Protect Your Retirement From The Government’s Whims

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I’m worried that government policies will undermine the value of my retirement savings. I’ve worked hard for this money and I’m counting on it to keep me comfortable during retirement. What can I do to avoid being robbed by Washington? — Joyce A.

“Robbed” is perhaps a little strong, but I understand your trepidation. For better or worse, government policies in any number of areas can clearly affect the value of your nest egg, not to mention your retirement prospects overall. Read more

Watch Out for These Retirement Gotchas

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Find out how to protect your retirement plan and savings against these hidden costs, important deadlines, and financial traps.

From high fees buried in hundreds of pages of fine print to important tax deadlines that sneak up on you, retirement planning is full of surprises for people who are unprepared. Make sure you’re aware of the potholes along the road to retirement so that you can navigate the process with fewer headaches. Here are some of the retirement planning traps to look out for and how to avoid them.
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How much do you really need for retirement?

coinTreeIt’s the age-old question: How much should I save for retirement?
For years, financial advisors recommended people save at least $1 million to enjoy a comfortable retirement. But given longer lifespans and concerns about the financial status of Social Security, is that target enough to fund a potentially decades-long retirement?

Maybe not. Read more

5 “BS” Retirement Investing Pitches You Should Ignore

coinTreeYou’re probably already wise to many schemes designed to separate you from your money—emails from Nigerian princes, phishing scams, etc. But does your BS detector go off when confronted with slick come-ones for perfectly legal-but-dubious investments? To see, check out these five pitches that are often targeted to people investing for retirement. Read more

Building a Balanced Portfolio

Building up a well balanced and diversified portfolio is a must for every investor. While the performance of the investments is of primary importance, a balanced investment strategy provides a safety net. In today’s volatile economy, every other month there is a crisis in one or the other sector. Tech stocks went down in the dotcom crash, the subprime mortgage crisis brings prices down in the real estate sector. Private equity funds are worried about impending changes to tax regulations on carried interest earnings for fund managers.

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Investment and Financial Planning Terms

APR (ANNUAL PERCENTAGE RATE)
The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the transaction.


ACCRUED INTEREST

The interest due on a bond since the last interest payment was made. The buyer of the bond pays the market price plus accrued interest.


ACQUISITION

The acquiring of control of one corporation by another. In “unfriendly” takeover attempts, the potential buying company may offer a price well above current market values, new securities and other inducements to stockholders. The management of the subject company might ask for a better price or try to join up with a third company.


AMERICAN STOCK EXCHANGE AMEX

The second largest stock exchange in the United States, located in the financial district of New York City. Formerly known as the Curb Exchange from its origin on a Manhattan street.


AMORTIZATION

Accounting for expenses or charges as applicable rather than as paid. includes such practices as depreciation, depletion, write-off of intangibles, prepaid expenses and deferred charges.


ANNUAL REPORT

The formal financial statement issued yearly by a corporation. The annual report shows assets, liabilities, revenues, expenses and earnings – how the company stood at the close of the business year, how it fared profit-wise during the year, as well as other information of interest to shareowners.


BOND

Basically an IOU or promissory note of a corporation, usually issued in multiples of $1,000 or $5,000, although $100 and $500 denominations are not unknown. A bond is evidence of a debt on which the issuing company usually promises to pay the bondholders a specified amount of interest for a specified length of time, and to repay the loan on the expiration date. In every case a bond represents debt – its holder is a creditor of the corporation and not a part owner, as is the shareholder


BROKER

An agent who handles the public’s orders to buy and sell securities, commodities or other property. A commission is charged for this service.


CAPITAL GAIN OR CAPITAL LOSS

Profit or loss from the sale of a capital asset. The capital gains provisions of the tax law are complicated. You should consult your tax advisor for specific information.


CAPITAL STOCK

All shares representing ownership of a business, including preferred and common.


DEPRECIATION

Normally, charges against earnings to write off the cost, less salvage value, of an asset over its estimated useful life. It is a bookkeeping entry and does not represent any cash outlay nor are any funds earmarked for the purpose.


DIVIDEND

The payment designated by the board of directors to be distributed pro rata among the shares outstanding. On preferred shares, it is generally a fixed amount. On common shares, the dividend varies with the fortunes of the company and the amount of cash on hand, and may be omitted if business is poor or the directors determine to withhold earnings to invest in plant and equipment. Sometimes a company will pay a dividend out of past earnings even if it is not currently operating at a profit.


EQUITY

The ownership interest of common and preferred stockholders in a company. Also refers to excess of value of securities over the debit balance in a margin account.


FIXED CHARGES

A company’s fixed expenses, such as bond interest, which it has agreed to pay whether or not earned, and which are deducted from income before earnings on equity capital are computed.


GENERAL MORTGAGE BOND

A bond that is secured by a blanket mortgage on the company’s property but may be outranked by one or more other mortgages.


GOVERNMENT BONDS

Obligations of the U.S. Government, regarded as the highest grade securities issues.


HOLDING COMPANY

A corporation that owns the securities of another, in most cases with voting control.


INDENTURE

A written agreement under which bonds and debentures are issued, setting forth maturity date, interest rate and other terms.


INDEPENDENT BROKER

Member on the floor of the NYSE who executes orders for other brokers having more business at that time than they can handle themselves, or for firms who do not have their exchange member on the floor.


INTEREST

Payments borrowers pay lenders for the use of their money. A corporation pays interest on its bonds to its bondholders.


KEOGH PLAN

Tax-advantaged personal retirement program that can be established by a self-employed individual.


LIABILITIES

All the claims against a corporation. Liabilities include accounts, wages and salaries payable; dividends declared payable; accrued taxes payable; and fixed or long-term liabilities, such as mortgage bonds, debentures and bank loans.


MONEY MARKET FUND

A mutual fund whose investments are in high-yield money market instruments such as federal securities, CDs and commercial paper. Its intent is to make such instruments, normally purchased in large denominations by institutions, available indirectly to individuals.


MORTGAGE BOND

A bond secured by a mortgage on a property. The value of the property may or may not equal the value of the bonds issued against it.


MUNICIPAL BOND

A bond issued by a state or a political subdivision, such as county, city, town or village. The term also designates bonds issued by state agencies and authorities. In general, interest paid on municipal bonds is exempt from federal income taxes and state and local taxes within the state of issue. However, interest may be subject to the alternative minimum tax AMT.


NYSE COMPOSITE INDEX

The composite index covering price movements of all common stocks listed on the New York Stock Exchange. It is based on the close of the market December 31, 1965, as 50 and is weighted according to the number of shares listed for each issue. The index is computed continuously and printed on the ticker tape. Point changes in the index are converted to dollars and cents so as to provide a meaningful measure of changes in the average price of listed stocks. The composite index is supplemented by separate indexes for four industry groups: industrial, transportation, utility and finance.


OFF-BOARD

This term may refer to transactions over-the-counter in unlisted securities or to transactions of listed shares that are not executed on a national securities exchange.


OFFER

The price at which a person is ready to sell. Opposed to bid, the price at which one is ready to buy.


PORTFOLIO

Holdings of securities by an individual or institution. A portfolio may contain bonds, preferred stocks, common stocks and other securities.


PREFERRED STOCK

A class of stock with a claim on the company’s earnings before payment may be made on the common stock and usually entitled to priority over common stock if the company liquidates. Usually entitled to dividends at a specified rate – when declared by the board of directors and before payment of a dividend on the common stock – depending upon the terms of the issue


PRIME RATE

The lowest interest rate charged by commercial banks to their most credit-worthy customers; other interest rates, such as personal, automobile, commercial and financing loans are often pegged to the prime.


PRINCIPAL

The person for whom a broker executes an order, or dealers buying or selling for their own accounts. The term “principal” may also refer to a person’s capital or to the face amount of a bond.


REAL ESTATE INVESTMENT TRUST (REIT)

An organization similar to an investment company in some respects but concentrating its holdings in real estate investments. The yield is generally liberal since REITs are required to distribute as much as 90% of their income.


SECURITIES INDUSTRY AUTOMATION CORPORATION (SIAC)

An independent organization established by the New York and American Stock Exchanges as a jointly owned subsidiary to provide automation, data processing, clearing and communications services.


SECURITIES INVESTOR PROTECTION CORPORATION (SIPC)

Provides funds for use, if necessary, to protect customers’ cash and securities that may be on deposit with a SIPC member firm in the event the firm fails and is liquidated under the provisions of the SIPC Act. SIPC is not a government agency. It is a non-profit membership corporation created, however, by an act of Congress.

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Make Sure Your Savings Outlast You

You don’t know how long you’ll need your retirement money to last or how much your investments will earn. Ideally, you’d like to be able to live off your investment earnings, so you’d better have plenty of savings. Most planners recommend that you expect to live 30 years in retirement.

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Investing: An Overview to Risk & Reward

There are many different ways to invest, and many different types of things to invest in. Some people choose stocks, bonds, or mutual funds, while others primarily invest real estate. A smart investor knows that portfolio diversification is key, and that caution and research are always the best approaches toward any type of investment, as well as advice from an expert financial planner. This article outlines some basic tips and guidelines to help you make smart investment decisions, but is in no way intended to substitute for advice from a financial professional.

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6 Common Investor Mistakes You Need To Avoid!

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Whether you are a self-directed investor or your investments are completely managed by a 3rd party, chances are good that you feel that some level of improvement can stand to be made with the current performance of your investments. We all typically seek the same general objective: maximize our returns while protecting ourselves from downside risk. However, it has become increasingly difficult for some people to reach this objective as we are flooded by more information and faced with more investment alternatives. Fortunately, many investing fundamentals have remained unchanged, but problems and mistakes occur when you don’t take these fundamentals into proper consideration.

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