The idea of investing can seem terribly haphazard, especially if you've just finished watching Wolf of Wall Street. What are you going to do with your money? Invest it? Is a money market better? Or what about bonds? But do you know what are you're doing? No? You should start reading then. Even if you chose to have broker do your investing for you, staying up to date with the latest information helps make better long-term financial decisions.
Here are six websites you should be reading, subscribing to or studying.
If you have questions relating to money and finance, then Investopedia is where you turn. An easy to understand dictionary, guides, calculators and stock stimulator can help students and investors alike. If you're not ready to dive into the investing world, there's the Stock Market game, which can give you a practice run and compare how you do with investors without losing money.
One of the more extensive websites, Seeking Alpha provides crowd sourced investing information on over 8,00 tickers. Stock analysts, traders, economists and industry experts create the content and editors curate. Since a community creates Seeking Alpha Investing content, advice is typically from the buy-side of the market.
3. SEC EDGAR
If a company is public, than the SEC has a slew of information on the company that's beneficial for investors. The company's prospectus provides background information on business operations, history, financial conditions and risk assessment— all of which has been audited by a CPA. The 10-K and 10 Q are annual and quarterly financial reports. You can also learn about owner(s) information, any ownership changes, criminal behavior and any legal scuffles. Plus, the SEC kindly provides red flags in the footnotes of company filings.
Yahoo Finance offers real time information on stock quotes along with financial reports, aggregated content and original content. The good stuff is the SEC filings, analysts' estimates for quarters, and ownership data. Plus, you can easily create and save screeners to filter and track stocks based on your investing preferences. Another valuable tool is the "My Portfolio" tool, which can serve as your home base with real-time stock performance and news.
Bloomberg's websitse, newsletters, magazines, live stream TV and radio offer comprehensive economic, business and stock market news and data. Started by former Salomon Brothers partner Michael Bloomberg, the company began as terminal computer system for Wall Street Firms. Basically, it's made by serious investors for serious investors. If you're trading in foreign markets, Bloomberg's around the clock and around the world stock coverage is a serious asset. Even if you don't have an extra two grand for subscription fees, there is plenty of free valuable content.
6. Bank Rate
If you're a what if's person, than Bank Rate will make your heart pitter patter. Use Bank Rate to calculate and compare rates for bonds and CDs. Or use the Investment Calculator to see if your investments are on track to match your goals.
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.