- How Are Restricted Stock Units (RSUs) Taxed?
Restricted Stock Units (RSUs) are a common form of equity compensation, granting employees shares that vest over time. In the U.S., RSUs are taxed as ordinary income when they vest, based on their fair market value at that time. This triggers federal, state, and payroll taxes and any subsequent gains or losses are taxed as… read more…
- Investing in Private REITs vs. Public REITs
Real estate investment trusts (REITs) are a popular choice for investors wanting to add real estate exposure to their portfolios without the hassle of owning physical properties. These entities pool money from investors to buy and manage real estate and then return a portion of the profits to their shareholders. However, it is important to… read more…
- What Is Stockholders Equity and How Is It Calculated?
Stockholders’ equity refers to the assets of a company that remain available to shareholders after all liabilities have been paid. This number can be positive or negative. Positive stockholder equity can indicate that a company is in good financial health, while negative equity may hint that the company is struggling or overextended with debt. Stockholders’… read more…
- How to Calculate the Net Present Value (NPV) on Investments
Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when choosing investments. In a nutshell, an investment’s NPV can help you to analyze its potential for profit. In business settings, it can also… read more…
- What Trailing 12 Months (TTM) Is Used For in Investing
Trailing 12 Months, or “TTM,” is a financial data format. It refers to a set of data that covers the past 12 months. Investors can use a TTM analysis for any metric they would like to analyze, from revenue to P/E ratios. It allows them to see how a company has performed over the past year… read more…
- The Most Important Benefits of Portfolio Diversification
Portfolio diversification is a commonly used investment strategy that involves spreading your money across various financial instruments, economic sectors and other categories to buffer against uncertainty and potential losses. With a well-diversified portfolio, the impact of a single underperforming investment might be softened by the performance of others. In simplest terms, diversification means not putting… read more…
- How Much Money You Need to Invest in REITs
Investing in real estate has long been seen as a traditional path to wealth, but it comes with its fair share of expenses and responsibilities, including maintenance and property management. However, real estate investment trusts (REITs) allow individuals to participate in the real estate market without the need to buy physical properties. REITs cater to… read more…
- How to Buy Gold With Your 401(k)
Investing in gold with a 401(k) involves using retirement savings to invest in gold-related assets, which may range from physical gold bars and coins to gold ETFs and mutual funds. It’s not as straightforward as buying stocks or bonds, but it can offer a valuable alternative to more well-known types of securities. Diversifying your portfolio… read more…
- Risks of Investing in Stocks and How to Avoid Them
Every financial investment carries risk. And while conventional wisdom says that you could earn a higher return by taking on more risk, veteran investors will tell you that learning how to manage that risk is the steadiest path to making a profit. Here’s a roundup of common types of risk that affect investments and how… read more…
- Everything to Know About Investing in Emerging Markets
As the world becomes more interconnected, investing internationally has turned into a favored avenue to diversify investment portfolios and seize the sunrise opportunities abroad. One region that has sparked investors’ interest globally is the emerging markets. This means investing in specific international markets that are in industrialization mode, which can lead to a lot of… read more…
- What Is Cumulative Preferred Stock?
Investing in dividend stocks is something you might consider if you’re interested in creating passive income. There are different ways that dividends can be paid out, depending on which type of stock you own. Cumulative preferred stock distributes accumulated dividends on a preset schedule, before any dividend payouts to common stock shareholders. If you own… read more…
- What Fully Diluted Shares Are and How to Calculate
Picture this: You are the contented holder of a particular company’s stock at $20 per share. You wake up the next morning to find your shares have decreased in value even though the company’s financials haven’t changed. What happened? The company diluted its shares, reducing your investment’s strength by introducing new stock for investors and… read more…
- Differences Between Active and Passive Mutual Funds
Mutual funds are available in two main variants: active and passive. Active funds are managed by professional portfolio managers who frequently buy and sell assets in an attempt to outperform the market or a specific benchmark index. Passive funds, commonly known as index funds, aim to replicate the performance of a specific market index. It’s… read more…
- What Are Tax-Free Municipal Bonds and Should You Invest?
Tax-free municipal bonds are not just a source of investment but also a significant contributor to public projects such as roads, schools and hospitals. These debt instruments are issued by local or state governments, attracting investors for their provide tax-advantaged income. The interest earned from these bonds is typically exempt from federal taxes and, potentially,… read more…
- How to Invest in Foreign Stocks
Investing in foreign stocks offers the opportunity to diversify your portfolio, tap into emerging markets and potentially reap higher returns. However, the journey is not without its challenges. Foreign stocks can be sensitive to currency fluctuations, potential political instability and market regulations. But armed with the right knowledge and strategies, you can navigate these challenges… read more…
- How to Choose an ETF for Your Portfolio
Exchange-traded funds (ETFs) have gained immense popularity among investors for their simplicity, diversification and low fees. Like individual stocks, ETFs are traded on stock exchanges. But unlike individual investments, ETFs provide investors with exposure to diversified portfolios without the need to buy assets individually. However, with a vast array of ETFs available, selecting the right… read more…
- Is Your 401(k) Socially Responsible?
Can your retirement savings make a difference in the world, other than ensuring a secure financial future? Many individuals today are steering their focus toward aligning investments with personal values. The environmental, social and governance (ESG) lens allows your investment strategies to magnify the impact on society. So, ask yourself, are your retirement savings making… read more…
- What to Do When Your 401(k) Loses Money
Investing in a 401(k) is chosen by many employees, offering a convenient and often successful method to save for retirement. While a 401(k) may often be a wise decision, it comes with risks, and understanding how to handle market fluctuations affecting your account value is crucial for long-term financial security. When your portfolio drops it… read more…
- What Is the Participation Rate in an Annuity?
The participation rate in an annuity refers to the percentage of the index’s return an insurance company credits to the annuity. If we consider the participation rate to be 80% and the index increases by 10%, the annuity gets credited with an 8% (80% of 10%) return. This is an important element to consider when… read more…
- Dollar Weighted vs. Time Weighted: Investments
Time-weighted and dollar-weighted returns are two common methods used to evaluate investment performance. A time-weighted return measures how an investment performed independently of cash flows—essentially answering, “How did the asset itself do over time?” A dollar-weighted return, by contrast, factors in the timing and size of contributions and withdrawals, showing how the investment performed for… read more…
- ESPP vs. ESOP: Investment Guide
In today’s dynamic job market, companies are constantly searching for innovative ways to attract, motivate and retain top talent. Two increasingly popular methods that bridge the gap between employees and corporate success are employee stock purchase plans (ESPPs) and employee stock ownership plans (ESOPs). These acronyms may sound similar, but they represent distinct strategies that… read more…
- Mutual Funds Converting to ETFs: How This Affects Your Retirement Portfolio
From time to time the markets will do something that seems both significant and inconsequential at the same time. Significant in that it is potentially very important, and to some investors it will matter quite a lot. Inconsequential in that, to most investors, the event likely won’t change their financial position or outcomes. This duality… read more…
- TIPS Bonds Offer Retirees Inflation Protection – Plus a Profit
Often overlooked by retail investors, TIPS, or Treasury Inflation-Protected Securities, are U.S. government-backed, fixed-income securities that offer inflation protection – and often more. After jumping 2% on all maturity lengths last month, TIPS yields are offering the best yields in more than 10 years. A financial advisor can help you pick the best savings and… read more…
- What Is a Naked Put in Options Trading?
A naked put is an options trading strategy where an investor sells a put option contract without owning the underlying security. It involves taking on the obligation to buy the underlying asset at a predetermined price, which is called the strike price, if the option is exercised by the option buyer. The term “naked” indicates… read more…
- What Is a Short Squeeze?
A short squeeze is a rapid increase in the price of a stock resulting from a lack of supply and an excess of demand. Typically, short sellers (those who have borrowed and sold stocks they believed would fall in value) scramble to buy them back as the prices start rising, contributing to further price hikes.… read more…