vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"Trying to ""time the market"" is usually a bad idea. People who do this every day for a living have a hard time doing that, and I'm guessing you don't have that kind of time and knowledge.  So that leaves you with your first and third options, commonly called lump-sum and dollar cost averaging respectively.   Which one to use depends on where your preferences lie on the risk/reward scpectrum. Dollar cost averaging (DCA) has lower risk and lower reward than lump sum investing. In my opinion, I don't like it. DCA only works better than lump sum investing if the price drops. But if you think the price is going to drop, why are you buying the stock in the first place? Example: Your uncle wins the lottery and gives you $50,000. Do you buy $50,000 worth of Apple now, or do you buy $10,000 now and $10,000 a quarter for the next four quarters? If the stock goes up, you will make more with lump-sum(LS) than you will with DCA. If the stock goes down, you will lose more with LS than you will with DCA. If the stock goes up then down, you will lose more with DCA than you will with LS. If the stock goes down then up, you will make more with DCA than you will with LS. So it's a trade-off. But, like I said, the whole point of you buying the stock is that you think it's going to go up, which is especially true with an index fund! So why pick the strategy that performs worse in that scenario?"
"All things being equal, a defined benefit pension is far better than an IRA or a 401(k).  Think about it this way - let's say you can have a guaranteed $100 a month*, or the chance at $100 a month.  Which is better?   Now, obviously, your tolerance for risk is the difference - but this is the beauty of a defined benefit plan. Your employer is picking up the risk.  Assuming that the pool of investments is about the same (which unless if their funds are tremendously under performing they are), the question is, who takes the risk - you or them? Especially if you are moving into a new position, having a defined benefit plan is like having a risk-free asset in your portfolio.  It increases your safety.  The only reason to roll this over into a 401(k) or IRA is if your expected value (risk * payout) is better.  A worked example. If half the time you would earn more than $100 and half the time less, then you could imagine the two as being equally good. Only if you really love risk would you take that chance.  In reality, only half the investments out there will ""beat"" the average, and as such, you actually have less than a 50/50 shot of beating a DB - unless if there are really low returns to it.  More likely, I suspect you are over-estimating your ability to get a higher return."
I agree that best is subjective and will not give investment advice. However, the tax deductible part can be dealt with quite swiftly. If you need tax deductibility right now, at the expense of later, put it into an RSP account. If you don't need tax deductibility right now, put it into a TFSA. Assuming you have room in either of these vehicles, I would suggest using just an RSP or TFSA cash savings account for now at ING Direct. Three reasons: You get the immediate benefit of having put it somewhere, and in the case of the RSP, an immediate tax deductibility. You don't have to worry about rushing into a specific investment and can give yourself time to figure out your goals and portfolio composition. (Read about the Couch Potato portfolio for a starting point.) You can transfer your money from them for free and still keep it registered in whichever plan it is in. The last point is the most important for my suggestion. The ability to quickly park the cash in a registered account and to move it for free using the appropriate form at a later date. Most places have a sneaky transfer-out fee. ING may not be the only place that doesn't, but I haven't looked into many other places about this. You might find something else that works the same way. And please, don't ever use GIC and high return in the same sentence.
Insurance isn't an investment.  It's a hedge against your untimely death, and is meant to replace the potential income that will be lost by not having you there to provide for your family. Buy term, and invest the difference.  Traditional investments will outperform the insurance fund, as well as offering more flexibility.
Save what you can. Due to compounding of interest, saving early is much more advantageous than saving the same amount later. Obviously you need money to live on, and you're entitled to spend some money on entertainment -- but set a budget on that and stick to that budget. Buying toys now deprives you of better toys later.  You aren't saving for an uncertain future; you are saving for a certain future!
Rest of the money you could put in other low risk instruments (that you have identified through self study) 4) If finance does not interest you: The probably you are better off with an investment manager, as observed above, it will take some time for you to identify him/her 5) On returns: As mentioned above different instruments produce returns differently, however, one question that is universally asked is how much return on an invetment shoule one expect (you were expecting more than $12 on your investment). It is a difficult question to answer as invetment returns and investment needs depend on a persons financial goals and risk taking profile. One way to have some measure is to take 15-20 years CAGR of the stock index return and reduce it by 2-3%, that is (in many cases, not all) a reasonable return expectation in medium-long term.
That interest rate (13%) is steep, and the balloon payment will have him paying more interest longer. Investing the difference is a risky proposition because past performance of an investment is no guarantee of future performance. Is taking that risk worth netting 2%? Not for me, but you must answer that last question for yourself. To your edit: How disruptive would losing the car and/or getting negative marks on your credit be? If you can quantify that in dollars then you have your answer.
Both are correct depending on what you are really trying to evaluate. If you only want to understand how that particular investment you were taking money in and out of did by itself than you would ignore the cash.  You might use this if you were thinking of replacing that particular investment with another but keeping the in/out strategy. If you want to understand how the whole investment strategy worked (both the in/out motion and the choice of investment) than you would definitely want to include the cash component as that is necessary for the strategy and would be your final return if you implemented that strategy. As a side note, neither IRR or CAGR are not great ways to judge investment strategies as they have some odd timing issues and they don't take into account risk.
"Fama-French would be a couple of names if you want to look at this from a value/growth dichotomy.  A simplified form of this was to take the stocks with a lower Price/Book Value that would be the value stocks while the others would be the growth.  The principle is that some of the beaten-down stocks will appreciate more than the growth stocks will.  6 Ways To Improve Your Portfolio Returns Today also makes note of the ""growth vs value"" split if you want another reference that way.  Historically, growth has been more volatile and produced lower returns, though past performance isn't necessarily always going to hold as some people like to invest in what is known as a ""slice & dice"" portfolio where a portion in invested in each of 4 corners: Large-growth, large-value, small-growth, and small-value.  Some may add in bonds, REITs, and foreign stocks but the idea is that in different years, different parts of the market will do better and this is a way to capture that in a sense."
A revocable trust? Else the title would be his...vs recieving a gift that large. Make it a business investment like a holding company. And use the trust as agreement to shares.
"The term you're looking for is yield (though it's defined the other way around from your ""payout efficiency"", as dividend / share price, which makes no substantive difference). You're simply saying that you want to buy high-yield shares, which is a common investment strategy. But you have to consider that often a high-yielding share has a reason for the high yield. You probably don't want to buy shares in a company whose current yield is 10% but will go into liquidation next year."
I would always recommend the intelligent investor by Benjamin Graham the mentor of warren buffet once you have a basic knowledge ie what is a share bond guilt etc  In terms of pure investment the UK is fairly similar the major difference is the simpler tax structure, ISA allowance and the more generous CGT regime.
There may be differences in different contexts, but here's my general understanding: Rate of Return (or Return on Investment) is the total gain or loss of an investment divided by the initial investment amount.  e.g. if you buy stock for $100 and later sell it for $120 you have a 20% Rate of Return.  You would have a 20% ROR regardless of if you sell it tomorrow or in a year. Internal Rate of Return is effectively annualized.  It is the annual rate at which each of a series of cashflows is discounted that would give you a net present value of 0.  Meaning if you spent $100 today and in exactly one year you received $120 back, you would have an IRR of 20%.  If you received the $120 back in 6 months, your IRR would be roughly 40%. An IRR calculation can include multiple cashflows at various times, while ROR is (in my mind) the total net gain or loss relative to the investment (irrespective of the time of the cash flows). IRR is more effective when comparing investments that have different time horizons.  Spending $100 to get $120 tomorrow is much better (from an IRR perspective) than getting $120 two years from now, since you could take that $20 gain and invest it for the rest of the two years.
It depends on what stocks you invest in or whether you invest in an index, as all stocks are not created equally. If you prefer to invest directly into individual stocks and you choose ones that are financially health and trending upwards, you should be able to easily outperform any indexes and get your 30% return much quicker. But you always need to make sure that you have a stop loss placed on all of your stocks, because even the best performing companies can go through bad patches. The stop loss prevents you from losing all your capital if the share price suddenly starts going south and turns into a downtrend.
which is a better way to structure a SIP, This is no one way better than other. SIP as you already know offers advantages in terms of averaging costs.  Given that transaction costs are same, averaging daily would be better from law of averages point of view. The only flip side to doing it daily is tracking, i.e. your Bank Statement is going to look horrible, recon as to what and how much got purchased will be horrendous. Further tracking liquidity could be an issue unless you use segregated accounts. i.e. you don't know how done you are with your investments. On monthly this is more easy, once you get salary and get investments and other mandatory payments out of way, you know what you have in the account for rest of the month. In the end I would put this more of convenience than anything else.
Growth is how well the investment will grow on average.   In the long term, this is a sure thing.  Volatility is how much the value will jerk up and down in the short term.   Do you want both... Or neither?  When are you going to use the money? If it's IRA money you can't touch for 30 years, it really ought to be in the market, since growth is hugely important, and volatility is not a big concern. You're in it for the very long game, and volatility will average out, leaving pure growth.  If the market drops 25% in 6 months, who cares?  Stocks go up, stocks go down. It has 29 years to recover, and it will.   If you are planning to buy a house in 6 months, you want that money in something like a CD, because volatility could be devastating: an untimely 25% drop in stock price could really, really suck.
ETFs are a type of investment, not a specific choice. In other words, there are good ETFs and bad. What you see is the general statement that ETFs are preferable to most mutual funds, if only for the fact that they are low cost. An index ETF such as SPY (which reflects the S&P 500 index) has a .09% annual expense, vs a mutual fund which average a full percent or more. sheegaon isn't wrong, I just have a different spin to offer you. Given a long term return of say even 8% (note - this question is not a debate of the long term return, and I purposely chose a low number compared to the long term average, closer to 10%) and the current CD rate of <1%, a 1% hit for the commission on the buy side doesn't bother me. The sell won't occur for a long time, and $8 on a $10K sale is no big deal. I'd not expect you to save $1K/yr in cash/CDs for the years it would take to make that $8 fee look tiny. Not when over time the growth will overshaddow this. One day you will be in a position where the swings in the market will produce the random increase or decrease to your net worth in the $10s of thousands. Do you know why you won't lose a night's sleep over this? Because when you invested your first $1K, and started to pay attention to the market, you saw how some days had swings of 3 or 4%, and you built up an immunity to the day to day noise. You stayed invested and as you gained wealth, you stuck to the right rebalancing each year, so a market crash which took others down by 30%, only impacted you by 15-20, and you were ready for the next move to the upside. And you also saw that since mutual funds with their 1% fees never beat the index over time, you were happy to say you lagged the S&P by .09%, or 1% over 11 year's time vs those whose funds had some great years, but lost it all in the bad years.
If you buy a gold brick and put it in a pillow, after one year you still have one gold brick. People may value it more than before or less then before, but it's still the one gold brick you had. If you buy a cow and put it on a pasture, after one year you have a fatter cow and plenty of milk. You now have more of the cow and milk you didn't have before. Now that's an investment.
There is none, whatever sector you invest in will be subject to cyclical market difficulties, however alpha can be generated from two sources: Timing and selection.  Its much easier to get the timing done over a long period of time.
In the case of VFIAX versus VOO, if you're a buy-and-hold investor, you're probably better off with the mutual fund because you can buy fractional shares. However, in general the expense ratio for ETFs will be lower than equivalent mutual funds (even passive index funds). They are the same in this case because the mutual fund is Admiral Class, which has a $10,000 minimum investment that not all people may be able to meet. Additionally, ETFs are useful when you don't have an account with the mutual fund company (i.e. Vanguard), and buying the mutual fund would incur heavy transaction fees.
Let's start with the chart comparing LS80 to the S&P -   Both have dividends not reflected in these returns. After adding 10% or so, the S&P during these 5 years was +55% or a bit more. As a result, the advisor lags the S&P by about 1% which makes sense. One of the problems with the nature of the question is not being able to analyze the portfolios, your's vs the VG80, for risk-adjusted return. The return your advisor got you is great if the risk (volatility) is lower than the funds or indexes you're comparing to.  In the end, 4 years may not be long enough to make a proper comparison.
I agree with others here that suggest that you should be taking higher risk since it is repaid with higher returns. You have 40 years or so to go before you might switch to safer but lower return funds. I suggest that you look at the Morningstar rating for the funds you are considering: http://www.morningstar.com/ A fund rated five stars means that the fund performs in the top 20% compared to all similar funds. I prefer five star funds. Next, check the management fees. Here is an example from one of the funds you mentioned; https://www.google.com/finance?cid=466533039917726 Next, I suggest you compare how each fund has performed compared to a benchmark. Here are some common indices:  Compare an equity fund to, for example, the S&P 500. Has your fund beat or closely matched the S&P for 1, 5 and 10 years? If not, you may as well buy an index fund, such as SPY.
Some years your portfolio may perform better than the benchmark, and some years it may be the other way around.  Without a benchmark you will never know. And by the way if you choose poorly, you will never beat the benchmark. If the benchmark goes up 20% but your fund/investment only went up 3% you did make money, but you might want to reevaluate your strategy.
"The time horizon for your IRA is years or decades, therefore there is little evidence that there is a benefit to waiting for the ""perfect time"" to invest.  Unless you plan on making only one or 2 years of investments now and then waiting till retirement; the other deposits you will make over the decades will have a greater influence on returns.  If you are going to search for the perfect time to invest in your index fund, pick a deadline. ""I will take the first sign better than X but will not wait beyond Y""."
They are actually both undergraduate texts; however, Investments is FAR more complex.   Essentials of Investments really waters down the statistical and mathematical notation while Investments does not.  Investments also has an entire section (4-5 chapters) called options, futures, and other derivatives while Essentials of Investments does not.   [Of course, if you want to learn about options, futures, and other derivatives, there is a seminal book by John Hull with that exact title.] That notwithstanding, neither book is sophisticated enough to be considered a true graduate school textbook in quantitative investment theory.  No grad schools worth their salt are going to rely too heavily on Investments in a specialized finance curriculum.   It's a great book to start out, though.
A quick Excel calculation tells me that, if you are earning a guaranteed post-tax return of 12% in a liquid investment, then it doesn't matter which one you pick. According to the following Excel formula: You would be able to invest ₹2,124 now at 12% interest, and you could withdraw ₹100 every month for 24 months.  Which means that the ₹100/month option and the ₹2100/biennium option are essentially the same. This, of course, is depending on that 12% guaranteed return.  Where I come from, this type of investment is unheard of.  If I was sure I'd still be using the same service two years from now, I would choose the biennial payment option. You asked in the comments how to change the formula to account for risk in the investment.  Risk is a hard thing to quantify.  However, if you are certain that you will be using this service in two years from now, you are essentially achieving 13% in a guaranteed return by pre-paying your fee.  In my experience, a 13% guaranteed return is worth taking.  Trying to achieve any more than that in an investment is simply a gamble. That having been said, at the amount we are talking about, each percent difference in return is only about ₹22.  The biggest risk here is the fact that you might want to change services before your term is up.  If these amounts are relatively small for you, then if there is any chance at all that you will want to drop the service before the 2 years is up, just pay the monthly fee.
If your returns match the market, that means their rate of return is the same as the market in question. If your returns beat the market, that means their rate of return is higher. There's no one 'market', mind you. I invest in mutual funds that track the S&P500 (which is, very roughly, the U.S. stock market), that track the Canadian stock market, that track the international stock market, and which track the Canadian bond market. In general, you should be deeply dubious of any advertised investment option that promises to beat the market. It's certainly possible to do so. If you buy a single stock, for example, that stock may go up by 40% over the course of a year while the market may go up by 5%. However, you are likely taking on substantially more risk. So there's a very good chance (likely, a greater chance) that the investment would go down, losing you money.
One reason why you may have gotten this advice is that stocks have an expected real return over time, while commodities do not. Therefore, when gambling on individual stocks, odds are in your favor that they will ultimately go up over time. You may do better or worse than the market as a whole, but they will likely go up as the whole market, on average, rises over time. Commodities, on the other hand, have no expected real return. It is more zero-sum. In fact, after costs, a real loss should be expected on average, making gambling in here more risky.
Cheaper would refer to the fees of a fund rather than the share price, IMO. Are 2 quarters worth more or less than 10 nickels? This is another way to express your question though most open-end funds bought directly from the fund family or through fund supermarkets would do fractional shares that may be better than going through ETFs though there can be some brokers like Sharebuilder that used to do fractional shares though not necessarily having the best execution as I recall.
It depends on your goals. Without knowing more than the fact that you live in Mexico (and therefore presumably have future expenses in pesos) and that you are concerned about the purchasing power of pesos, I would suggest an inflation-linked peso-denominated investment, if one is offered.
If you have an investment horizon of, say, 10 years, then I would throw stocks into the mix, and if you're saving for retirement, then I would go all in to stocks. In the part of the world where I live in, money market funds generally have better return than bank savings, and better diversification too. However, your 2.8% interest sounds rather high (the money market fund I have in the past invested in currently yields at 0.02%, but then again I live in the eurozone), so be sure to get estimates for the yields of different risk-free assets. So, my advice for investing is simple: risk-free assets for short time horizon, a mixture of stocks and risk-free assets for medium time horizon, and only stocks for long time horizon. In any case, you need a small emergency fund, too, which you should consider a thing separate from your investments. My emergency fund is 20 000 EUR. Your 50 000 AUD is bit more than 30 000 EUR, so you don't really have that much money to invest, only a bit more than a reasonably sized emergency fund. But then again, I live in rental property, so my expenses are probably higher than yours. If you can foresee a very long time horizon for part of your investment, you could perhaps invest 50% of your money to stocks (preference being a geographically diversified index fund or a number of index funds), but I wouldn't invest more because of the need for an emergency fund."
"It is called ""Opportunity Cost.""   Opportunity cost is the value you lose because of a decision you made.   This is the book definition from Investopedia. The difference in return between a chosen investment and one that is necessarily passed up. Say you invest in a stock and it returns a paltry 2% over the year. In placing your money in the stock, you gave up the opportunity of another investment - say, a risk-free government bond yielding 6%. In this situation, your opportunity costs are 4% (6% - 2%)."