vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"Not a lot, directly. Your biggest direct risk is that you could buy the debt, and buy it at too high a price (i.e. too low an interest rate) and not make as much money as you ought (and maybe not enough to cover inflation, especially if you buy long-term bonds at low interest rates.) The indirect risks are mostly that the debt could weigh on economic growth: There is also a question of monetary policy, inflation, and interest rates set by the Federal Reserve. Theoretically the government could be tempted to keep interest rates low (to save money) and buy its own bonds (""printing money""), which could cause inflation. Theoretically, they shouldn't, as price stability is one of the Fed's primary mandates. But if they did, inflation makes everything less predictable and is generally obnoxious, which makes everything more risky and drags on the economy. Also, if the nominal value of an asset rises due to inflation, you will likely need to pay taxes on that at some point if you sell it, even though its real value is the same."
Dividend Stocks like any stock carry risk and go both up and down.  It is important to choose a stock based on the company's potential and performance.  And, if they pay a dividend it does help. -RobF
Fundamentally, it's no different than normal.  A risky entity must entice investors with higher interest rates than less risky entities.  We're just in such a low interest rate environment that the rate spread now dips below zero and very low risk entities can issue debt with a negative coupon. Though I agree that this makes no sense and the world's gone mad.
This is where a fee-only financial planner can really be helpful - they can run a bunch of scenarios in planning software that will show you different retirement scenarios based on a variety of assumptions (ie what if you only get 60% of the promised pension, etc). This is probably not as much of an issue if you are an equity partner, or if the company fully funds the pension in a segregated account, or if the pension is defined-contribution, but most corporate pensions are just a general promise to pay you later in the future with no real money actually set aside for that purpose, so I'd discount this in my planning somewhat. Fund/Stock Selection Generally speaking, most investment literature agrees that you're most likely to get the best risk-adjusted returns over the long term by owning the entire market rather than betting on individual winners and losers, since no one can predict the future (including professional money managers). As such, I'd recommend owning a low-cost index fund over holding specific sectors or specific companies only. Remember that even if one sector is more profitable than another, the stock prices already tend to reflect this. Concentration in IT Consultancy I am concerned that one third of your investable assets are currently in one company (the IT consultancy). It's very possible that you are right that it will continue to do well, that is not my concern. My concern is the risk you're carrying that things will not go well. Again, you are taking on risks not just over the next few years, but over the next 30 or so years until you retire, and even if it seems unlikely that this company will experience a downturn in the next few years, it's very possible that could change over a longer period of time. Please just be aware that there is a risk. One way to mitigate that risk would be to work with an advisor or a fund to structure and investment plan where you invest in a variety of sector funds, except for technology. That way, your overall portfolio, including the single company, will be closer to the market as a whole rather than over-weighted in IT/Tech. However, if this IT Consultancy happens to be the company that you work for, I would strongly recommend divesting yourself of those shares as soon as reasonably possible.
It's an artifact of risk-neutral pricing, but the intuition is this:  A call option can be viewed as a levered equity position - meaning, you can get the same exposure by borrowing money and buying the stock.    Say you can buy some call options for $150 with a position delta of 1 (so it looks just like the stock).  You could also buy the stock outright for $1000 (by borrowing $850 at the risk-free rate and using your $150 cash).  If the risk-free rate rises, your cost of carry on the stock position increases.  In the case of the call option, the change in price can be viewed as the cost of *leverage* increasing.
"Diversification is spreading your investments around so that one point of risk doesn't sink your whole portfolio. The effect of having a diversified portfolio is that you've always got something that's going up (though, the corollary is that you've also always got something going down... winning overall comes by picking investments worth investing in (not to state the obvious or anything :-) )) It's worth looking at the different types of risk you can mitigate with diversification: Company risk This is the risk that the company you bought actually sucks. For instance, you thought gold was going to go up, and so you bought a gold miner. Say there are only two -- ABC and XYZ. You buy XYZ. Then the CEO reveals their gold mine is played out, and the stock goes splat. You're wiped out. But gold does go up, and ABC does gangbusters, especially now they've got no competition. If you'd bought both XYZ and ABC, you would have diversified your company risk, and you would have been much better off. Say you invested $10K, $5K in each. XYZ goes to zero, and you lose that $5K. ABC goes up 120%, and is now worth $11K. So despite XYZ bankrupting, you're up 10% on your overall position. Sector risk You can categorize stocks by what ""sector"" they're in. We've already talked about one: gold miners. But there are many more, like utilities, bio-tech, transportation, banks, etc. Stocks in a sector will tend to move together, so you can be right about the company, but if the sector is out of favor, it's going to have a hard time going up. Lets extend the above example. What if you were wrong about gold going up? Then XYZ would still be bankrupt, and ABC would be making less money so they went down as well; say, 20%. At that point, you've only got $4K left. But say that besides gold, you also thought that banks were cheap.
Sorry to be boring but you have the luxury of time and do not need high-risk investments. Just put the surplus cash into a diversified blue-chip fund, sit back, and enjoy it supporting you in 50 years time. Your post makes me think you're implicitly assuming that since you have a very high risk tolerance you ought to be able to earn spectacular returns. Unfortunately the risks involved are extremely difficult to quantify and there's no guarantee they're fairly discounted. Most people would intuitively realise betting on 100-1 horses is a losing proposition but not realise just how bad it is. In reality far fewer than one in a thousand 100-1 shots actually win.
But there are many more, like utilities, bio-tech, transportation, banks, etc. Stocks in a sector will tend to move together, so you can be right about the company, but if the sector is out of favor, it's going to have a hard time going up. Lets extend the above example. What if you were wrong about gold going up? Then XYZ would still be bankrupt, and ABC would be making less money so they went down as well; say, 20%. At that point, you've only got $4K left. But say that besides gold, you also thought that banks were cheap. So, you split your investment between the gold miners and a couple of banks -- lets call them LMN and OP -- for $2500 each in XYZ, ABC, LMN, and OP. Say you were wrong about gold, but right about banks; LMN goes up 15%, and OP goes up 40%. At that point, your portfolio looks like this: XYZ start $2500 -100% end $0 ABC start $2500 +120% end $5500 LMN start $2500 +15% end $2875 OP start $2500 +40% end $3500 For a portfolio total of: $11,875, or a total gain of 18.75%. See how that works? Region/Country/Currency risk So, now what if everything's been going up in the USA, and everything seems so overpriced? Well, odds are, some area of the world is not over-bought. Like Brazil or England. So, you can buy some Brazilian or English companies, and diversify away from the USA. That way, if the market tanks here, those foreign companies aren't caught in it, and could still go up. This is the same idea as the sector risk, except it's location based, instead of business type based. There is an additional twist to this -- currencies. The Brits use the pound, and the Brazilians use the real. Most small investors don't think about this much, but the value of currencies, including our dollar, fluctuates.
"As you note, your question is inherently opinion-based. That said, if I were in your situation I would sell the stock all at once and buy whatever it is you want to buy (hopefully some index ETF or mutual fund). According to what I see, the current value of the HD stock is about $8500 and the JNJ stock is worth less than $500. With a total investment of less than $10,000, any gain you are likely to miss by liquidating now is not going to be huge in absolute terms. This is doubly true since you were given the stock, so you have no specific reason to believe it will do well at all. If you had picked it yourself based on careful analysis, it could be worth keeping if you ""believed in yourself"" (or even if you just wanted to test your acumen), but as it is the stock is essentially random. Even if you want to pursue an aggressive allocation, it doesn't make sense to allocate everything to one stock for no reason. If you were going to put everything in one stock, you'd want it to be a stock you had analyzed and picked. (I still think it would be a bad idea, but at least it would be a more defensible idea.) So I would say the risk of your lopsided allocation (just two companies, with more than 90% of the value in just one) outweighs any risk of missing out on a gain. If news breaks tomorrow that the CEO of Home Depot has been embezzling (or if Trump decides to go on the Twitter warpath for some reason), your investment could disappear. Another common way to think about it is: if you had $9000 today to buy stocks with, would you buy $8500 worth of HD and $500 worth of JNJ? If not, it probably doesn't make sense to hold them just because you happen to have them. The only potential exception to my advice above would be tax considerations. You didn't mention what your basis in the stock is.
Think of it this way:  1) You buy 1k in call options that will let you buy 100k of stock when they expire in the money in a year.   2) You take the 99k you would have spent on the stock and invest it in a risk free savings account.  3) Assume the person who sold you the call, immediately hedges the position by buying 100k of stock to deliver when the options expire.  The amount of money you could make on risk free interest needs to be comparable to the premium you paid the option writer for tying up their capital, or they wouldn't have made the trade. So higher risk free rates would mean a higher call price.   NOTE: The numbers are not equal because of the risk in writing the option, but they will move the same direction.
"Has anyone done this before? I'm sure someone has, but it doesn't completely remove any price risk.   Suppose you buy it at 10 and it drops to 5? Then you've lost 5 on the stock and have no realized gain on the option (although you could buy back the option cheaply and exist the position). To completely remove price risk you have to delta hedge.  At ATM option generally has a delta of 50%, meaning that the value of the option changes 0.50 for every $1 change in the stock. The downside to delta hedging is you can spend a lot on transaction fees and employ a lot of ""buy high, sell low"" transactions with a highly volatile stock."
The difference is downside risk. Your CD, assuming you are in the US and the CD is purchased from a deposit bank, will be FDIC insured, your $10,000 is definitely coming back to you.  Your stock portfolio has no such guarantee and can lose money.  Your potential upside is theoretically correlated to the risk that some or all of your money may not be returned to you.
&gt; plus they get to be the Wal-Mart of the internet and outprice all of their competitor  It's all [about market cap](http://evonomics.com/amazon-accounting-corporate-profits-rich-peoples-income-invisible-bezos/) not the appearance of investment.  They turn most of their profits into dividends, so they get taxed (from investors) once at a 20% rate, rather than a 35% then 20% (48% total).  They are basically exploiting a glitch where dividend payments are tax deductible to the company, rather than (rightfully) being considered profits being collected by the owners.
On average, the market will be down 1 year out of 4. 26 of the last 100 years on the S&P were negative. The Roth conversion offers a unique opportunity to convert early in the year, and decide at tax time next year whether you are happy with the result. Of course, if your fund or stock is up, you are likely better off, paying the $1250 tax on the $5000 conversion that's now worth $6000 or more. If it's down, you can recharacterize. The volatility of the market helps makes this process more attractive. If my converted shares dropped quite a bit, the recharacterization is far more desirable than a small drop or no drop at all. Of course we don't wish for that drop, any more than we wish for our house to burn down to make our insurance pay off.  To be clear, you'll benefit from a conversion she the market goes up. The downturn only lets you reverse the bad move.
In Switzerland you should have access to many brokers with fair rates, e.g. Interactive Brokers. Going through them you then put the money in various Swiss stocks like Roche, Novartis, Swisscom, Credit Suisse, Logitech, etc. No stock should be more than 10% of the total. Since you pay 0% taxes on investment profits, you really should invest.  By going through a broker instead of your bank, you can cash out at any time without losing outrageous fees for the stock commissions (often 2% for banks, around 0% for brokers).  If you're employed you can also ask your employer to increase the amount of your salary that goes to the pension (2. Säule), which is not limited like the 7000 you mentioned (3.Säule).
"I was just going by [this](http://evonomics.com/amazon-accounting-corporate-profits-rich-peoples-income-invisible-bezos/) source and many like it.  They might not be reffering to _literal_ dividends but increased stock value.  Ultimately, I was responding to that idiot who said ""But a business making no profits to avoid tax is the worst tax planning advice I have ever seen!""..."
This is old and incorrect already, walgreens has already said they will not be seeking a tax inversion.  I know because I was holding the stock on the day they issued this press release and the markets response was BRUTAL, 18% off the top overnight.
I don't think they have expressed their ideas [as clearly as I did](http://en.wikipedia.org/wiki/Reductio_ad_absurdum), no.  I managed, in a sentence, to make two points: 1) if people who make money in the stock market don't like when that gain is taxed, then logically someone who likes when that gain is taxed does not make money in the stock market, and 2) it is ridiculous for Bob to think he is entitled to 5 cows if John sells Jim ten thousand heads.
I came up with a real way. I saw once the market be so dumb as to allow this to work. Inflation rate = 2.5%. Home interest rate = 3%. Tax deduction = 1%. Money spent on inflation-adjusted I bonds (at the time these paid 0% net, that is 2.5% gross). Result, .5% profit after accounting for inflation. The kicker: Uncle Sam's I bonds are tax free. Sure it's not possible today, but the rates occasionally drop low enough.
The most tax efficient way to get some cash would be to sell some stocks from the Fidelity account that have the lowest capital gains. The tax will typically be 15% of the capital gains. This will be a one-time cost which should save you money compared to paying 7.5% on the loan year after year. Tax on selling the stock options will probably be higher, since you imply there would be high capital gains, and some of the proceeds might even be taxed as income, not capital gains.
Read about [Pigovian Taxes](http://en.wikipedia.org/wiki/Pigovian_tax).    &gt; A Pigovian tax is a tax levied on a market activity that generates negative externalities. In economics, an externality is a cost or benefit, not transmitted through prices, incurred by a party who did not agree to the action causing the cost or benefit  For example someone polluting incurs costs on you to your health and quality of life.
"You'd want the money to be ""liquid"" and ready for you to use when tax time comes around. You also don't want to lose ""principal"", i.e. if you put it into stocks and have the value of what you put in be less than what you invested—which is possible—when you need the money, again, at tax time. That doesn't leave you with many good choices or an amazingly good way to profit from investing your savings that you put aside for taxes.  CDs are steady but will not give you much interest and they have a definite deposit timeframe 6 months, 1 yr, 2 yrs and you can't touch it. So, the only reasonable choice you have left is an interest bearing checking or savings account with up to 1% interest (APR)—as of this writing Ally Bank offers 1% interest in an online interest savings acct.—which will give you some extra money on your deposits. This is what I do."
"C'mon, Bill - you're better than this.  Aside from the fact that he accumulated his personal wealth through ruthless profiteering and tax shelters, it's just a flat out bad idea.  It was an even worse idea when some neckbeard actor and commie guitarist started pushing it.  All this tax will do is hamper the ability to do business (i.e., market liquidity), and end up being shouldered by small banks and in the end, the consumer.  Big banks will find their ways around this, no problem, but the boutique capital firms will surely struggle.    This isn't just a ""oh, we'll institute this micro-tax and everyone is happy!"" - they want to tax the underlying value of assets on each trade.  This creates a direct impact to free-market trading which I don't believe they've accounted for (which is shocking, really).  It's a tax on the top and bottomline, and a general tax on the actual execution point of an entire industry.  It's a half-baked idea that shouldn't have gotten as far as it did."
It's not necessarily the case that HFT acts as a tax on small traders. I haven't seen any studies demonstrating that HFT increases the average cost of shares; if anything small investors will be largely unaffected by HFT as it will be random noise to them, sometimes creating a slight increase, sometimes a slight decrease. The people most affected by HFT are institutional investors, whom HFT desks are pretty good at predicting the order pattern of and hence exploiting. They have no interest or capacity to exploit the small guys.
Not a bad strategy. However: If you REALLY want tax efficiency you can buy stocks that don't pay a dividend, usually growth stocks like FB, GOOGL, and others. This way you will never have to pay any dividend tax - all your tax will be paid when you retire at a theoretically lower tax rate (<--- really a grey tax area here).  *Also, check out Robin Hood. They offer commission free stock trading.
&gt; So just by way of anecdote -- when I grew up in my family business, we had this fantastic tax-evasion strategy that my dad employed, which was we invested everything back in the business. &gt; We kept profits to a minimum, because if we had high profits, we would have to pay high taxes. So at every opportunity, we bought another machine or we opened another plant or we hired more people, to try to build long term value through expansion because that was the way you avoided tax. &gt; Dividends were impossibly expensive. Buybacks -- you couldn't do that. Corporate tax rates were very, very high. All of that's gone away, and now you've basically given corporate executives and owners incentives to just suck all the money out of businesses and into their own pockets, and stock buybacks are a really big component of that. &gt; Corporate executives are always complaining about -- well we have to do something with the cash, because there's no place to invest the cash. Well, one of the reasons there's no place to invest the cash is that wages as a percentage of GDP have fallen by so much that workers can't afford to buy anything any more. If instead of doing stock buybacks with that 700 billion dollars, that corporations use that 700 billion dollars to raise wages for workers, those workers would then buy a ton more, which would require capital to go out and expand to meet that demand.
&gt;Going to have to stop you right there. Most Fortune 500 companies pay a LOT of tax. Additionally, they get targeted for audits quite a bit because of their size and complexity. But at the end of the day, if it shows a net profit on their income statement, they're generally paying tax.  True, but they make an effort to create a structure that compartmentalizes profits and maximizes expense. Income tax is a real thing, but it's not the primary vehicle of taxation that some people think it it. They pay more in other taxes, like payroll, social security and other kinds of tax.  &gt;A progressive scale for capital gains will just lead to high-income individuals transferring the form of income to something else.  You're probably right.
Can you show me where? Because pretty sure when obama put a tax to help fund the ACA, the economy thrived, a million doctors were hired, hundreds of hospitals, and thousands upon thousands of walk in clinics we're built. And the stock market thrived more.
Enormous revenue, not profits. Profits would be taxed. Doesn't seem like a problem to me. You can't spend money without realizing the profits - it's wealth on paper. (You can do interesting things like use it for donations to offset current income, as an individual. Or use it as collateral for transactions without actually selling it and realizing the gains.)
&gt; some companies will go into survival mode   Good, that gives their competition time to take market share.  As long as there is money on the table, someone is going to reach for it.  Markets aren't known for their patience.  &gt; It is a disincentive to produce more when there are more burdens on you.   Bullshit, tax burdens cause tax avoidance, they don't touch production as long as profits are still available.
In common with many companies, Microsoft has been engaging in share buyback programmes, where it buys its own shares in the market and then cancels them. It's often a more tax-efficient way to distribute profits to the shareholders than paying a dividend. So there were more Microsoft shares in circulation in 1999 than there are now. See here for information.
Firstly, investors love dividend paying company as dividends are proof of making profit (sometimes dividend can be paid out of past profits too)   Secondly, investor cash in hand is better than potential earnings by the company by way of interest. Investor feels good to redeploy received cash (dividend) on their own   Thirdly, in some countries dividend are tax free income as tax on dividends has already been paid. As average tax on dividend is lower than maximum marginal tax; for some investor it generates extra post tax income   Fourthly, dividend pay out ratio of most companies don't exceed 30% of available fund for paying (surplus cash) so it is seen as best of both the world Lastly, I trust by instinct a regular dividend paying company more than not paying one in same sector of industry