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This is a great argument for low-cost index funds, in my opinion. The one thing you do know that probably won't change drastically is expense ratio. So figure out what type of assets you want to own and find a highly diversified index fund that holds them with the lowest expense ratio you can find (don't get carried away though; within a few basis points is ...


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The disclaimer has to be there by law. Just because a fund went up by 10% last year, it doesn't mean it will this year. It could even go down. Look at what's included in the fund. Is it the mix of investments you want your money in? Look at the charges, are they reasonable, when compared with others? Are there any weird features, such as a fund that's ...


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The requirement to include those words are because the government wants investors to see the warning. The past performance is included because the government wants to standardize how the performance data is presented. So how to you decide when the warning tells you to ignore past performance? That is why the general advice is that most investors can focus on ...


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I always see this disclaimer: "past performance does not indicate future performance" How am I supposed to evaluate a fund if the past performance of the fund is meaningless? "does not indicate" does not mean "meaningless". Thus, your fundamental premise is flawed. (The SEC-mandated disclaimer is so that brokerages don't get ...


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past performance does not indicate future performance Yes, obvious statement is obvious. Pretend for a moment that we applied this statement to Olympic gold medalists. The statement is not needed because if past performance guaranteed future performance then why hold the Olympics? why do fund companies bother to publish the past performance of their funds? ...


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Since the standard or baseline amount is 100.00 these bonds seem to be up for sale for 520 eur and 341.10 eur instead of 1000 eur. Is that assumption correct? No - bonds do not always sell for their par value. If the coupon rate of a bond is close to the yield that you get with other bonds of similar default risk, then the price will be close to par. This ...


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Why do I need to pay 1122.60 for the bond Becasue that's what someone holding this bond is willing to sell it for. Rather then looking at the coupon, you should look at the yield (which is strangely not shown for this bond). The Yield tells you what you are earning relative to the purchase price. The higher the purchase price, the lower the yield. In this ...


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The S&P Dow Jones Indices web site: https://www.spglobal.com/spdji/en/indices/equity/sp-500/ has details about additions/removes in the New Research section.


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To my knowledge, when trading over eToro you are not buying actual shares but CFDs (contract for difference, a derivative). This adds counterparty risk: if eToro (or another party actually selling the CFDs) defaults you will have to wait for liquidation and will only get a small fraction of your money back. In contrast, if you buy actual shares or fund units,...


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I have about 1-5K to invest as well as 100/month going forward. That is more than enough to get started. For perspective, my foray into investing started with me collecting cans for their 5 cent deposits. I would wake up early collect the cans in my town, turn them in and make between $8 or $10. When it got to be $250 I started investing. So what you ...


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Yield to maturity is a derived value based on price, and vice versa. In calculating calculating capital gain for tax purposes, your cost basis is 50 (50 cents on the dollar), your exit price is 80 (80 cents on the dollar) so your capital gain per dollar of face value is 30 cents. You can't "choose" a yield to maturity to use for your cost basis. If ...


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Financial products should be "used as directed," unless you are an experienced finance pro. It's best to take the warning on the TQQQ webpage seriously, and avoid the product for long-term investment: ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period ...


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The margin of safety can be calculated by computing an intrinsic value and comparing it to the current price. For example, if the intrinsic value was 100$ and the stock is trading at 80$ your margin of safety would be 20%. In practice, the difficult part is getting the intrinsic value right. No matter how you compute it, you will always rely on assumptions ...


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If the price of a put drops, it's due time decay and/or share price increase and/or contraction of implied volatility. When the price of a put drops dramatically in a very short period of time despite the underlying dropping significantly, it's due to a large decrease in implied volatility. Why did IV drop? Most likely there was a news release that was not ...


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500% is an extremely large IV, even for a weekly option (volatilities are always annualized). deep out-of-the-money and deep in-the-money options typically have higher volatilities than options close to the underlying, possibly (there are many theories) because changes in stock are not as normally distributed as the typical option model assumes, since large ...


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Aside from the time decay of the option, being a weekly, the only reason I can think that the premium would've dropped would be from the contracted IV. You're right that the losses from Vega probably exceeded the gains from Delta/Gamma But why is IV dropping? Has there been a significant event that's now in the past (see IV crush)? Other than ...


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You bought an option which will pay you money if your chosen company drops from $41 to $17 within the next 2 weeks. That is a massive, massive drop in value required, and you should understand how incredibly unlikely that is. Like, lightning striking-levels of improbability. I assume liquidity of your chosen option is sparse, and thus the value you see ...


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Your main advantage is diversification. As an individual investor it can be hard to just buy individual bonds. The bond market is targeted towards institutional investors with larger portfolios. Many have a minimum granularity that is impractical for the sums of the average Joe. And even if the bare minimum for a bond is within your means you might have ...


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I am considering investing the entire bond component in the individual bond A special risk-free savings bond with slightly higher yield than the bond ETF above (for the same duration as the bond ETF). A bond ETF typically has the following characteristics: Contains bonds from more than 1 issuer for diversification (except treasury). Sells holdings and ...


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(This answer is US-centric. I don't know about other countries' bond markets.) In other words, do bond funds have an inherent advantage over individual bonds within a periodically rebalanced portfolio that has a fixed bond allocation? Yes, I think so. I've looked at this problem too, and the problems (at least for someone at my scale) with buying ...


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This argument against active management is well known, for example, Warren Buffett's parable [PDF] about the "GotRocks" family. Institutions believe that they can beat the market using the Yale Model, investing in illiquid and/or private assets and by choosing the best asset managers. An overlooked, amusing, advantage of private assets is that they ...


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You should not be demanding, or expecting, any minimum rate of return from an investment. Products with a guaranteed return are annuities, and are not likely to offer decent rates to younger people. They're generally something for post-retirement folks, who want to guarantee an income for their life, even if it means lower returns than they might get ...


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A reasonable return is independent to the amount you invest. You can historically draw down 4% of a stock heavy passive portfolio, whatever the amount of said portfolio is, over long periods of time safely without going broke. Safety here is defined as a 95% chance of not going broke after 30 years. This is also known as the 4% rule used in many retirement ...


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It's hard to go wrong with the Bogleheads Three-Fund Portfolio. A three-fund portfolio is a portfolio which uses only basic asset classes — usually a domestic stock "total market" index fund, an international stock "total market" index fund and a bond "total market" index fund. It is often recommended for and by Bogleheads ...


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The size of your investment does not really matter for returns as most sound investments do not have minimum sizes. The return is the same, no matter whether you buy one share or a million of them (disregarding brokerage cost which are often capped). Meb Faber's booklet Global Asset Allocation investigated a number of portfolios and they were all returning ...


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