Review Category : Investments

Why This Tech Bubble Isn’t Like The Last Tech Bubble

It has been 18 years since the ‘dot-com’ bubble happened in 2000, and many people are wondering when Ctrl + Alt + Delete button might get clicked again in their portfolio.  As the NASDAQ gently clipped the 8,000 mark this past week, there have been many articles discussing that equities are ending their run especially in the arena of technology.   However, today’s technology run is far different than that of 20 years ago when the NASDAQ traded at triple-digit P/E ratios and anything with a dot-com after it and a pulse would have significant valuation in the marketplace. Here were the top 10 holdings back in 2000 in the NASDAQ Today, the top 10 holdings in NASDAQ include the following: Apple, Amazon, Microsoft, Google, Facebook, Cisco, Intel, Comcast, PepsiCo, and Netflix. So, why is this tech bubble so much different than the tech bubble from almost 20 years ago? Dividends – Companies have lots of choices on what to do ...

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Should You Buy A Home Before Amazon Makes A Decision

Amazon will soon announce the winner of its HQ2 parade, with one city emerging victorious to get on the back of Jeff Bezos and ride him like Secretariat for the Triple Crown.  There are all sorts of interesting statistics on what an Amazon HQ will do the economy of the city it picks and even recently there were odds thrown out with Boston as the 5/1 to favorite.  If sports betting becomes legal in time in all states, would you take this bet? One financial decision to consider now in the cities that believe they have a chance to reel in Amazon for HQ2 is whether or not to buy real estate betting that prices will soar through the roof like they have in Seattle over the past five to ten years.  The bet is to get in the real estate now before prices explode after the announcement.  It’s almost like betting on an earnings report on Wall Street or ...

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Why Investors Can’t Measure Their Own Risk Tolerance

When people start investing money, one of the exercises they engage in is determining their own risk tolerance.  Usually, this process is handled by filling out some sort of questionnaire that has multiple choice questions like the one below. ‘If you had $10,000 to invest, would you….’ Be willing to chance earning 30% growth knowing you could lose 30% Be willing to chance earning 10% growth knowing you could lose only 5% Be willing to lose nothing knowing you could earn no more than 5% We often whisk through these quizzes at a blazing pace because in a simulation exercise we know exactly who we are.  However, there are two types of behaviors that we have within our personality.  How we act in a natural state when we are relaxed and have no pressure.  Then, there is the adaptive state when we are under heavy pressure.  Unfortunately, these quizzes don’t really put us under any pressure so they don’t really ...

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Four Things You May Not Know About 529 Plans

As much discussion as there is about trying to control the cost of college education, just talk to any parent who is paying to deal with college that no gravity is defying this rising cost.  Amidst all of the projections you read on the college websites, when you add in the cost of your family travel, stops at the bookstore, and home care packages, the overall cost to send your child away for a four-year degree could cost you a long delay in your retirement. In the mid 1990’s Section 529 of the Internal Revenue Code was created.  In 1997 (just twenty years ago) Section 529 was amended by the Taxpayer Relief Act, which provided a handful of higher education tax incentives including the deductibility of student loan interest.  We know how much children are struggling with student loans, and in 2001 the earnings on 529 plans became completely tax free if they were used for college.  As people learn ...

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5 Things You Need To Know About The Bitcoin Before You Invest Your Money

It has become clear that the new gold rush people are talking about is the Bitcoin.  The problem is that most people have no ideas what the Bitcoin is exactly, how it works, or the way that a transaction happens with this currency.  When they start talking about the Bitcoin on major TV shows like The Big Bang Theory, then you know it’s time to get educated about this kind of investment before you jump into the deep end with your portfolio.  Here is your guide on five things you need to know about the Bitcoin before you invest your money. What Is The Bitcoin? In the simplest of terms, the Bitcoin is a digital currency peer to peer online payment system.  It is created through something called block chain technology, but at its heart it is simply a peer to peer payment system.  What makes something like the Bitcoin unique to modern currency is that there is no central ...

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What You Should Know About The Current Trump Tax Plan

Almost a year after President Trump was elected to office, none of the main agenda bills have passed in Congress.  With Thanksgiving looming around the corner for a Congress shut down here in 2017, one of the big questions will be whether the major tax bill passes before the end of the year.  This single tax plan could have a big effect on how the market finishes here in 2017 and its potential impact into 2018.   Here are the key points you should know about the current Trump Tax Plan. Businesses Get The Biggest Cut The current proposal is to reduce the tax rate of “C” Corporations (currently mostly large corporation) to move from the current 35% down to 20%.   Consider this impact for a company that makes $20 billion dollars and currently pays $7 billion dollars in taxes.  Those companies would in theory get back another $3 billion dollars in freed up cash flow.   The current proposal still considers ...

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What Fantasy Football Can Teach You About Diversification (or Your Financial Plan)

The football season is upon us again here as the fall rolls around and neighborhoods and workplaces are buzzing with Fantasy Football fever.  The Fantasy Trade Sports Association commented that the Fantasy Football market is more than a 70 billion dollar industry today and growing.   With so many people joining multiple leagues, what can this popular game teach us about how we manage our portfolios and diversify our assets. Do Your Homework? It’s shocking how many people don’t know what they own in their 401(k), IRA, or their brokerage accounts.  You may have purchased a target fund or some growth and income fund, but you don’t actually know what you own.   Moreover, you may not understand the risks on how much you could gain in one year or how much you could potentially lose in one year.  It’s important to read the prospectus before you invest, look at the track record of the investment you will be making, and learn ...

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