You may have heard of exchange-traded funds, ETF for short, which are investment vehicles that track an index. But did you know there are bond ETFs? ETFs work much like index mutual funds in that they hold assets in quantities mimicking an index. But, unlike mutual funds, ETFs trade on an exchange, like a stock. Bond ETFs are simply ETFs that track a bond index instead of a stock index. Some track broad bond indices, such as the Lehman US Aggregate Index. Others track narrower bond indices, such as the Lehman 1-3 Year Bond Index and the Lehman 7-10 Year Bond Index. This allows investors to obtain exposure to bonds of specific maturities. Bond ETFs are attractive because they offer easy diversification as well as low costs and tax efficiency. Because they aren’t actively managed, ETFs typically don’t have high fees. They also tend to have low turnover, to they generate relatively low capital gains.
Cake Financial: The best way to manage your investments. The question is... how do you get started with Cake Financial... or better yet, how do you get started down the path of becoming a better investor? In this screencast we cover the basics of Cake Financial with the hopes of getting you on your way to becoming a better investor! Learn more at http://cakefinancial.com
http://www.cakefinancial.com Today’s energy markets are booming, and that’s fueled demand for new ways to invest in the sector—including exchange-traded funds, or ETFs. ETFs are investment vehicles. They work much like index mutual funds in that they hold assets in quantities mimicking an index. But, unlike mutual funds, ETFs trade on an exchange, like a stock. Energy ETFs are simply ETFs that track energy-related securities. Some of them track broad market indices, such as the Dow Jones U.S. Energy Sector Index or the Goldman Sachs Natural Resources Index. Other track specific sub-sectors, such as oil, natural gas, or alternative energy. You can even get energy ETFs that invest only in foreign stocks. Most investors won’t want to make energy ETFs the bulk of their portfolio—it’s simply too risky. But energy ETFs can be a good diversifier. That’s because they can help hedge your portfolio against rising energy prices, which can drive up inflation and drive ...
http://www.cakefinancial.com Today’s energy markets are booming, fueling demand for new ways to invest in the sector—and making commodities ETFs more and more popular. First, let’s review how ETFs, or exchange-traded funds, work. These investment vehicles, like mutual funds, hold assets, such as stocks or bonds. But, unlike mutual funds, they trade on an exchange, like stocks. Commodities ETFs are simply ETFs that track commodities, such as precious metals, oil, gas, and crops. Different commodities ETFs do this in different ways. Some hold physical assets, so each share in an ETF might present a specified amount of the asset—say, one-tenth of an ounce of gold. Others track the performance of commodities-related stocks or futures contracts. Most investors won’t want to make commodities ETFs the bulk of their portfolio—it’s simply too risky. But commodities ETFs can be a good diversifier. That’s because they can help hedge your portfolio against rising ...
http://www.cakefinancial.com You may have heard about currency trading, but chances are you haven’t done it. That’s because currency trading is tough for the non-professional investor, since it requires a sophisticated understanding of subtle fluctuations between world currencies. In 2005, however, one investment firm made it a little easier to trade currencies by launching the first currency exchange-traded fund. An exchange-traded fund, ETF for short, is an investment vehicle. Like a mutual fund, it holds assets, such as stocks or bonds. But unlike a mutual fund, it trades on an exchange, like a stock. A currency ETF—and there are many today—is simply an ETF that invests in a currency, such as the U.S. dollar, the euro, the Japanese yen and even the Swedish krona. Why consider a currency ETF? In part because it can be used to hedge against the falling U.S. dollar—which many investors consider an increasing problem. The Best Way to Manage Your Investments. ...
http://www.cakefinancial.com So you’re interested in PowerShares ETFs? First, let’s review how ETFs, or exchange-traded funds, work. These investment vehicles, like mutual funds, hold assets, such as stocks or bonds. But, unlike mutual funds, they trade on an exchange, like stocks. PowerShares are simply a brand of ETFs. They’re managed by PowerShares Capital Management LLC, which is a unit of a UK-based investment management company called INVESCO PLC. There are almost 50 PowerShares ETFs available, and they focus on a variety of market sectors. Cake Financial supports powershares ETF's. http://www.cakefinancial.com
http://www.cakefinancial.com Exchange-traded funds. Index funds. What’s the difference? An exchange-traded fund, ETF for short, is an investment vehicle. Like a mutual fund, it holds assets, such as stocks or bonds. But, unlike a mutual fund, it trades on an exchange, like a stock. Most ETFs track an index, such as the Dow Jones Industrial Average or the S&P 500 Index. As a result, many people think of ETFs as modified index funds. ETFs, which are relatively new investments, are attractive because of their low costs and tax efficiency. Because they aren’t actively managed, ETFs typically don’t have high fees. They also tend to have low turnover, to they generate relatively low capital gains. The Best Way to Manage Your Investments. http://www.cakefinancial.com
http://wwww.cakefinancial.com Mortgage-backed securities may sound complicated, but they really aren’t. When you take out a mortgage with a local bank, that bank typically sells the mortgage to another entity—usually a big financial institution, such as an investment bank or one of the two U.S. mortgage giants, Fannie Mae and Freddie Mac. Those financial institutions take your mortgage, packages it with hundreds of other mortgages, and sell shares of the package. These shares are called mortgage-backed securities. Simple, right? If you’re familiar with the term, it’s probably because mortgage-backed securities became controversial during the housing boom of 2004 and 2005. Around that time, lower interest rates increased consumer demand for loans, and banks responded by creating a new type of mortgage. It was called the subprime mortgage, and it was made to individuals with questionable credit histories. Banks then sold these subprime mortgages, which were packaged ...
http://www.cakefinancial.com Collateralized debt obligations, also called CDOs, may sound complicated—but they really aren’t. CDOs are simply a type of security, like a stock or a bond. What makes CDOs different from stocks and bonds, however, is that they’re not single securities, but packages of many securities. Essentially, a CDO is a corporate entity that owns many debt-type assets, such as bonds and loans. The CDO then “securitizes” this package of debt assets, which means it sells shares to investors. Although CDOs don’t focus on one type of debt, they tend not to invest in mortgages. Cake Financial is the best way to manage your investments. Sign up today for FREE! http://www.cakefinancial.com
http://www.cakefinancial.com Congress authorized the creation of 401(k) plans in 1981, and today they’re governed by the U.S. Department of Labor. Although the government sets general regulations for 401(k) plans, plan administrators and employers may follow these regulations in a variety of ways. For example, regulations allow 401(k) plans to permit hardship withdrawals, but 401(k) plans don’t have to do so. Employers can also match your plan contributions in varying amounts, or not at all. As a result, when you enroll in a 401(k) plan, it’s a good idea to familiarize yourself with your plan’s policies. Your plan administrator or employer will probably offer a welcome packet explaining everything you need to know. Cake Financial is the best way to manage your investments. Sign up today for FREE! http://www.cakefinancial.com
http://www.cakefinancial.com So you’re interested in transferring your IRA assets. When you change jobs or retire, you can roll your 401(k) assets into another 401(k) plan, if available, or an IRA. There are two ways you can do this. First, you can make a direct rollover. This means the check goes directly from your current plan to your new plan. Because you never touch the money, taxes aren’t withheld. A direct rollover is a good idea if it’s available, because the other option—an indirect rollover—can get tricky. With an indirect rollover, the check goes from your current plan to you, and you send it to your new plan. The problem is, your plan withholds 20 percent of your money and sends it to the IRS. The remaining 80 percent, which you receive, must be deposited into a qualified retirement plan within 60 days, or it’s subject to a 10 percent penalty. The good news: If you do put the remaining 80 percent in a qualified retirement plan, you can recover the 20 ...
http://www.cakefinancial.com You may not be the only one contributing to your 401(k) plan, thanks to employer matches. What does that mean? Simply that your employer might match part or all of your 401(k) plan contributions. For example, your employer might match 100% of the first 4% you contribute and 50% of the second 2% you contribute. That can really add up. Let’s say you make $100,000 pear year and contribute 10% to your 401(k) plan. That makes your annual contribution is $10,000. Your employer matches your first 4% dollar-for-dollar, contributing $4,000. It matches your next 2 percent 50 cents on the dollar, contributing $1,000. You end up with $15,000 in your account—$5,000 more than you contributed! Keep in mind that your employer’s contributions may not be vested for a certain number of years. In other words, they’ll be in your account, growing. But, if you leave the company within a specified time, you can’t take them with you. Finally, there are limits as to ...
http://www.cakefinancial.com If you’re taking a position with a new employer or even retiring, you’re faced with a major financial decision: what to do with the money in your 401(k) plan. No problem! One of the benefits of a 401(k) plan is that it can follow you throughout your career, thanks to rollovers. When you change jobs or retire, you have several options for your 401(k) plan. You can leave your money in the plan. Or, you can roll your money into another retirement plan—another 401(k) plan, if available, or an Individual Retirement Account, also called an IRA. If you’re changing jobs and like the investment options in your new employer’s 401(k) plan, rolling your money into that plan might make life easier. With all of your retirement money in one account, it should be easier to track. But, if you’re unsatisfied with the investment choices in your new employer’s 401(k) plan, or you’re retiring, you can open an IRA through a bank or brokerage ...
http://www.cakefinancial.com An IRA, short for Individual Retirement Account, is an investment account in which you save money for retirement. Although there are several types of IRAs, the most common is the Traditional IRA. How does it work? Anyone under age 70½ who earns money can make contributions to a Traditional IRA. The contribution limit changes each year. Once the money is in your IRA, you can invest it in a number of different securities, such as stocks, bonds and mutual funds. As the years go by, all of the income from those investments—that is, interest, dividends, and capital gains—accumulate tax-free. As a result, your savings can really add up. You can begin taking distributions from an IRA at age 59½. At that time, you pay taxes on the withdrawals at your ordinary income tax rate. Join Cake Financial Today for FREE! http://www.cakefinancial.com
http://www.cakefinancial.com Generally speaking, you can start taking distributions from your 401(k) plan when you reach age 59½—but what if you want to take withdrawals earlier? Uncle Sam is waiting to tax your money, and when he does, your nest egg may not be quite so plump. Twenty percent of your savings will be withheld immediately to pay federal income taxes, and you’ll have to pay any remaining federal taxes, as well as state and local taxes, when you file your taxes return. If you’re under age 59½ and still working, you may also be subject to a 10 percent early-withdrawal penalty. Sometimes, however, you may have an emergency and need some extra cash. To help you in these times, 401(k) regulations allow for early withdrawals in a number of ways. First, if your plan allows it, you can take a loan from your 401(k) account. There are limits as to how much you can borrow and how long you have to pay back the money, and you still have to pay interest—but at least you pay ...
http://www.cakefinancial.com If you’re interested in trading options, you need to understand the difference between the two major types—calls and puts. First, let’s review how options work. An option is a contract. It gives you the right—but not the obligation—to buy or sell an asset at a specific price before a certain date. As I mentioned, there are two types of options. One is the put option. It gives you the right to sell an asset at a certain price by a certain date. That may seem complicated, so let’s look at an example. Let’s say you own 100 shares of a company called Lemon Car Dealers, which you bought at $100 a share, and is still trading at $100 a share. For some reason, you think the stock might decline in value, and you want to protect yourself. After all, if the company goes out of business, you’d be out 100 shares at $100 each, which is a total of $10,000. So, you buy an options contract for $1,000. This particular contract lets you ...
http://www.cakefinancial.com If youâ??re interested in trading options, you need to understand the difference between the two major typesâ??calls and puts. First, letâ??s review how options work. An option is a contract. It gives you the rightâ??but not the obligationâ??to buy or sell an asset at a specific price before a certain date. As I mentioned, there are two types of options. One is the call option. It gives you the right to buy an asset at a certain price by a certain date. That may seem complicated, so letâ??s look at an example. Say you think a particular stock, which is currently trading at $100 a share, is going to skyrocket, but youâ??re short on cash at the moment. So, you buy a call option on that stock for $1,000. It lets you buy 100 shares of the stock at $100 each anytime within the next three months. As you predicted, the stock goes through the roof, hitting $1,000 a share. But guess what? You have a contract. Someone has to sell you the stock for $100 a share. So, ...
http://www.cakefinancial.com Most of us spend so much time putting money into a 401(k) plan we forget about the fun part—how you take money out of your 401(k) plan. Generally speaking, you can start taking distributions from your 401(k) plan when you reach age 59½. You can take a little at a time, or all the money at once. Or, you can keep the money in the plan and let it grow. When you reach age 70½, however, you have to start taking distributions. There is one exception: If you’re working at the same company that offers your 401(k) plan, you may be able to keep the money in the plan. Now, let’s say you’re a big saver and you want to retire early, before age 59½. Provided that you’re no longer working, you can start taking distributions as early as age 55. Finally, regardless of when you take distributions, they’re are subject to federal, state and local income taxes. Keep in mind that these are the rules for regular distributions. If you take withdrawals ...
http://www.cakefinancial.com If you have a 401(k) plan, you may be interested in contributing as much as you can. But how much is that? It depends on many factors. First, government guidelines specify the maximum you can contribute to a 401(k) plan, and the maximum changes every year. In 2008, it’s $15,500. In 2009 and beyond, that number will be adjusted for inflation. This figure doesn’t include any funds that your employer might graciously add to your account—and this is important, because many employers will also “match” your 401(k) plan contributions, in part or in full. There are limits on the total employer and employee contributions. In 2008, they can’t exceed 100% of your salary or $46,000—whichever is lower. Again, in 2009 these limits will be adjusted for inflation. Finally, keep in mind that these are just general guidelines, as 401(k) contribution rules are complex. Your 401(k) plan administrator or employer can provide more details. ...
http://www.cakefinancial.com You may think options investing isn’t for beginners, but many investors use it to protect their stock investments. So let’s take a look at how it works. An option is a contract. It gives you the right—but not the obligation—to buy or sell an asset at a specific price before a certain date. I know that sounds confusing, so let’s look at an example. Let’s say you own 100 shares of a company called Lemon Car Dealers, which you bought at $100 a share, and is still trading at $100 a share. For some reason, you think the stock might decline in value, and you want to protect yourself. After all, if the company goes out of business, you’d be out 100 shares at $100 each, which is a total of $10,000. So, you buy an options contract for $1,000. This particular contract lets you sell 100 shares of Lemon Car Dealers for $80 a share. Two things could happen. First, as you suspected, Lemon Car Dealers could go out of ...
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