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CNBC | Kyle Bass says investments in Chinese firms are not safe: ‘Imagine what kind of fraud is behind these companies’

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Chinese companies do not deserve to be listed on U.S. stock exchanges if they don’t adhere to the same standards as every American company, said hedge fund manager and Hayman Capital Management founder Kyle Bass.

With about $1 trillion of American capital moving into China by 2021 and around $2 trillion worth of Chinese entities listed in the U.S., Bass said the U.S. needs to crack down on the “insane” nature of U.S.-China business standards.

“Imagine what kind of fraud is behind these companies,” Bass told CNBC’s “Squawk on the Street” on Monday. “All of the U.S. money that goes into Chinese companies, it goes into companies that don’t operate under a rule of law.”

Sequence of Return Risk & Your Nest Egg | Personal Capital

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Sequence risk refers to the order or the timing in which your investment returns occur. It specifically relates to the risk of early declines and ongoing withdrawals impacting your spending during a certain period of time, most often in retirement.
— Read on www.personalcapital.com/blog/retirement-planning/sequence-return-risk-your-nest-egg/

The Social Security timing debate | Vanguard Blog

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Social Security benefit may be subject to 1 of 3 potential tax treatments depending on your income at the time you collect:

It won’t be subject to federal income tax.
Up to 50% of it will be subject to federal income tax.
Up to 85% of it will be subject to federal income tax.
Let’s say you retire at age 62 and cover your living expenses by taking withdrawals from a tax-deferred retirement account—a traditional IRA. The amount you withdraw from your traditional IRA will lower your account balance. This may reduce your future required minimum distributions (RMDs), which are calculated by dividing your retirement account balance (as of December 31 of the previous year) by the IRS’s life expectancy factor.

Since your RMD is considered ordinary income, smaller distributions can help you control your income when you begin collecting Social Security at age 70.

if you defer your benefit until you’re age 70 and live until age 90, you’ll collect $652,560 in Social Security over the course of your lifetime. If you don’t defer your benefit and begin collecting at your full retirement age (66), you’ll collect almost $80,000 less over the course of your lifetime.

Lifetime benefit based on age you collect

 

Note: Example excludes inflation.

The choice is yours

A timeless debate perseveres because it’s a fair fight—both sides of the argument hold water. Folding your pizza makes it easier to eat; not folding it makes it last longer. Cats are independent; dogs are loyal. No matter what you call it, a sandwich is delicious—so just enjoy it. Taking Social Security at full retirement age means you may be able to preserve other financial resources; deferring until age 70 means you’ll get more money when you do collect.

Several personal factors will likely influence when you decide to collect Social Security. At the risk of sounding morbid, you won’t know whether you’ve truly made the “right” decision until it’s too late. So the best advice I have to offer is to choose your Social Security start date based on the facts you know right now. If you get a good night’s sleep after you’ve made your decision, you’re on the right track.

*Source: longevityillustrator.org, supported by the Society of Actuaries.
— Read on vanguardblog.com/2018/05/30/the-social-security-timing-debate/

Social Security: Claim too early and lose $100,000 in retirement | USAToday

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In 2019, about 64 million Americans will receive over one trillion dollars in Social Security benefits, according to the Social Security Administration’s Social Security Fact Sheet. Those Americans will lose an average of $111,000 per household over a lifetime by taking Social Security benefits too early into their retirement, rather than using their own savings.


Only 4% of retirees took Social Security at the financially optimal age, which, for 83.4% of Americans, was age 67 or older. The best age depends on a host of factors, including life expectancy, other income sources, future costs in retirement and if you’re married or still working.
Fortunately, there are general rules of thumb that will get you close to your best claim age:

  • Nearly no one is better off claiming before 65.
  • Nearly everyone is better off claiming between 67 and 70.
  • If you’re married, the person who earned the most should wait until 69 or 70. The person who made less can claim at 66 or 67.

— Read on www.usatoday.com/story/money/2019/06/28/social-security-claim-too-early-and-lose-100-000-retirement/1572620001/

Financial tips: Year-end financial planning can start in the fall

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Just three months remain in 2019. To shore up your money situation, consider these timely seasonal tips dealing with taxes, savings and more.
— Read on www.usatoday.com/story/money/2019/09/29/financial-tips-year-end-financial-planning-fall/3812068002/

Return on Shareholder’s Equity (ROE)

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Shareholders’ equity is all earnings retained by the company, plus any capital paid in by shareholders. You can calculate shareholders’ equity by subtracting the company’s total liabilities from its total assets.

What Does Return On Equity Signify?

ROE looks at the amount a company earns relative to the money it has kept within the business. The ‘return’ is the profit over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, all else being equal, a high ROE is better than a low one. That means it can be interesting to compare the ROE of different companies.

What’s A Good ROE?

By comparing a company’s ROE with its industry average, we can get a quick measure of how good it is. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification.

How Does Debt Impact ROE?

Most companies need money — from somewhere — to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders’ equity. That will make the ROE look better than if no debt was used.

Careful use of debt to boost returns is often very good for shareholders. However, it could reduce the company’s ability to take advantage of future opportunities.

The Key Takeaway

Return on equity is one way we can compare the business quality of different companies. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have the same ROE, then I would generally prefer the one with less debt.

But when a business is high quality, the market often bids it up to a price that reflects this. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too.

Norwegian Cruise Line 2019 Encore Moments Contest

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REWARDING EVERYDAY HEROES – Norwegian Cruise Line

64 CRUISES TO BE AWARDED!

Norwegian Cruise Line believes in celebrating and thanking people whose acts of kindness and compassion make a difference in the lives of their friends and families, and within their communities. That’s why, to celebrate the debut of our latest innovative ship, Norwegian Encore, we are bringing hometown heroes to the forefront.

Nominate those who deserve an encore –including you! Tell us why your nominee is an everyday hero, then cast your vote.

The top candidates from the U.S. and Canada will receive a free cruise for two and an exclusive invitation to an award ceremony on Dec. 16 in New York City (including airfare and accommodations).

Be sure to share your submission on social media to encourage more votes and support Encore Moments!

  • Entry Period- The Contest begins at 1:30:00 PM Eastern Time (“ET”) on Wednesday, September 18, 2019 and ends at 11:59:59 PM ET on Friday, October 18, 2019.
  • Eligibility – In order to nominate an everyday hero or yourself, you must be a current legal resident of the 50 United States (including the District of Columbia and Puerto Rico), who is at least thirteen (13) years of age or older at the time of submitting your nomination, unless you are nominating yourself as a Nominee, in which case you must be twenty-one (21) years of age or older to be a Nominee.

10 Tips Every Futures Trader Should Know

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This list of tips and pointers may help new traders improve their trading experience in futures markets. Even longtime traders may benefit from revisiting this list from time to time, since we all know how easy it is to form bad habits.

So, whether you’re just beginning to learn how to trade futures – or a sophisticated, experienced veteran – we encourage you to read this list carefully.

These trading suggestions will never go out-of-date and will be just as valid in 10 years as they are today!

Plan in Advance

The number one tip on our list simply can’t be repeated often enough:

Developing a trading plan in advance helps you minimize situations where you’re forced to make important decisions when you’re already in the market, with money at risk, and when natural human emotions (fear and greed, in particular) can influence you. You need to make important trading decisions in a calm, rational way – not under stress and pressure. In a nutshell, plan in advance.

Know When to Exit a Trade

At the risk of being at least partially repetitive, always know the point at which you’ll throw in the towel and exit a trade that’s simply not working as you’d hoped. Of course, we all enter new trades with the hope and expectationn that they’ll be profitable. But the fact is, futures trading involves risk, and not all your trades will be moneymakers. So decide on your bailout plan before entering the market.

Set Triggers to Exit A Position

Always trade with protective stop-loss orders.

Charles Schwab Futures offers One-Triggers-Other orders, which allow you to place your primary order, as well as a protective stop, at the very same time. When the primary order is filled, the stop order will be automatically activated on your behalf. This frees you from having to constantly watch the market, and it relieves you from having to worry about entering your stop order at the right time. We encourage you to take advantage of this powerful feature.

Just remember, though, that stops are not a guarantee against losses – markets can sometimes move quickly through them. But there’s no doubt that picking your bailout point ahead of time, and trading with stop orders, is of vital importance.

Focus on a Limited Number of Markets

Don’t spread yourself thin by trying to follow and trade too many markets. Most traders have their hands full keeping abreast of a few markets. Remember that futures trading is hard work and requires a substantial investment of time and energy. Studying charts, reading market commentary, staying on top of the news – it’s not easy. If you try to follow and trade too many markets, there’s a good chance you won’t give any of them the time and attention they require. For most traders, 6-8 markets is about the maximum they can reasonably track.

Balance

Though you don’t want to try to follow too many markets, the opposite is also true – trading just one market may not be a terrific approach, either. Just as diversification in the stock market has well-known benefits, there might be advantages to diversifying your futures trading, too. For instance, suppose you expected gold prices to decline, but it turns out that you’re wrong. But you also expected the cocoa market to rally, and this proves to be correct. In this case, the gains on your cocoa position make up for (hopefully they more than make up for) your losses in the gold market. If you’d traded only gold futures, you might have been in bad shape. As the old saying goes, don’t put all your eggs in one basket.

Pace

If you’re a new trader, start slowly. There’s no reason to begin trading 5 or 10 contracts at a time when you’re just beginning.

In some cases, exchanges offer mini futures products that are identical to standard futures products – except that they’re smaller. The CME Group, for instance, offers an E-mini S&P 500 futures contract that’s identical to its flagship S&P 500 futures contract, except for the fact that the

Buy or sell

Trading opportunities present themselves in both rising and falling markets. It’s human nature to look for chances to buy, or “go long” the market, but if you’re not also open-minded to “going short” a market, you might be unnecessarily limiting your trading opportunities. Remember that with futures, it’s just as easy to sell (“go short”) the market as it is to buy (“go long”) the market. You can buy first, and then sell a contract to close out your position. Or, you can just as easily sell first, and later buy a contract to offset your position. Whether you buy first and sell later, or sell first and buy later, you’ll have to post the required margin for the market you’re trading – there’s no difference at all. So, don’t overlook opportunities to go short!

Patience

Don’t get so wrapped up in market action that you lose sight of the larger trading picture. As a self-directed, online trader, it’s true that you should conscientiously monitor your working orders, open positions, and money balances. But don’t hang on every uptick and downtick in the market. Not only can you drive yourself crazy, but you can be thrown by little market zigzags and whipsaws that appear formidable and significant at the moment but which, in retrospect, were only small, intraday blips. In other words, try to

Margin

If your account should happen to go on margin call, you’ll have two ways to meet the call.

Going “short” is as easy as going “long”

If you think the price of a commodity market is about to move higher, you can buy (“go long”) a futures contract. However, if you believe a commodity price is going to decline, you can sell (“go short”) a futures contract just as easily, with no special uptick or short-sale rules. It’s just as easy to go short as it is to go long!

Financial futures

Financial futures are based on underlying financial instruments. Financial futures generally fall into three broad categories: Stock indexes (such as S&P 500 futures and Nikkei futures), global currencies (such as the Euro and the Japanese Yen), and interest rates (including U.S. Treasuries and Eurodollars).

Options on futures

You also can trade options on just about every futures contract we offer, with everything from simple outright option trades to complex option spreads. If you’re an equity options trader, you’ll enjoy the fact that your knowledge is largely transferable to futures options. Though the underlying instrument is a futures contract, rather than a stock or index, all the same option fundamentals and strategies still apply.

Americans’ Confidence in Their Finances Keeps Growing

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Americans’ optimism about their personal finances has climbed to levels not seen in more than 16 years, with 69% now saying they expect to be financially better off “at this time next year.”

The 69% saying they expect to be better off is only two percentage points below the all-time high of 71%, recorded in March 1998 at a time when the nation’s economic boom was producing strong economic growth combined with the lowest inflation and unemployment rates in decades.
— Read on news.gallup.com/poll/246602/americans-confidence-finances-keeps-growing.aspx

Sustaining retirement income in a lower-return world | Vanguard Blog

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Retirement spending: 3 strategies

This challenging topic regarding spending rules to help retirees who want to generate a paycheck from their portfolios. Two of the most popular are the “dollar plus inflation” and the “percentage of portfolio” rules. One alternate solution: is the “dynamic spending” strategy.

The dollar plus inflation strategy is just what it sounds like. Upon retirement, you select the initial dollar amount you’d like to spend each year and increase that amount annually by inflation. The well-known “4% rule” follows this approach (Bengen 1994[1]). While this strategy allows for rather stable real spending from year to year, it also requires a trade-off: a higher risk of premature portfolio depletion. The chink in the armor for this strategy is that it’s indifferent to the returns of the portfolio, which can be problematic in both bear and bull markets. The result is you could potentially run out of money (or at least have to substantially reduce your spending since you’re not likely to continue spending down to your last $1) in the event portfolio returns are negative, or you could potentially live well below your means and not enjoy retirement to its fullest if portfolio returns are much better than expected.

The percentage of portfolio strategy, on the other hand, may be too sensitive to returns, creating significant income volatility based on market movements. With this strategy, the annual spending amount is a consistent percentage of the portfolio’s value. This approach ensures that the portfolio won’t be depleted, but as the portfolio’s value rises and falls, the income amount will rise and fall as well—sometimes dramatically. Yes, it’s this last part—income falling in response to negative returns—that people often struggle with.

The dynamic spending strategy is a more flexible approach that moderates the other two strategies’ weaknesses, as summarized in Figure 1.

With dynamic spending, you would calculate each year’s spending in three steps:
Use the percentage of portfolio approach (e.g., 5%) to calculate a spending level based on the portfolio’s value at the prior year-end.
Determine a range of acceptable spending levels based on the prior year’s actual portfolio value. To find the range, increase the prior year’s spending by 5% (the ceiling) and reduce it by –2.5% (the floor).[1]
Finally, compare the results. If this year’s spending amount based on the percentage of portfolio:
Exceeds the ceiling amount, spend the ceiling.
Is less than the floor amount, spend the floor.
As you can see, the dynamic spending strategy is a bit more involved and may require a little more discipline and oversight to follow compared with the other two strategies. Given that, this is certainly one area where working with a financial advisor can make a lot of sense and may even pay for itself.
— Read on vanguardblog.com/2019/08/08/sustaining-retirement-income-in-a-lower-return-world/