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Advocates of the “Don’t fight the Fed” investing theory suggest working with the Fed’s policies by investing more aggressively when the Fed is lowering rates. Conversely, when the Fed raises rates, you’d be more conservative in your choices. The saying suggests you should keep your money in stocks (up to your level of risk tolerance) when the Fed’s FOMC is actively lowering rates or keeping them low. For example, suppose the Fed cuts interest rates to spur economic growth in the United States....

Mortgage Rate History The average 30-year fixed-rate mortgage was 2.81% as of Oct. 29, 2020, significantly lower than it was at the same time in 2019, when it was 3.78%. The Federal Reserve voted not to increase the federal funds rate in March 2021, so it remains low, and this rate indirectly affects mortgage rates. The chart below shows the change in 30-year fixed-rate mortgages from 2000 through Oct. 29, 2020....

How To Find a Potential Real Estate Agent When you’re a first-time homebuyer looking for a real estate agent, the first place to start is your friends, family members, and acquaintances. People you know can be valuable sources of referrals, especially if they’ve recently purchased a home. Ask recent homebuyers about their experiences with their agents. Were they satisfied with the service they received? Would they use that agent again? Of course, your search shouldn’t end there....

Joint Owners If one owner of a joint CD account dies, what happens next depends on if the account has the “right of survivorship.” If it does, the deceased owner’s share will pass to the surviving owner without needing to go through probate. “That does not mean the CD gets liquidated and the surviving joint owner becomes the owner of a new CD,” Jeffrey A. Asher, Esq., estate planning attorney at the Law Offices of Jeffrey A....

Two and twenty has long been the standard in the financial industry for hedge funds, venture capital funds, and other private investment funds. Alternate name: 2/20 For an example of how two and twenty works, imagine that you have $2 million to invest. You choose to place that money in a fund charging two and twenty. Over the course of one year, you’ll pay roughly $2 million x 2% = $40,000 for the 2% management fee....

There are many reasons a company may want to offer shares of stock to employees. For example, many new companies will offer stock to their workers as an incentive. Owning part of the company helps employees feel truly invested in their work. Stock options can also be a good way for an early-stage company to compensate workers if it can’t afford to pay higher salaries right away. No matter the reason, a company that wants to offer shares to employees must get a 409a valuation....

What Is In a Beneficiary Statement The beneficiary statement contains the name of the lending institution, and their address and telephone number. It has the account number of the existing loan. It has the name or names of the borrower or borrowers. It is dated, which is important, as the amounts will change as interest accrues and the principal is paid. It has the current principal balance as of that date....

Alternate name: Taxable account Brokerage accounts are the more basic alternative to retirement investment accounts, like 401(k) plans and Roth IRAs. Unlike retirement accounts, which have special rules and tax advantages, brokerage accounts have very few restrictions, and any gains or losses (including dividends) are reflected on your taxes for that year. How Does a Brokerage Account Work? Brokerage accounts are easy to open. The process is similar to opening a checking account with a bank....

What Is a Business Contingency Plan? A business contingency plan is a “plan B” or blueprint for how to keep your business running in the event of a natural disaster, major technical issue, or other unforeseen disruption. A contingency plan identifies potential risks to your business and outlines steps your management team and employees can take if confronted with one of those risks. It helps protect the health and safety of your workers after an event has occurred, while also minimizing business interruptions that can result in financial losses....

One of the most common reasons for crafting a business plan is to attract investors—and, in return, receive funding. As an early stage company, for example, you may leverage your business plan to convince investors or banks that your entity is credible and worthy of funding. The business plan should prove that their money will be returned. A business plan can also be useful for when a well-developed company goes through a merger or acquisition....

How Corporate Bonds Work Think of it like this: A corporate bond is like an IOU that a company gives you in return for money you lend the business. It’s a contract to pay you back at a certain rate of interest at a certain period. The alternative for companies is to engage in an initial public offering and raise equity by selling stocks. This is a long and expensive procedure....

In some high-cost areas, loan limits go much higher to account for local housing markets. For example, in Los Angeles County, the 2022 limit is $970,800 (the one-unit baseline of $647,200 multiplied by 150% since it is a high-cost area). How Do Jumbo Loans Work? Banks and other private investors issue jumbo loans. Those lenders typically do not sell jumbo loans to GSEs, so they can design their own approval criteria....

Brokers are free to set their own rules, but under regulations set by the Financial Industry Regulatory Authority (FINRA) and the Federal Reserve Board, a broker may lend up to 50% of a security’s price on margin. After the purchase, they’ll keep track of the value of your securities compared to debt. The minimum amount of equity you must maintain in your account is called the maintenance margin. While 25% is the lowest requirement allowed by law, many brokers set it at 30% or 40%....

The difference is that a POS plan requires you to select a primary care physician like you would with a health maintenance organization (HMO) plan. You can choose your preferred provider from the list of participating doctors, who will also be responsible for giving you a referral when you need a specialist. However, you’re not limited to working only with your preferred provider. Just like an HMO plan, a POS plan lets you seek care from out-of-network providers, but your discounts and benefits are reduced....

Property that has not yet been placed into a trust typically is held in your own name. Your state’s probate court therefore would determine who receives it after your death under a process known as intestate succession if you leave no last will and testament. How a Pour-Over Will Works The purpose of a pour-over will is to ensure property intended for a living trust goes to the trust to be distributed to the intended heirs....

Rabbi trusts are most often used by companies as a way to attract and retain key executives. The biggest benefit is that high-earning employees don’t have to pay taxes on contributions until they take withdrawals. If you’re an executive who has access to a rabbi trust as part of your benefits package, understanding how it works can help you decide if you should take advantage of it. For example, if your employer has a rabbi trust and you’ve deferred $50,000 of your compensation into that trust, you wouldn’t pay taxes on that $50,000 until you retired or reached another triggering event....

According to data compiled by Stock Trader’s Almanac in the 70 years between 1950 and 2020, a Santa Claus rally has occurred 57 times and has, on average, seen the S&P 500 go up by 1.3%. The S&P 500 was introduced in its current form only in 1957. Between 1926 and 1950, it existed as the Composite Stock Index, tracking 90 stocks. Example of A Santa Claus Rally An example of a big Santa Claus rally occurred in December 2008 going into January 2009....

It can also be a secondary offering, reselling existing securities such as shares held by insiders at a company. Shelf offerings are cost-effective because companies don’t have to go through the full registration process every time they want to offer new securities. Shelf offerings can only be used by companies that are qualifying issuers. Qualifying issuers have: Previously registered a class of securities for sale Filed all required financial reporting on a timely basis in the last 12 months Principal business operations in the U....

Alternate names: Soft second mortgage, subordinate loan, second mortgage assistance program, unreported second mortgage, forgivable second mortgage For example, if you found a home you wanted to buy and couldn’t afford the 20% down payment, you could take out a loan from a private lender and make the payment, as long as you tell your mortgage lender about it. How Silent Second Mortgages Work Silent second mortgages often come in the form of government programs that help homeowners with down payment costs....

It also estimates your eligibility for federal financial aid, including student loans and Pell grants. Note that your Student Aid Report is not your financial aid award. Rather, schools review your Student Aid Report to put together your financial aid package. Once you receive your report, you’ll also see your Expected Family Contribution (EFC). Your EFC is not necessarily the amount your family must pay for college. Instead, it’s an index number colleges use to calculate your eligibility for financial aid....