Make it 3 for 3. Yesterday I said the Fed might come out with an emergency cut after the stock market dropped below the previous low. Well they didn’t do exactly that but they pulled out something else. They are going to open their vault and let banks borrow against the mortgage backed bonds they […]
Want to Encourage Savings? Simplify the Tax Rules
It has been reported that the savings rate in the United States is negative. I’ve heard arguments saying it isn’t really negative but I think it’s fair to say that the savings rate is very low. Everybody wants to encourage people to save, which is great. We already have a hodgepodge of tax favored programs. […]
How $2,000 Became $20 And What To Do With It
In my foolhardy days, I bought WorldCom stock when it dropped from $60 a share to $4 a share. I thought it was a “buying opportunity.” When it dropped more from $4, I thought I had only a “paper loss.” You know the rest of the story. WorldCom went bankrupt. I lost $2,000. Later, some […]
Restricted Stock Units (RSU) Sales and Tax Reporting
RSU stands for Restricted Stock Units. It’s the new form of stock-based compensation that has gained popularity after the employers are required to expense employee stock options. The biggest difference between RSUs and employee stock options is that RSUs are taxed at the time of vesting while stock options are usually taxed at the time […]
Restricted Stock Units (RSU) Tax Withholding Choices
Ever since the companies are required to expense employee stock options, more companies started to grant the employees Restricted Stock Units (RSUs) instead of stock options. The first batch of RSUs I received will vest shortly. Unlike non-qualified stock options which are taxed at the time of option exercise, RSUs are taxed at the time […]
Financial Terms From the UK
I started listening to a podcast from Financial Times in the UK, The FT Money Show, because I’m interested in how people in other countries deal with their finances. I’ve heard the expression that “England and America are two countries separated by a common language.” It is true. Just from listening to two recent shows, […]
How Low Can It Go? Part 2
I’m sure you already know the stock market had a good drop since 2008 began. It’s time to update the table I did last August on the greater-than-10% stock market declines in the last 20 years. When I did the table last time, the market made a bottom on the same day. Let’s see if […]
Buy Now Or Buy Gradually Over Time?
A reader asked a question in the comments to my previous post Bought REITs Again. I’m answering it in a new post because the question is quite common. “If you were to set up a new IRA and pour some cash into it (200K), would you go ahead and dive right in or wait and […]
Bought REITs Again
After my FFCB bond was called in December, I’ve been mulling over what I should do with the proceeds. I decided to use the money for my 2008 IRA contribution and buy more REITs there. The Vanguard REIT ETF (VNQ) dropped 25% in the last 3 months, causing it to be the asset class which […]
How a Callable Bond Worked
The Federal Farm Credit Banks (FFCB) bond I bought in February finally got called. For more info about federal agency/GSE bonds, see my previous post Agency Bonds for Higher Yield Over Treasury. A callable bond means after a certain date, the bond issuer can redeem the bond early, before the bond’s stated maturity date. When […]
Unsure About Socially Responsible Investing (SRI)
I read this question in a recent issue of the Yoga Journal magazine: “I don’t want to support tobacco companies or environmental polluters, but my broker claims that socially responsible investing will cost me. How can I persuade my broker to make investments that align with my values?” The official answer from the magazine pointed […]
Subprime Correction Is Over, Really
It took a week after my pronouncement that the subprime induced stock market correction is over. Now it’s really over. The major indexes for both the U.S. and the international market, the Dow, S&P 500, MSCI EAFE, all went over their previous highs. I’d like to enter these notes for myself as lessons learned from […]