A crash is more sudden than a stock market correction, which occurs when the market falls 10% from its 52-week high over days, weeks, or even months. Each of the bull markets in the last 40 years has had a correction (and often several). It’s a natural part of the market cycle that wise investors welcome. Such a pullback allows the market to consolidate before going toward higher highs....
While teaser loans do sometimes meet a need, it’s important to understand the complete package of what you’re choosing when you opt for a teaser loan before you decide it is right for you. Definition and Examples of Teaser Loan A teaser loan is a credit or loan product that begins with a better rate or fee structure for a certain period of time. The concept is that people will focus on this promotional period of low interest—adjustable-rate mortgages, for example—or free balance transfers on a credit card, and then either ignore or downplay the higher rates later on in the loan....
An American call option means buying the underlying shares at the strike price. An American put option means selling the underlying shares at the strike price. For example, you may buy one call option for stock XYZ with a strike price of $50 on January 1. The option expires on June 1. You can choose to exercise the option at any time between January 1 and June 1. Call options let you buy shares at the strike price, so if the price of XYZ rises above $50 at any point between January 1 and June 1, you have the option to exercise the contract, buy the shares below market value, and sell them for a profit....
Review information on what to expect when you’re asked to sign a contract, types of agreements that cover employees in the workplace, and the pros and cons of employment contracts. What Is an Employment Contract? An employment contract is an agreement that covers the working relationship between a company and an employee. It allows both parties to clearly understand their obligations and the terms of employment. More specifically, an employment contract can include: Salary or wages: Contracts will itemize the salary, wage, or commission that has been agreed upon....
For example, if you have collision car insurance and get into an accident with another driver, you’ll want to file a claim with your car insurance company to cover (or reimburse) the costs that stem from the accident so that you don’t have to pay out of pocket. How Does an Insurance Claim Work? Many factors dictate what your claims process will look like. It could involve mailing documents, calling a representative, using the company’s app, or a combination of these actions....
An IRA contribution generally starts with opening an IRA account with an eligible financial institution such as a brokerage or bank. You’ll probably have the option to manage your IRA yourself or allow the financial institution to manage your IRA. From there, you can make cash contributions to your IRA via bank transfers, check, or cash, in most cases. You can make contributions in one lump sum each year or spread them out....
Appraisal fraud can cause serious problems for both borrowers and lenders. It’s important to recognize the warning signs of appraisal fraud so you don’t get stuck in a bad financial situation. Definition and Example of Appraisal Fraud Appraisal fraud involves intentionally misstating the value of a home. This often happens when licensed appraisers purposely understate or overinflate a home’s worth. For example, an appraiser may be pressured by a lender to inflate a home’s value so the buyer’s lender can earn more in fees from a home sale....
The March 2020 passage of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act initiated an automatic administrative forbearance on federally owned student loans. So when can automatic forbearance kick in, and how can it affect your student loan repayment? What Is Automatic Student Loan Forbearance? General student loan forbearances are typically granted at the borrower’s request when they provide documented proof of their need for relief. The other type of forbearance is administrative....
With amortized loans, your payments will stay consistent over the life of the loan, but the interest you pay each month will gradually decrease. In the beginning, the majority of your loan payments will be applied toward interest, while at the end most of your payment will go toward the principal. So, because your interest rate payments change, calculating your cumulative interest on amortized loans is more complicated than just multiplying an interest rate payment by the number of payments you will make....
Discretionary income is less than both total income and disposable income because it’s income you can use at your discretion. Since everyone has to pay for certain essentials, such as food and housing, you have to subtract those costs to determine your individual discretionary income. How Does Discretionary Income Work? For most people, discretionary income matters because it’s the amount of money left in your budget that you can allocate toward spending and saving....
Learn how extended trading works and how investors can benefit from making trades outside of normal stock market hours. Definition and Examples of Extended Trading Extended trading is the activity of trading securities before or after official stock market hours. In the U.S., stock exchanges like the New York Stock Exchange (NYSE) and the NASDAQ have official trading hours of 9:30 a.m. to 4 p.m. ET, which are marked with the opening and closing bells....
kate_sept2004 / Getty Images RevenuesChanges in managementAreas of concern and competitionCurrent operationsFuture plans Financial statements, such as the income statement and balance sheet—which show you how much money a company made, its debt levels, and other important data—are the most important part of the Form 10-K filing. Together, they allow you to see what is going on with a company’s finances. The documents are free and can be downloaded online from a company’s website and public databases such as the SEC’s EDGAR....
Here’s what you need to know about impaired credit, including the downsides and possible solutions. Definition and Examples of Impaired Credit Impaired credit happens when there is a loss of creditworthiness in an individual or company. For consumers, impaired credit usually results in a lower credit score. Companies may see their credit ratings downgraded. Borrowers with impaired credit have less access to financial products and pay higher interest rates on loans....
An estate can owe an estate tax, an income tax, or both. IRS Form 1041 reports only income earned by an estate from the time of the decedent’s death until the estate closes. That income can be offset by deductions and capital losses. Income received before the decedent’s date of death is reported on the decedent’s final tax return—a separate document that must also be filed by the estate’s executor....
This means that $10,000 invested at 24% for the period would have turned into just over $1 million. A fund based on the S&P 500 index for the same period would have turned that $10,000 into just under $75,000. Others who ran their own experiments were not able to duplicate Greenblatt’s high returns but still yielded positive results. As a result, investing experts agree that the strategy of magic formula investing outperforms the indexes....
The larger your margin of safety, the more room you have to be wrong. If you believe a stock’s intrinsic value is $50, but you’re able to buy it for $30, your prediction can be off by 40% before you’d lose money. But if that same stock is priced at $48, you can only afford to be 4% wrong—which could happen due to errors in judgment, miscalculations, stock market volatility, and countless other unknown factors....
Refinancing follows a similar process to obtaining your original mortgage, since you may encounter many of the same procedures, and the same types of costs, the second time around. How Refinancing Works The steps you must take to refinance a mortgage are similar to those you took to get your current loan. Determine the Loan Features You Want It’s important to establish the specific interest rate or term length you want in advance, whether your aim is to secure a lower rate, to switch to a fixed interest rate, or to extend your loan term....
Alternate names: sharing economy, access economy, freelance economy Typically in the gig economy, freelancers and independent contractors get individual gigs using an online platform or mobile app to connect with businesses and customers. Companies like Airbnb, TaskRabbit, Uber, Lyft, PostMates, DoorDash, and Instacart have relied and thrived on this process, giving significant rise to the gig economy over the past decade. In fact, a 2020 study from the ADP Research Institute found that gig work in the U....
How the HAFA Short Sale Program Worked The first step was for a borrower to apply to the Home Affordable Modification Program (HAMP), which has also ceased accepting applications. The federal government offered the Home Affordable Refinance Program (HARP) as a mortgage refinance option through the end of 2018. These were the rules to be eligible for the now-defunct HAMP program: Only personal residences are eligible. The mortgage amount must be less than $729,750....
As the world’s second-largest stock exchange based on market capitalization, the Nasdaq trades listed stocks as well as over-the-counter (OTC) stocks. Stock ticker symbols on the Nasdaq generally have four or five letters. A history of the Nasdaq shows a track record of groundbreaking accomplishments. In addition to being the first exchange to offer electronic trading, it was the first to launch a website, store records in the cloud, and sell its technology to other exchanges....
