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Archive for the ‘Financial Terms’ Category

Spreads, ratings, BTP-Bund, CDS. Every day we are deluged by reports that contain terms which often do not know the true underlying meaning.

The tension in financial markets is getting more tense and the news they try to interpret the situation through the use of technical terms that are not always clear. We try to give an explanation in these columns.

SPREAD – It ‘a measure of default risk associated with a government bond and, consequently, the financial health of a country. Technically and ‘the gap, estimated from the market, including the performance of that title and the yield of a security correspondent for a state considered to be devoid of risk, such as Germany. The spread between the BTP and the ten-year German Bunds to 10 years has reached levels record-breaking. It ‘a record of the euro and indicates an increase in the cost for Italy
finance markets. New peaks have reached even the spread of Portugal and Ireland, but also France and ‘at the highest level since March 2009.
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When the new tax on financial income will be introduced, to be penalized are especially risky financial instruments and long-term bonds.

The shift from 12.50% to 20% tax will have limited effects on the portfolios of clients who have invested in bonds.

The reform of the taxation of financial income scares investors in government securities and bonds, fearing further scissor kick to the returns received. In reality the tax will have disastrous effects if the securities in the portfolio have an expiry date not too long, as I suggest in the strategy explained in ‘ ebook a perfect investment .

To understand the effects of taxation on financial assets necessary to make an introduction and understanding, in short, as ‘form’ the price of a stock or bond. Since the strictly financial point of view a title is nothing but a series of payments spread over the coming years, given a required rate of return equal to r from the market, the price of a financial instrument is simply the present value of its future payments ( interest or dividends and redemption value).
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advisers think a lot when it comes time to start their own business: compliance costs, rent, computer equipment, etc.. The name they give to their firm is often the last thing that comes to mind.

Choose a name that is not catchy or credible for customers involves high risks, “says Sara Gilbert, founder of the Montreal firm Strategist, especially if you must then change it:” It will affect your business, especially in financial services where stability is so important. ”

Here are seven mistakes to avoid when giving a name to a firm:

• Think short term: we must create a name that will be suitable for the business now, but also appropriate in ten years. Several advisers give their own name for their business, “said Sara Gilbert, but use the names of the founders can create problems if one partner leaves or retires.

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The typical case is that you get your paycheck. After recovering from the shock of what is left after taxes, will proceed to divvy it among all your outstanding bills with the intention of putting more of what remains in your savings.

However, it never seems to be nothing more than the left and their savings grow.

A better plan would be to pay yourself first. Do not let the money in their hands.
You may find that in fact their economies begin to grow much faster this way.

If you work for an employer with a 401K plan, the first thing you should do is fund the max. If you can not afford that, at least make enough to get the full matching contribution from your employer.

This investment is made before taxes. Your investment is larger and the contribution of employers is growing rapidly.
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With the “stress test” that will be done again to the banks, decided to have a meeting with the bank manager with whom I work, because there was money in my account, caused by movements that did not understand. We started a friendly conversation, but without content, because my partner had not heard about the “stress test” that would back the European banks, and not perceived as banks could be wrong. After all, it was a bank manager and as long as he could find, thought his bank account had a positive outcome.

At this point, I had a good opportunity for the subject of my visit. Shown the movements of the account (several positions), the director began to justify the unjustifiable. First I was surprised, then hurt me: the strangers had initial charges originating in a bank guarantee of 40,000 euros, which cost me, in several installments 1,400 euros . I admit I have seen in this way the operation to be considered normal – at the end of a bank guarantee has to be a given cost. However, to gain access to this bank guarantee, I was also forced by the bank to make another guarantee of the same value: 40,000 Euros which would be deposited in the bank.
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During tax season, the counselor is the best person to detect potential problems and guide the client to a tax specialist. Finance and Investment has prepared a checklist to avoid forgetting.

The counselor should inquire about any particular change of the marital status of the client, the birth of a handicapped child, the sale of a residence whether occupied or not daily, a move to be closer to his workplace or purchase of shares.

These situations complicate the tax returns and increase the risk of errors. In addition, the client is perhaps not necessarily aware of the strategies it could adopt to improve their situation.
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The IFA (Wealth Management Advisor Independent) are financial professionals a new genre that help investors maximize their assets according to the needs expressed.

Its scope covers many fields: insurance broker, realtor, financial advisor investment etc.. It is therefore an independent financial and general working for their own account and select the financial products that are tailored to the client and not something else.

The main originality of contracts issued by the IFA is in the range of financial support they offer: diversified funds, performance …
The offer of IFAs also stands by enclosures tax and insurance products that are specific to subscribe.
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This month also has us taking a look at money and the second greatest invention, credit. Although money was invented by the kingdom of Lydia who started minting coins around 650 B.C., it was the Greeks who invented the notion of bankers and the profitability of credit.

The appearance of money changed everything in the ancient world. It’s creation allowed people to make transaction much larger than previously by allowing the calculation of some unit of value. Money became the standard for exchange and worth. It also allows an economy to grow at a much more rapid rate than anything previously seen.
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We all want some sort of protection. We want to have safety written into some if not all of the investments that we make. But can safety be ridiculous? Of course it can. A recent study that analyzed Federal Reserve data shows that savers have squirreled away some $1 trillion into accounts that pay an average of 2%. What concerns us is that this money could have been invested in equally safe accounts that would have produced a greater return. What we are talking about here is lost potential.

It is not a bad thing to have a rainy day account at your local bank. But keeping the lion’s share of you money there is not a very wise decision.. If you take the $1 trillion I previously mentioned and invested it for forty years in an account that was getting you, say, 7%, and that money would have been worth over $15 trillion. Now there is probably no way you are going to get your grandmother to move her savings from the first national down on the corner. But that not to say you have got to be invested with her.
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Will Rodgers once said when asked about investing: “Buy the stocks that are going to go up. After they’ve gone up, sell them. If they don’t go up, don’t have bought them.”

It is far too easy in this current market environment to second guess what we have to assume was a decent strategy from the start. It is far too easy to listen to every talking head that seems increasingly somber each day as each downturn takes place. It is far too easy get caught up in the self questioning. So what do you do? When do you stop questioning yourself? Where should you have been to avoid this carnage? How can I pare my losses? Why me?

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