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From the category archives:
There are an infinite number of investing styles – read about some of the more common ones. Index/passive/couch potato investing Growth investing Value investing Bottoms up investing Top down investing Timing the market Chasing investment returns Technical stock analysis
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Taxes are an unfortunate aspect to investing. These articles will help you understand some of the tax issues with investing. What are capital gains and capital losses? How to calculate capital gains and losses Taxable and non-taxable investment accounts Tax brackets and marginal tax rates Prepare taxes by hand or use software
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One of the key steps to investing is deciding on your asset allocation. What is an asset allocation you ask? It’s the relative amounts of different asset classes in your portfolio which will determine how much risk your portfolio has. Asset classes An asset class is a grouping of similar investments whose prices tend to [...]
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A tax sheltered annuity (TSA) is a tax-deferred plan for employees of public schools. This means that contributors can allocate a portion of their gross wages each year to the tax-sheltered fund. TSAs or 403(b) plans are open to employees of tax-exempt organizations such as 1-12 public schools, colleges, universities, libraries, charities and churches. The [...]
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One of the age old debates about investment retirement accounts is whether it is better to have your money in an account where you contribute pre-tax money (ie 401k plan or Traditional Roth) or in post-tax accounts such as a Roth IRA. Unfortunately there is no one right answer so this post will cover some [...]
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Most of you are familiar with the 401K plan and the traditional IRA, but recent IRS changes have turned the spotlight on its lesser well-known cousin, the Roth IRA. Recently there have been changes to allow high income earners to convert to a Roth IRA in 2010. Before we figure out whether a Roth conversion [...]
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Technical analysis trading is when investors attempt to predict future price trends by relying on historic data. They use statistics that reflect investor behavior such as prices, volume, open interest, moving averages and other trading variables to make investment decisions. These data are plotted onto charts. This sort of investing is not suitable for beginning [...]
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This is a review of the popular tax preparation software TurboTax which is made by Intuit. There are a lot of different packages for this software – Free, Deluxe, Premier, Home & Business, Business. As well, some of those packages comes in an online version and a desktop version. We will be discussing the differences [...]
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Tax season is in full swing and as people begin to prepare their taxes some will receive a large tax refund, others will break just about even and still others will be left with a tax bill. Most experts would agree that it is best to break even. If you received a large refund or [...]
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Preparing your taxes on your own has never been easier. Tax filers have options today that were unavailable just a few short years ago. If you are in a position where do-it-yourself tax preparation is realistic then your first choice will be whether or not you will use tax preparation software such as TurboTax, H&R [...]
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This guest post is from PT of PT Money: Real Personal Finance for a Life Without Limits! Check out PT’s latest series of interviews about making extra money online using freelance writing, an online store, and more. PT is a pretty interesting guy with a blog that you should subscribe to. He also has a [...]
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This post was originally published on Consumerism Commentary Low cost passive investing is more in vogue than ever. With last year’s market meltdown affecting both managed mutual funds as well as their low-cost counterparts index funds and exchange traded funds – many investors are asking why they are paying extra money for managers who manage [...]
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Hedge funds are thinly regulated private investment funds for high net worth individuals and institutions. They tend to be extremely quantitative and highly leveraged in their investing approach, coming up with proprietary “black-box” models to determine their trades. Hedge funds became popular in the 1990s when their numbers doubled, but they had a spectacular run [...]
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Foreign exchange or forex rates determine what you get when you swap one currency for another. Tourists going abroad need foreign exchange, an import firm has to keep up with currency conversion rates to pay for purchases overseas, and multinationals need to keep tabs on multi-currency operations. Currencies are actively traded in the fast-paced and [...]
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Private equity is capital infused into a company without going through an issue of publicly traded stocks or bonds. The money comes from well funded investors – be they individual high-net worth investors or venture capital funds – who seek early entry into a promising start-up in need of seed capital or a young firm [...]
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Financial statements give a snapshot of a company’s operations and its financial health. A study of the four main statements – the balance sheet, income or earnings statement, the cash flow and statement of shareholder’s equity – reveals significant trends to figure out if a company is worth investing in. For the purpose of this [...]
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[Two common philosophies of stock investing are "value investing" and "growth investing" - value investing is covered in another post] Growth investing is a strategy by which an investor buys stocks that are forecast to grow at rates exceeding that of its peers or the overall stock market. Growth investors do so by identifying companies [...]
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This is my review of the awesome book for beginner investers called Investing Made Simple written by Mike Piper who is the author of the investing blog Oblivous Investor. I’ve highlighted both Mike’s blog and book before and I was quite happy to review the book for him. I think it’s a great resource for [...]
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If you read the business pages or investment in mutual funds you will often hear portfolio managers described as “bottoms up investors” or “top down” in their investment approach. Here is an explanation of “top down”. The investor using a top down investment approach looks at the big picture. Macro economic variables such as the [...]
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If you read the business pages or investment in mutual funds you will often hear portfolio managers described as “bottoms up” or “top down investing” in their investment approach. Here is an explanation of “bottoms up” (and no, it nothing to do with alcohol). In the bottom up investment approach, the details matter. An investor [...]
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Capital gains taxes In a previous post we discussed how a capital gain occurs when you sell an investment for a profit. All capital gains are taxable in the year that you sell your investment so you can’t normally “defer” the gain to a future year and you also don’t have to worry about any [...]
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If you sell an investment such as a stock or mutual fund in a taxable investment account, then you might have to pay capital gains taxes on any profit that you make. This does not apply to a tax-deferred retirement accounts such as 401(k) plan and Roth IRAs. If you make a profit on the [...]
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This is a more advanced post concerning buying and selling stocks and etfs. If you aren’t familiar with the subject then you might want to start with market orders and limit orders. If you ever have need to buy/sell individual stocks or exchange traded funds then you should be familiar with the different types of [...]
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If you are not familiar with stock indexes then please read this post which explains what they are first. What is a stock index? Stock indexes come in a variety of shapes and sizes. The most common types of stock indexes are market value-weighted (S&P500) and price-weighted indexes (Dow Jones). Some determining factors of various [...]
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If you are looking for a type of investment that will maintain your capital while getting a tax-exempt income flow, municipal bonds might be a possibility for you. Municipal bonds are debt obligations issued by smaller government entities such as cities or a local school board. Once you purchase a municipal bond, you’re lending money [...]
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[Two common philosophies of stock investing are "value investing" and "growth investing" - growth investing is covered in another post] Most investors consider value investing to mean buying cheap or discounted stocks, but there is more to this investing strategy. Value investing deals with the buying of stocks that have been neglected by the market [...]
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Welcome to the 81st Edition of Carnival of Money Hackers. Moolanomy.com was kind enough to let ABCs of Investing host this week so enjoy the posts and the pictures. Investing Photo Credit:Bob Merco Zachary Scheidt presents Stage is Set for IPO Rebound posted at ZachStocks. ABC presents REITs (Real Estate Investment Trusts) – Invest In [...]
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Real Estate Investment Trusts or REITs are a type of investment that invests in real estate (as the name suggests). These investments trade like stocks and exchange traded funds on stock exchanges but you can also buy mutual funds which invest primarily in REITs. Typically these investment funds invest in large commercial realty projects such [...]
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Usually when someone is talking about how well an investment has performed – they are usually talking about the actual percentage increase of the value of that investment over a certain period of time. For example if an investor bought a mutual fund at the beginning of the year for $100 per unit and sold [...]
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If you are not familiar with fixed income investments then click here for an introduction to fixed income investments. Fixed income investments are defined as securities that have a regular fixed return or payment associated with them such as bonds. Here are some risks to consider when investing in fixed income investments. Inflation – Because [...]
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Companies that are large with solid earnings increasing over time and long histories are considered to be “blue chip” in nature. The theory behind investing in such companies is that you will hopefully get regular stock price increases and/or dividend increases but there won’t be much risk. The term comes from casinos where the blue [...]
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This topic is little more advanced than usual for this blog so try to learn the main points and don’t worry about all the details. If you are not familiar with stock indexes then please read this post on stock market indexes first. Market Value-Weighted Index The most common type of index is called market [...]
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One of the benefits of index funds and exchange traded funds is that they allow you to easily purchase a low cost diversified investment product. Diversification is a key concept in investing so this is an important factor. For example if you want to buy a fund that contains only American companies then a S&P500 [...]
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Dividend stocks are any stocks that pay some form of dividend. However, most investors refer to companies that have a long history of paying out dividends and increasing those dividends over time as “dividend stocks” – Dividend aristocrats is another term used for these companies. Some examples of dividend stocks are Johnson and Johnson, Proctor [...]
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Debt reduction is a key part of financial planning because you don’t want to be making those loan payments for the rest of your life. However, what happens when you have your debts under controls or even…(gasp) completely eliminated? Then you have to start investing for your retirement. Foreign exchange trading is a risky trading [...]
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One of the biggest concerns for retirees is the fear of running out of money. How do you know how much of your investments you can withdraw every year without running out of money? How much money can I safely withdraw from my retirement funds? Simple – use the 4% rule. This will give you [...]
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Stocks trade for a wide variety of prices. Penny stocks trade for prices less than a dollar, which is what their name suggests. Some stocks buy and sell for very high prices such as shares of Berkshire Hathaway (BRK-A) which recently sold for $131,500! Most stocks trade between a couple of dollars and a few [...]
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Check out my introductory post on investment time horizons. Investment goals such as retirements are long (hopefully) term events. If you are 55 years old and are planning to retire in 5 years then you should have a portion of your investment portfolio set aside which will have a short term horizon and therefore will [...]
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One of the big sales points for index funds and etfs (exchange traded funds) is that they have low expense ratios (ie they cost less) compared to actively managed funds and therefore will perform better (at least that’s the theory). This is a very important concept for passive or index investing but it’s important to [...]
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One of the investment asset classes that gets a fair bit of press coverage is commodities. What are commodities you ask? Basically they are raw materials that are mined, grown and used in construction and manufacturing items like cars. The definition is any material or produce that is consistent in quality and type. It doesn’t [...]
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If you have your investments with a financial institution and you want to transfer it to another financial institution then you need to ask the new institution to transfer your investments from the old company to the new company. An example of this is moving from one online brokerage to another online brokerage that has [...]
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If you have your investments with a financial institution and you want to transfer it to another financial institution then you need to ask the new institution to transfer your investments from the old company to the new company. An example of this is moving from one online brokerage to another online brokerage that has [...]
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One of the key points to being a successful investor is to create an investment strategy (no matter how simple it might be) and stick to it. Your strategy could involve something complicated like trading options or something simple like putting $100 into an index fund every month. It can be difficult to stick to [...]
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I thought it would be nice to have a pleasant, non-investing-related theme today since normally this blog is all about investing – more specifically it’s a learn to invest blog for learning the basics of investing. If this is your first time here then feel free to poke around – all the articles are nice [...]
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Photo Credit mag3737 Check out the introductory post on dividends if you haven’t already done so. The term “dividend yield” or even just “yield” is commonly used when referring to the dividend of a stock or a stock index. The dividend yield is the percentage which you get by dividing the annual dividend payments (total [...]
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Online brokerages are companies that allow you to set up an investment account with them and buy and sell investments. The purpose of setting up one of these accounts is for someone who is a “do-it-yourself” investor and can buy investments without the help of an advisor. An investor can have an advisor and still [...]
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The traditional IRA investment account is a retirement savings account which is fairly similar to the 401(k) plan in that all contributions are tax-deductible. In other words, if you contribute money to a traditional IRA that you have already paid tax on, then the contribution will generate a tax rebate for you. Any earnings of [...]
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Inflation is a measure of average price changes of goods and services over a period of time expressed as a percentage. The statement “inflation was 3% last year” means that cost of living for the average person increased by 3% for that year. How is it measured? Inflation is usually measured using the [consumer price [...]
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The consumer price index is a measure of the average price of various goods and services consumed by households in America. It is intended to represent the spending by the average city-dwelling American on a typical basket of goods and services. The CPI is similar to a stock market index in that the actual number [...]
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If you want to buy an ETF (exchange traded fund) or a stock online, it is important to learn about market orders. Unlike mutual funds, ETFs change their price throughout the day so you have to “trade” ETFs and place an order which will get the best price available at that time. Market order This [...]
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