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Mutual fund companies are now required by the SEC to disclose how much of a stake, or the lack thereof, that fund managers have in their own funds. Unfortunately, the SEC only requires this information in the statement of additional information, which usually must be requested from the company or it can be found at http://www.sec.gov/edgar.shtml. Some fund companies are also providing this information in the fund's prospectus or on its website.
A study of 1,300 mutual funds based in the U.S. by the Georgia Institute of Technology and the London Business School found that funds in which the managers of the fund also invested in it appreciated an average of 8.7% in 2005, the year covered in the study, versus 6.2% appreciation for those funds where the managers had no money in their fund, which included more than half of all mutual funds in the study. It also found that fund performance increased .03% for every .01% increase in manager ownership, and that manager investments were highest for domestic stock funds and lowest for international bond funds, although this may just reflect the fact that interest rates were rising in 2005, which is usually not good for bond funds, since the price of bonds declines when interest rates rise.
Many fund companies are now stipulating that some of their managers' compensation must be invested in the funds they manage.
I recently read in the Wall Street Journal (June 3, 2006) about traders making money on the annual Russell Index reconstitutions, and was wondering how profitable that really is. Now that the list of additions has been published (Additions: Russell 3000® Index (Russell.com)), it is, evidently in some cases, very profitable! The following examples were picked randomly, and presented in the order that they were picked.
For instance, here's a 6 month chart of Amrep Corp. (AXR: Summary for AMREP CP NEW):
As you can see, Amrep went from about $25 in January to the latest quote of $59.75. That's about a 140% increase in about 6 months. Not bad. In fact, here's a comparison with the 3 major indexes—the DJIA, the S&P 500, and the Nasdaq—over the same time period:
Here's another: Lakes Entertainment (LACO: Summary for LAKES ENTERTNMT), which went from less than $7 at the start of the year to $11.80.
PeopleSupport, Inc, (PSPT: Summary for PEOPLESUPPORT INC) went from a little over $8 in January to a little over $14 recently, settling down to $13.75.
That's an increase of about 67% in 6 months. Not too shabby!
Here's one that lost during the time frame, I.D. Systems, Inc. (IDSY: Summary for ID SYSTEMS INC):
And here's the 6 month chart for Stratex Networks (STXN: Summary for STRATEX NTWKS INC), where the price peaked around late April and the beginning of May, and then declined almost to where it was 6 months ago:
Anadys Pharmaceuticals, Inc. (ANDS: Summary for ANADYS PHARMACEUTICA) is another that declined after peaking about late March:
As you can see, some of these stocks, peak around April, and then decline. This indicates that the active traders have bought by then, and then buying declines.
What stocks are added to the Russell indexes are based mostly on market capitalization, and the indexes are reconstituted every year. Because about $3.8 trillion worth of index mutual funds and exchange-traded funds are benchmarked against the Russell indexes, any new additions to the Russell index are bought by the fund managers to reflect the changes. Active traders anticipate this by looking for companies that are increasing in market capitalizations, and thus, are likely to be added to the index in June. One study, published in the Financial Analysts Journal, found that between 1990 and 2002, index funds tracking the Russell 2000 suffered 1.3% - 1.84% because of traders buying the stocks before the fund managers.
Of course, fund managers also try to determine what is going to be added to the index, because if they don't, they'll be buying the stocks at higher prices, which will hurt the fund performance. So, it is the combined buying by active traders and fund managers that drives up the stocks' prices before they are actually added to the index. No doubt some of the stock price declines results when the active traders sell for a profit.
Avoiding the wash-sale rule. The wash-sale tax rule prevents you from taking a tax deduction for a loss on a security if you buy that security, or one that is substantially similar, within 30 days, either before or after the sale, but you can buy another security in the same sector. This article says, about ETFs, that "Because of their unique structure -- representing a single value for an aggregate number of companies in the same market or sector -- ETFs can in many cases sidestep what the Internal Revenue Services defines as 'substantially similar.'" However, it doesn't really explain how the wash-sale rule is avoided. After all, an ETF is a security even if it does represent a group of stocks, so buying it back would be buying back the same security.
Maybe the wash sale rule can be avoided if you buy a different ETF that covers the same sector or industry. The IRS defines a substantially similar security as buying the same security, or buying a security that is convertible to the security, such as a call, or a convertible preferred stock or bond. So, a preferred stock is different from the common stock of the same company, but only if it cannot be converted to the common stock. So buying a different ETF that covers the same sector would seem to avoid the wash sale rule, because the ETF is not the same security as you had before, and it is not convertible to it. Ergo, in this scenario, it would seem, losses can be deducted on the sold ETF. For instance, you can probably sell a small growth ETF, then buy another one different from the one you just sold, and not be subject to the wash sale rule.
Definitely consult your tax advisor or attorney on this one.
Here's a good article about using low-rate offers from credit card companies to invest or spend. Most of the principles are obvious, but beware if there is no cap on the balance-transfer fee. Although most balance transfers in the past had a cap (example: 3% of balance or $50, whichever is less), more card issuers are eliminating the cap. Thus, transferring a balance of $10,000 at 3% with no cap will cost $300 just to transfer, compared to $50 with a balance transfer that has a $50 cap.
Microhouses, or minihouses, are small houses that range from a few hundred to a thousand square feet. More living space is achieved by using the vertical space more effectively, such as putting beds in lofts or putting a patio or deck on the roof, and using small appliances and furniture. Some of these houses, as small as 64 square feet, are added onto existing property for personal space, or specialized needs. I'm sure that a few wealthy people will buy one for their kids as good way to start teaching them how to manage a household.
Microhouses seem like a good idea for the more numerous single people today. Less cost, property taxes, maintenance, cheaper to heat and cool, cozier, don't have to walk too far to the bathroom, and more privacy than a condo unit or a co-op.
These are very risky mortgages. Real estate prices are declining, and will continue to decline for a few years, at least. It would probably be better to try to sell now while prices are still in the lower stratosphere. Risky mortgages like these, and others, such as interest-only mortgages and the new 50 year mortgages, is what led to the high home prices in the 1st place. This is a situation where refinancing, or selling the home for enough money to pay off the mortgage becomes impossible. When you overpay for something, you are sure to lose. I'll tell you a little secret. Buying high and selling low is NOT the path to great wealth!
Another day, another scandal. It seems that there are a few companies that are backdating option grants given to top executives, but not expensing them properly, forcing some of these companies to restate earnings. An option grant gives the holder the right to purchase company stock at a preset price, usually the price of the stock on the day of the grant. This is supposed to be motivation for top executives to increase the price of the stock during their employment. Before Sarbane-Oxley, a company had 45 days to report option grants given to employees; now it's 2 days, but the former period gave companies flexibility to backdate the options grant to that day when the stock price was lowest, thereby given executives option grants that were already in the money, and not properly expensed.
Erik Lie, a professor of finance at the University of Iowa, suggested that some companies were backdating their option grants when he noted that there was a surge in the company's stock price immediately after the grant date for those companies that did not promptly report the grants, but that there was no surge when the option grants were promptly reported.
The name quant comes from the root word of quantitative, which describes the primary method of quant funds used to generate profits: letting computers determine what stocks to buy and sell, and when, based on quantitative measures of desirable stock characteristics, such as price-to-earnings, price-to-book, price-to-sales, and other ratios. Computers are also programmed to look at fundamental values, risk potential, and momentum. Because computers—not managers—select the trades based on specific algorithms, emotion is not a factor, and expense ratios are typically less than 1%. Minimum investments are usually $2,500 or $3,000. Some examples of quant funds are the Schwab Core Equity (SWANX), and INTECH Risk-Managed Stock (JRMSX) funds.
Some hoteliers are selling some hotel rooms like one would sell a condominium—thus, the name: condo hotel. Some are being built brand new, and others are being converted from old hotels. They are generally located in expensive vacation destinations—for now, most of them are in Florida.
Condo hotels differ from times shares or fractional ownership in that the owner of the condo hotel doesn’t have to rent out the room, nor is there an obligation to use the hotel management, although if you are going to rent, what other cost-effective option is there?
Because the buyer is actually buying real estate, there are real estate taxes, insurance, and a condo association fee, and condo hotels generally cost twice what an equivalent residential condo would cost. There is no common method for allocating other expenses of a hotel, such as a bar, convention facilities, or shops.
Buyers don't have to rent out their rooms, but if they do, then they will be bound by the rental agreement. If the rooms are rented, then they will have to match others in the hotel. The owner will not generally be able to use it during peak occupancy times, although an owner probably wouldn't want to do this, anyway, since that will be the most profitable time to rent. Local ordinances may restrict the amount of time that an owner may occupy his room.
In a typical arrangement, the hotel operator takes 10% of the rental for operating the hotel and renting out the rooms, and cleaning, then the rest is split 50/50 between the condo-hotel owner and the hotel.
However, the problems are numerous. The hotel business is very volatile, so there may be large blocks of time when the rooms are not rented, especially during economic downturns. There is little real-estate market history to indicate how condo hotels will appreciate, and how much effort it will take to sell them. If the hotel itself runs into trouble, the owners of each of its rooms may be forced to bail it out.
Condo-hotels are not actually considered investments, because they probably won’t make money, but it is considered a means of owning some property in expensive locales with the rents helping to reduce the costs of ownership.
There is a new website specifically for both buyers and sellers of condo-hotels: NACHO—National Association of Condo Hotel Owners.
These funds, recently created as a new type, are being marketed as a way to earn what they are calling "absolute returns"—a marketing term, not a guarantee. The name probably stems from the fact that absolute numbers are always positive. Their goal is to produce positive returns every year, regardless of the financial markets, by using many of the techniques employed by hedge funds—investing in foreign currency and commodities in addition to buying stocks and bonds, and using options, swaps, arbitrage, and selling short, which are strategies for making money when the financial markets are declining. The drawback to this approach is that while these funds may do better in bear markets, and may, indeed, produce positive returns every year, they probably won't perform as well as other funds in a bull market because their use of opposing strategies diminishes their returns. To illustrate, the CSFB/Tremont Hedge Fund Index has continually risen since its inception in the early 90's, but it didn't do as well as the S&P 500 in the bull market of the late 90's, but it continued to rise even as the S&P declined substantially after March, 2000. Some example absolute-return funds: Rydex Absolute Return Strategies A (RYMQX) and Rydex Absolute Return Strategies H (RYMSX). Minimum investment is typically $25,000 or more.
| Federal Income Tax Burden by Income Group, 2003 | ||||||
|---|---|---|---|---|---|---|
| Income Group | Number of Returns | AGI ($ millions) | Income taxes paid ($ millions) | Group's share of total AGI (%) | Group's share of income taxes (%) | Average tax rate (%) |
| All taxpayers | 128,609,786 | 6,287,586 | 747,939 | 100 | 100 | 11.9 |
| Top 1% | 1,286,098 | 1,054,567 | 256,340 | 16.77 | 34.27 | 24.31 |
| Top 5% | 6,430,489 | 1,960,676 | 406,597 | 31.18 | 54.36 | 20.74 |
| Top 10% | 12,860,979 | 2,663,470 | 492,452 | 42.36 | 65.84 | 18.49 |
| Top 25% | 32,152,447 | 4,078,277 | 627,380 | 64.86 | 83.88 | 15.38 |
| Top 50% | 64,304,893 | 5,407,851 | 722,027 | 86.01 | 96.54 | 13.35 |
| Bottom 50% | 64,304,893 | 879,735 | 25,912 | 13.99 | 3.46 | 2.95 |
SOURCE: Internal Revenue Service, Individual Income Tax Returns with Positive Adjusted Gross Income (AGI), Tables 5 and 6; www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html. | ||||||
This site provides a quick, easy way to find out if you can get a mortgage, and what it will basically cost. There is on credit report inquiry (which would have a slight negative impact on your credit score), and they don't require your social security number. Proffered advantages include:
Home Steps is a Freddie Mac program that helps low- to moderate-income people can mortgages. Advantages include:
Homepath is Fannie Mae's equivalent to Freddie Mac's Home Steps program.
Credit Scores - This is my new, illustrated article on credit scores, and how to raise them.
The FICO® Score Estimator - Get a free estimate of your FICO credit score here by answering a few questions that will take less than 5 minutes. Your estimated score will have a low and a high estimated score with about a 50 point range.
Mortgage Fundamentals - A complete, but concise, tutorial about mortgages, with illustrative examples and real world data for better comprehension.
I would also add that it may pay to know just what the laws are in your state, which you can find out by going to the court house law library or on the Internet. For instance, in Pennsylvania, a state trooper using a radar gun must clock you going at least 6 miles over the posted limit to give you a ticket. If the police officer is not using a radar gun—and local cops are prohibited by state law to use radar guns—then you cannot be ticketed unless you are clocked going at least 10 miles over the limit.
"Carpools are incredibly simple to arrange. With carpoolconnect.com anyone wishing to find fellow commuters to carpool with can easily perform a search for someone in their area and contact them directly through the site. This is accomplished without compromising any ones security. All communication happens through carpoolconnect.com's messaging service."
The 50-year mortgage is a 5/1 hybrid indexed to the London Interbank Offered Rate (LIBOR)—the introductory interest rate lasts for 5 years, then is adjusted annually.
| Mortgage Table for a $535,470 loan— the median home sale price in California in February 2006! | |||
|---|---|---|---|
| Length of Loan | Payment Per Month | Total Interest | Total Payment |
| 5 yrs | |||
| 10 yrs | |||
| 15 yrs | |||
| 20 yrs | |||
| 25 yrs | |||
| 30 yrs | |||
| 35 yrs | |||
| 40 yrs | |||
| 45 yrs | |||
| 50 yrs | |||
As you can see from the above table (generated by my mortgage calculator), the total payments for a 50-year mortgage is more than 3 times what the home cost.
The 50-year mortgage, the interest-only mortgage, and the payment-option ARM are symptomatic of too many people willing to pay too high a price for real estate, or are going beyond their true means, which will, in many cases, lead to hardships and foreclosures. This is a clear indication that the real estate bubble is reaching its limits.
Of course, many people buy homes at these prices because they think they'll be able to flip it over within a short time for an even higher price. Good luck with that!
The name of the parent organization is Citizens for Fair Credit Card Terms, Inc. (CFCCT). Provides information primarily for U.S. consumers, but also includes information for Canada and the U.K.
Although there is a lot of information about credit cards at this site, it also profits from credit card advertisements and promotions, which may lower their objectivity. The educational articles are nicely formatted, but they are no more than introductions to the subject of the article.
Below are some other pages from this site:
This seems like a promising way to save money on buying real estate. Below are some extracted quotes with what I thought was the most important information.
RebateReps is a Nationwide Network of top Real Estate Agents. If you are buying any new construction or resale home, we can save you money by connecting you to one of our agents who will put their commission into your pocket.
RebateReps agents share their commission with you with the "two zeros" program. Just take the last two zeros off the price of the house, and that's your rebate! Example: If you buy a house for $200,000, you get $2,000 back as a rebate.When buying a resale home, the seller’s agent is known as the "listing agent". The listing agent charges the seller a fixed fee, (often 6% - so we'll use 6% as an example here). The seller pays this 6% fee whether or not you, the buyer, have an agent representing you. This means that when you do NOT have an agent, the listing agent keeps the entire 6% commission. The seller has no motivation to offer you a better price if you buy his house without a real estate agent, because he has to pay the same 6% commission to his listing agent either way! RebateReps lets you take advantage of this "loophole". When you use a RebateReps agent to represent you, the RebateReps agent gets paid part of the listing agent's commission, and then rebates part of it to you!
When buying a new construction home, the builder sets the price. If you buy a new construction home and have a RebateReps agent present, the builder must pay your agent a commission - even though you pay the same price for the home! The law stipulates that a builder can only pay a commission to a licensed real estate agent. Without an agent present, you pay the same price as you would have if you had arrived with a RebateReps agent. However, without an agent, you forfeit your opportunity to get a rebate.
The rebate is paid to you at closing, meaning you bring less of your own money to the closing table. There is never any charge nor any fees to you, the buyer. A traditional real estate agent might spend several months driving you around every weekend to look at new homes. That takes a lot of time, which is why the agent has to make a large commission on each transaction (which, by the way, the seller pays). But we figure that you'd prefer to start your home search on the Internet instead, right?Most companies have to deduct the cost of stock options in their reports this year, and this article discusses how this will lower the expected earnings of some companies, especially since many analysts haven't included options costs in their estimates.
The problem with larger corporations, and the source of many corporate scandals and much corruption, such as with Enron and WorldCom, is that the people who directly manage the corporation do not have a significant ownership in it. Even when they are compensated with stock options, or better yet, restricted stock, top-level executives can frequently profit more by fraud, which they can carry out because they have direct control of the corporation. Although the board of directors exists to represent shareholders' interests and to oversee management, this does not work as well as it should.
Below are 3 sites devoted to this issue:
"Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance", OECD April 1999.
"IRRC is the leading source of high quality, impartial information on corporate governance and social responsibility. Founded in 1972, IRRC provides proxy research and analysis, benchmarking products, as well as proxy voting services to more than 500 institutional investors, corporations, law firms, foundations, academics and other organizations. IRRC is unique in the industry as it does not advocate on any side of the issues it covers. Clients can be assured that IRRC data and analyses are objective and unbiased."
There is also a chat section at CarTalk.com where you can chat about your vehicle, or ones that you are interested in. However, this website has an extremely annoying car-honking-horn sound that repeats every minute or so, and it seems to be on every page. It's especially annoying if you are using a tabbed browser, and have multiple pages loaded in the background.
Below are some of the pages at Cars.com:
"The residual values are a percentage of the manufacturer's suggested retail price (including destination charge) and are provided by Automotive Lease Guide. These 2006-model-year vehicles are expected to hold the most of their original value within their vehicle class after three years. Find the residual value of any other 2006-model-year vehicle with our residual values tool."
"The Insurance Institute for Highway Safety does not test all cars. Like the National Highway Traffic Safety Administration, IIHS concentrates its crash tests on the highest-volume vehicles.
This table represents the 2006-model-year vehicles IIHS selected as top safety picks. The winning vehicles afford the best protection in front, side and rear crashes, based on IIHS tests."
This is a good site to find information about buying cars and trucks. For new vehicles, this site lists not only the Manufacturers Suggested Retail Price (often referred to as the MSRP, “sticker” or “list” price), but also the dealer invoice price, which is the price the dealer paid for the vehicle, and the transaction price, which is the price buyers are typically paying at new-car dealers. Kelley Blue Book (KBB) calls the transaction price the New Car Blue Book Value, and this will be very useful for haggling for the best price at the dealer. Another nice feature is that when you specify a specific model that you are looking for, including options, KBB will list available local dealers for that model in a sidebar. Check the dealers you would like to get a quote from, submit the form, and they will send you a quote. KBB lists the local dealers based on your zip code that you give it when accessing the site. It stores the information as a cookie so that when you go back, you don't have to input your zip code again, unless you turned off browser cookies. Detailed car descriptions also include what you may or may not like about the car.
The information on used cars is similar, but the relevant prices listed are the retail value, which is the price that a dealer would charge, the trade-in price, which is what a dealer would pay you for your car, and the private-party value, which is the value that you can expect to get or pay when dealing with anyone who is not a dealer. These prices, of course, depend on the condition of the vehicle, and KBB provides prices for various conditions.
For both new and used cars, you can research vehicles by make or model, or by category. Categories include sedan, coupe, convertible, wagon, hatchback, pickup, SUV, van/minivan, and luxury models.
You can list your vehicle for sale here. Your listing will be available at KBB.com and Cars.com, and over 175 other sites. The Basic Package cost $20 for 2 weeks, but includes only a manufacturer's photo. The $40 Enhanced Package includes free renewals until you sell your car and 3 photos of your vehicle, ad statistics and reporting, window sticker and bill of sale; and the $55 Premium Package additionally includes a money-back guarantee if you don't sell your car within 90 days, a free CARFAX report, and 12 photos of your vehicle.
The search engine for used vehicles allows you to search for vehicles of particular models, within a specified price range, and within so many miles of your zip code. The search results display the model year, the make of the vehicle, asking price, mileage, who the seller is, the category of the car, color, and how far the place of sale is from your zip code. Most of the sellers seem to be car dealers, but this is certainly a good way to find relevant cars in your area quickly.
This site also has buying tips, and other pertinent information, including finance and insurance quotes, reliability ratings, and resell value ratings. Includes pages listing cars that have the best resale value for the current year, and also the most researched vehicles on KBB.com.
Special features are the Auto Show Coverage, which provides information about new cars being displayed at auto shows, and there are special sections for motorcycles, personal watercraft, and snowmobiles.
This site allows you to check the record on a particular used vehicle by entering the Vehicle Identification Number (VIN) into its search engine. The information displayed includes the following:
You can get unlimited vehicle history reports for $24.99. This package also includes crash test results, reliability ratings, safety recalls, and operating cost estimates for each vehicle.
I just received an email advertisement from my bank today for rising rate CDs. Right now, my bank is paying 3.42% up to 4% ($50,000 to $99,999 investment required for top rates) for a 12-month CD. The interest rate will be adjusted once during the 12-month term if rates continue to rise.
But why buy a rising rate CD when you can buy 4-week T-Bills that are paying about 4.5%? With the Treasury's new website http://treasurydirect.gov, you can open an account on their website, and buy a 4-week T-Bill with money drawn directly from your checking account. When the T-Bill matures 4 weeks later, the money is directly deposited back into your checking account. How easy is that? Furthermore, 4-week T-Bills are auctioned every Tuesday, and issued 2 days later, on Thursday—that's when your checking account will actually be debited for the purchase. That means that while interest rates are rising, you can could be earning the latest high interest rate available. Note that although T-Bills are auctioned, as a small investor who isn't buying more than $5,000,000 worth of T-Bills, you will get an average of the auction price, which right now is about 4.5%. And since the government has recently just increased the debt ceiling to $9 trillion, Uncle Sam is going to continue to need your money. Furthermore, unlike most CDs, you don't have to tie up your money for a whole year. In fact, a good strategy would be to stagger your T-Bill purchases, buying some every week, which means that some will mature every week, so if you need the money, you won't have to wait too long. This is a good way to save the money for emergencies, like if you lose your job, for instance. In most cases, you won't need all of the money right way, so the serial maturation of T-Bills is an excellent way to receive income right when you need it.
Now for a few basic facts.
It is easy to open an account at http://treasurydirect.gov, and everything is explained there—including a very good flash presentation.
The U.S. government debt is, to a large extent, financed by foreigners, so you can help your country by buying T-Bills, so that the interest, which is paid by the taxpayer, goes back to the taxpayer.
So, what is the amount of interest generated by a $9,000,000,000,000 debt. Well, here's an approximation:
4.5% x $9,000,000,000,000 = $405,000,000,000!
That's almost one-half of a TRILLION DOLLARS EVERY YEAR! Just in interest! Imagine the goods and services the government can provide with that much money.
In the past, mostly wealthy individuals, institutions, and foreign governments bought U.S. Treasuries. Now the rest of us can buy them, too. The fact is, the government can greatly increase the amount bought by U.S. citizens, thereby returning that interest to the people that pay it. Because U.S. Treasuries are now book entries—everything is electronically stored and transacted—there is no need to require a minimum purchase of $1,000 or in multiples of $1,000. Even maturity terms and dates can become more flexible. This would allow many more people to invest in U.S. Treasuries, and thereby, not only keeping the money in the country, but helping to lower the interest rate that the government pays by increasing the potential pool of investors.
A new credit scoring system, called VantageScore, has been developed by the 3 major credit reporting agencies Equifax, Experian and TransUnion to provide a more consistent scoring system for creditors. Credit scores allow lenders to set standards and to quickly gauge the creditworthiness of potential borrowers by consolidating numerous factors into a single number.
Before, each credit reporting agency used their own system that gave differing scores not only because of different personal data about the individual, but because of differing methods used to compute the score, although the FICO score was widely used. There will still be some differences because each credit agency has slightly different data in their files on people, but the methods used to compute the score will now be the same for all 3 agencies.
The new credit score will have the following scale:
A - 901-990Although the new scores are immediately available to creditors, they won't be available to consumers until later this year.
Targeting a niche will help build knowledge in a particular area—what sells and at what price. You'll become better at writing descriptions that sell, and you'll develop a clientele that you can sell over and over again.
Sell something that you know well, and can obtain and sell for at least a 40% markup for a decent profit and to cover mistakes and expenses.
Avoid fads where demand can be erratic and unpredictable.
Don't stock up on anything until you know you can sell it at a reasonable profit, and be careful with electronic devices that can suddenly become obsolete or drop in price.
Look at eBay's 30 day archive of auctions to gauge possible success.
There are additional sections to this article on how to build inventory, create customer loyalty, and other basics for the business.
The Taxation of Mutual Fund Distributions, Sales, and Exchanges
Indeed Job Search Plugin for Google Desktop Sidebar
Get the latest jobs delivered to you as they are posted on thousands of job sites, newspapers, associations and company career pages!
Now you can graph job trends. Here's an example graph that shows the relative number of job listings containing the word blogger over the past year.
When a home is sold, up to $250,000 of capital gains can be sheltered from taxes, but if the homeowner claimed a home office deduction, that depreciation may have to be recaptured at sale, even if the capital gains is less than $250,000. However, because of a 2002 tax rule change, everything inside the home is not considered commercial property, and thus, the $250,000 capital gain exclusion applies, even if the owner took a home office deduction. However, this exclusion does not apply if the home office is a separate structure, such as a detached garage. When the residence is sold, the gains for the separate structure must be computed separately, and a capital gains tax must be paid on any appreciation. However, this can be avoided if another commercial property is bought within 190 days, a so-called 1031 exchange.
Finally, is it worth it to take a home office deduction on Schedule C or simply claim non-reimbursable business expenses on Schedule A? It is worth it if you are self-employed because the Schedule C deduction lowers the 15.3% Social Security and Medicare tax. However, for employees working at home, it may not make as much sense, since the homeowner is probably already deducting interest and property taxes on Schedule A, and can't deduct against Social Security and Medicare taxes.
To eliminate the high fees charged by the major job boards, such as Monster.com, CareerBuilder.com, and HotJobs.com, corporations are listing their new jobs at JobCentral.com. These listings have direct links to job applications on the companies' Web sites, where companies pay $12,500 a year to list all jobs ($25 a listing, which is much less than the $400 on a major board). The search engine searches job listings from other companies, as well, that are not members of JobCentral.
Indeed.com and SimplyHired.com, use search engine technology to aggregate job listings from classified ads, job boards, corporate sites, and trade associations.
4 major sites—JobCentral.com, Indeed.com, SimplyHired.com, and Google Base, are creating a centralized database of jobs at JobCentral.com.CareerXroads has found that job referrals from the Internet are increasing.
Also mentioned in this article are the risk of identity theft that job applicants take when posting their resume online, and the risk of spam from employment consultants looking to sell their services for up to $10,000.
Some websites mentioned:
This site helps you to find real estate agents in your zip code. You can see what houses they have sold recently, what price was asked for, what price did they get, and what opinion the home seller had of the real estate agent. You select the real estate agents. No forms to fill out, no unsolicited calls from agents, and no unwanted email.
This site obviously helps you sell your house yourself. There is a small fee that starts at $89.95, but they guarantee that you will sell your home at your price, or they will refund your money.
A good point to remember is that yields rise as the stock price falls, which is a good indicator that the yield will be unsustainable.
How would you like to make more than 100% interest compounded annually, virtually guaranteed, and with very little risk? This is not a misprint, and it is not a lure to sell you something. I have nothing to sell. When you learn about the present value of a dollar and the future value of a dollar, you can see things that might not be so obvious at first. Read on.
Texas, Pennsylvania, and New York have the highest rates, costing about $1,400 for $180,000. $1,100 is an average price across the country.
The title insurance industry pays about 4% of its collected premiums in claims, compared to a 75% payout for auto insurance. It is argued that a good deal of the premium is used for research to prevent later losses. But considering that much of this research is stored in online databases, how much can it cost, really? Even the premiums for boiler insurance, where part of the premium is spent for inspections and risk analysis, pays out 25%.
Most consumers get sucked in because they usually don't choose the title insurance company, but is chosen for them by the mortgage provider or the real estate agent. Naturally, the title insurance companies market heavily to them. Since they're not the actual purchasers, the price will usually not be an option.
Iowa is the only state that does not allow the sale of title insurance. Iowa has a state-run Title Guaranty Program that costs the home buyer just $385 for up to $500,000 of coverage—$110 for the coverage, $150 for an abstractor who does the research, and $125 for a review by a lawyer.
Home Buying Tip: Obviously, in other states, the best way to save money is for the home buyer to buy her own insurance, and to get prices well before closing.
I have uploaded 2 new articles about the time value of money and annuities, which is a powerful way to compare diverse investments, and other uses of money. The 1st is about the time value of a lump sum payment, usually expressed as the present value of a dollar, and the future value of a dollar.
The 2nd article is about annuities. Understanding annuities is crucial for understanding loans, and investments that require or yield periodic payments. For instance, how much of a mortgage can I afford if I can only pay $1,000 monthly? How much money will I have in my IRA account if I deposit $2,000 at the beginning of each year for 30 years, and earns an annual interest rate of 5%, but is compounded daily?
A very good introduction, and why you shouldn't buy a closed-end fund in its initial public offering: CEMF Orphans - CEF Primer. This reason can generally apply to any IPO of a derivative investment, where current investments of the same kind are usually selling at a discount to its underlying assets.
Here's a new article about the present value and future value of money, a fundamental concept used to compare investments or the use of money:
Present Value and Future Value of Money. Includes formulas and examples.
This article gives a good introduction to closed-end mutual funds, and offers some good tips on finding value in closed-end mutual funds, including the need to look at them with the same perspective as one would look at any mutual fund—management, performance history, volatility, and, of course, expenses. This article talks about finding value by looking at closed-end funds selling at the greatest discounts. One discussed metric used to analyze funds selling at a deep discount to their NAV is the discount-to-expenses ratio, dividing the percentage discount by the expense percentage:
| Closed-End Fund Discount-to-Expense Ratio Formula | |
| Discount % Expense % | = Discount-to-Expense Ratio (The greater the ratio, the better.) |
Let's take a real example. Here's a quote from the Closed-End Fund Association, a very useful site about closed-end funds:
| As of 12/22/2005 | As of 11/30/2005 | |||||||||
| Name | Symbol/ Exchange | NAV | Prior NAV | Mkt Price | Mkt Price High | Mkt Price Low | Premium Discount | YTD Mkt Return | YTD NAV Return | 1-Yr. NAV Return |
| Equus II | EQS NYSE | 12.27 | 12.27 | 9.00 | 9.1 | 9 | -26.65 | 21.14 | 17.98 | 21.54 |
With a market price of $9 and a NAV of $12.27, this fund is obviously selling at a discount. To find the discount, or premium if the market value is greater than the NAV:
| Discount | Premium Percentage Formula | |
| Market Price - NAV NAV | = Discount | Premium Ratio (Discounts < 0, Premium > 0.) |
| Discount | Premium Example | |
| $9 Market Price - $12.27 NAV $12.27 NAV | = -26.65% Discount |
Of course, you can see the discount in the quote above, but now you know how it is calculated. We can get more information about the fund from the same site by clicking this link, located below the quote: CLICK HERE for more information on this fund.
We find that the expense ratio is 3.83, rather high for any fund, let alone a closed-end fund, but this is just an example calculation. (The high expense ratio may be the reason why the fund has been selling at a deep discount for the past 10 years, with an average discount of 31.99% according to this site.) So now we plug in the numbers:
| Discount-to-Expense Ratio Example | |
| 26.65% 3.83% | = 6.96 |
Never buy a fund based only on this metric, but it is useful for comparing funds, especially funds specializing in a country or a sector. Generally, a fund with such a high expense ratio, even selling at a deep discount, is not a good investment, and as you can see the discount-to-expense ratio is rather low even with the big discount percentage. The aforementioned article suggests that this ratio should at least be greater than 10, but I believe that this number is more useful in comparing country or sector funds, since these funds may have unique expenses that don't allow easy comparisons with other types of mutual funds. If this fund had an expense ratio of 1%, its discount-to-expense ratio would be 26.65—a big difference.
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