If you wanted to be extra safe, make this factor 40.
Historically, the equity premium has been 6%. That is, equities have yielded ...
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Share price doesn't always rise after a company beats its earnings estimates because there are other factors to be considered. A major one can be forward guidance. If lowered, share price will drop regardless of good quarterly earnings numbers. In addition, while the numbers may be better, the company's performance compared to competitors could be ...
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The only investors with stellar long term records use fundamental analysis (value investing) in their practice. To use FA means you can make accurate estimates of a companies value, and understand when estimates can't be made accurately.
If you don't understand how to value companies, you don't have enough skill to beat the market. If you do understand, ...
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Good answers above, the unfortunate truth is: you can't be certain.
Given the relative efficiency of equity markets, it's more likely that you were just lucky (after risk adjustment) by standard measures.
A general rule of thumb is: the more obscure your area, the more likely your success is due to skill.
Say you mainly trade on mid-cap commodity stocks ...
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This answer is with regard to a brokerage account assuming you have realized gains (not paper/unrealized gains). I suppose you still work in a regular job. Or do you not? If you do, you have a regular cash flow part of which you can use to pay taxes when you they become due. If you don't, it might not be a great idea to invest everything you have in the ...
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If personal federal taxes are estimated at 100% to 110% of the previous year and quarterly payments are made, then there is no tax penalty regardless of how much tax is actually owed.
Tax withholding is required from salary and quarterly tax payments are expected for investment income or gain.
Then the quarterly tax payments should make the budgeting more ...
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