Some employers decide to offer their employees the incentive of stock options as a form of employee compensation, and while this may seem like a good option at first glance, there are actually quite a few issues with it. Find out why employers might choose employee stock options as incentives and why they probably shouldn’t. Check out Etrade today to find out more about your own online trading possibilities.
The Pros of Employee Stock Options
There are a number of benefits of offering employee stock options. However, it’s important to keep in mind that these may not outweigh the consequences of offering them. Check out some of the benefits of employee stock options here.
Employee Tax Flexibility
Stock options offer employees tax flexibility, as they can choose when they exercise their stock options and, thus, time when they are liable for income taxes associated with investing in these stock options.
An Affordable Incentive
When companies are looking for incentives for
Continue reading The Problems With Stock Options As Employee Compensation
The experience of others often provides great insight into the goals we are pursuing. This is as just as true with forex as it is any other discipline. Several great traders and financial minds have walked these paths already. Below you will find a brief collection of some of their most poignant thoughts on a variety of subjects related to finance and trading.
Warren Buffet Quote
“Rule Number 1: Never lose money. Rule Number 2: Never forget Rule Number 1.” – Warren Buffet
No article like this would be complete without a contribution from Mr. Warren Buffet. Mr. Buffet is heralded as one of the most successful investors ever and is an inspiration to many would-be traders because of his ingenuity and humility. This billionaire has not only made an unprecedented amount of money in the financial game but has pledged to give a majority of it away to charity after he passes.
His quote is fairly self-explanatory but encapsulates
Continue reading 4 Famous Quotes From Famous Traders
In all my years of investing, nothing has grown my portfolio more than my savings. I have done well with a couple of accounts over the past 4 years but that’s mostly due to the market crash of late 2008. Instead of fleeing the markets, I jumped in with both feet and picked up many stocks on a fire sale. I am, however, conscious of those performance reasons and as such I have continued to focus on saving what I can to grow my wealth. Saving plays a big part in my wealth building strategy.
The best saving you can do is to pay yourself first. Take 10% and put it away and never touch it. Do what you can to avoid touching it. Temptation may be there, but if you touch it, you have to start over and time is crucial!
I put 10% of my gross income in our company defined contribution plan and my employer gives me a 50% matching contribution so that’s
Continue reading Your Savings Ability is Your Golden Goose
Every now and again, you’ll hear that a stock split is announced and for one reason or another, the stock might go up … The fundamentals of a company do not change when a stock split is announced. There would appear to be some mental game with the stock price around the announcement and the day the stock splits though and momentum traders do take this opportunity to play the mental game.
Rational For Stock Split
There are some companies that have never split their stock. Berkshire Hathaway (BRK.A) and Google (GOOG) are 2 examples. It is rare that a company will not split their stock as a high stock price appears to create a mental blocker for many investors not to mention the inability to make a purchase.
Companies will issue a stock split for the mental game There are no changes in valuation but there is a perception the stock can be more appealing to investors. Since the role of the board of directors is to grow
Continue reading Are Stock Splits Good
Believe it or not but I have been investing for 20 years now but only in the last 5 years have I REALLY been investing. What I did back then is follow the rule of thumbs advertised by the financial industry… That process did not really fill my coffers unfortunately. Let me say that focusing on saving 10% of your income is a great rule of thumb but buying mutual funds is not … I really wanted to buy stocks but I had a mental blocker that I needed more money to invest. It’s true that back then the fees were higher but when I found Computershare and the Transfer Agents 5 years ago, I could not be happier. I was able to slowly start investing in stocks while planning my transition out of mutual funds. I had to break up with my financial advisor …
Related: Easy Investing With Computershare
With a focus on dividend investing, I was on a really good
Continue reading Is it worth to compare your portfolio to an index?
With the economy slowly starting to bounce back from a rough recession, an increasing number of people these days have begun to work up the courage to invest their hard-earned money once again. However, for those who are still skeptical about the market or who are contemplating between saving their money and investing it with the possibility of making a profit, this can be quite the conundrum. Here are some tips to help you decide whether it’s best to invest or save at this point in your life.
Why Not Both?
First and foremost, it is important to realize that this does not necessarily need to be an “either/or” situation. It is possible to both invest and save your money regardless of how much you may have to work with. Determining what amount to save and what amount to invest, however, is something that will take a bit of careful thought and research.
Related: Pay Your Mortgage
Continue reading To Invest or Save? That is the Question
Investing legend Warren Buffett is one of the greatest value investors of all time, but he is also a brilliant FX trader. Here are 10 FX nuggets from the Buffett table.
1. Buffett quote: “Risk comes from not knowing what you’re doing.”
Some investors jump into FX trading looking for a quick profit. For the novice, currency trading carries increased risk due to the lack of a regulated exchange and the need to predict near-term currency movement driven by national policy. The real risk, however, is leaping without learning the ropes first.
2. Buffett quote: “When you combine ignorance and leverage, you get some pretty interesting results.”
FX traders use leverage as a tool of the trade, but in ignorant hands it’s like handing a loaded gun to a toddler. Traders can trade $100,000 on a deposit of $1,000. This is heady stuff for people from the investing world and even seasoned traders who let the lure of margin get the best of their
Continue reading 10 of The Best From The Buffett Table
Although the method is different, credit card companies offer the age-old service of money-lending. Western consumers have an obsession with quick and easy credit. We are moving to a cashless society and credit cards offer the ultimate in consumer convenience. They allow customers to quickly purchase items and delay payment until they are ready to pay at a later date. Of course this comes at a cost; the interest rate. Credit card companies make lots of money off of consumers, and you can take advantage of this by investing in credit card companies.
Credit cards have revolutionized the way the world does business. So, how can you profit from the credit card industry? When evaluating and investing in credit cards, it’s important for investors to look at the following criteria. Here are things that credit card investors should watch for:
- Consumer Confidence
- Government Regulation
- Revolving Credit
- New Technology / Mobile Payments
- Late Payments
- Interest Rates on Late Charges
Credit Card Companies
Here is the summary
Continue reading Battle of Credit Cards Stocks
Face it, you can’t predict the markets and no one else can. It happened to me just last month. Potash Corporation (POT) was down significantly and with their current yield, it felt like a good time to initiate a position. Unfortunately, some uncontrollable economic event affected Potash’s price further downward. Market news can have an impact and are unpredictable.
Related: Markets Have You Worried
Benefits of Partial Sell
I have mostly used partial sells to take a profit. When one of my holdings runs away and generate some profit, I may sell some and re-purpose the funds to another investment.
The other purpose of a partial sell is to not completely walk away from your position. In some cases, you might just want to walk away but in other cases retaining a core holding is an option.
Another reason for a partial sell is to not miss an opportunity on a different holdings. Not everyone can add new money so you have to
Continue reading Benefits of Partial Buy or Sell
Every now and again, companies will execute what is call a stock split or even a reverse stock split. It seems to create chatter amongst investors when a stock split is announced by the board of directors but the reality is that a stock split doesn’t change anything to the underlying company value. The company is worth exactly the same.
For example, take Company X which operates in the drink business and have a stock price of $100 and they have 1 million outstanding shares for a total value of $100 million. In any of the scenarios below, the value will stay the same:
- 2-for-1 : 2 million shares * $50.00 per share = $100 M
- 3-for-1 : 3 million shares * $33.33 per share = $100 M
- 4-for-1 : 4 million shares * $25.00 per share = $100 M
The board of directors will usually be in favor or not depending on whether or not they feel their stock is being valued as the expect
Continue reading Understanding Stock Splits