Financial Ideas About Penny Stocks And Why Everyone’s Talking About Them.

Penny stocks are considered by the financial industry regulators, like the SEC and FINRA, to be securities which trade “over-the-counter”, as opposed to on a major stock exchange like the New York Stock Exchange (NYSE) or NASDAQ.

An example (as of this writing) would be Titan Pharmaceuticals (TTNP).  If you go to Google Finance, you’ll see it listed as Public, OTC:TTNP.

(Important Note: I AM NOT RECOMMENDING THIS STOCK, JUST PROVIDING AN EXAMPLE).  By comparison the well-known Google itself shows up on Google Finance as Public, NASDAQ:GOOG.  (NOT RECOMMENDING THAT EITHER).

The regulators also consider any stock priced at less than $5.00 per share to be a penny stock.  The threshold used to be $1.00 per share, which makes more sense, but inflation has caused the minimum price to be higher, while the name just stuck.

Penny stocks have most often been viewed as having higher than normal risks.  They typically represent ownership in a company which has struggled to make a mark in its business, or which perhaps faces stiff competition without anything protecting it or differentiating it from competitors.  Another possibility might be a company which makes a product which becomes outlawed or infringes on another company’s patents.

These very low-priced stocks are not for the faint of heart, or perhaps even the otherwise normally brave!  They are definitely not something you should Read More …

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Investing In 3-D (IMAX, NWS, DWA, CKEC)

As the 3-D trend continues to grow, these are the stocks that will benefit the most. (IMAX, NWS, DWA, CKEC)

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Top 4 Strategies For Managing A Bond Portfolio

Find out how these strategies work and how you can put them to work for you.

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It’s time to add Apple to the Dow

Apple is no longer some plucky tech underdog scrambling to catch up with Microsoft. So isn’t it time for the company to join Microsoft in the venerable Dow Jones industrial average?

Technorati Tags: Financial Ideas, Investing strategy, Retirement

Goldman Sachs Isn’t The Next Enron.

Investors abruptly slammed on the brakes Friday after the SEC’s bombshell allegations of fraud against Goldman Sachs were announced.

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Financial Ideas: Stocks That Will Deliver

UPS’s latest earnings are worth talking about.

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Financial Idea: Should I Be Buying Gold Or Looking At Emerging Market Stocks?

Yes, if you don’t think what you’re doing currently is risky enough.

Both types of investments are what are known as “niche investments”, along with other examples such as high-yield or “junk” bonds, and they can seriously mess up your portfolio by introducing wide price swings that make it very unpleasant to stay invested for the long term.

Warren Buffett has said, among multitudes of things, that you should invest in something with the idea that you can’t trade back out of it tomorrow or anytime in the next three years.  In other words, that you should have the confidence in what you’re getting into that you can, while not ignoring it, be comfortable with holding it for the long term.

Taking that approach is going to keep your investment costs down for one thing, even when you’re paying a commission to trade.  It’s also likely to help you keep your stress levels down.  If you’re the sort of person who has to read the financial pages or watch the financial TV shows every day, you’ve gotten too close to the picture.  Imagine being in an art gallery and standing with your nose two inches away from a painting and pretending to able to objectively evaluate it.  That’s roughly the same thing.

Now, if you really like gold and/or emerging market stocks Read More …

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I Lost My Job Or I Changed Jobs – Should I Rollover My 401K?

Yes you should.

Why?  Simply put, because as great as the 401K idea is, it can limit your choices significantly.  You might not be able to get the best possible investments out there.

Think about it – if you worked for a reasonably large company, then while you were employed, you probably didn’t feel like you had much say in the investments that were offered to you and your fellow employees.  Technically, the benefits director is supposed to take into account all employees opinions, but that doesn’t mean that a given opinion makes sense or that any change will happen.

Also, contrary to what many people think, your 401K isn’t free.  It costs money to be invested in the choices made available to you through your company plan.  Big 401K providers don’t do this out of the goodness of their hearts, after all!  In fact, in 2009 Senators Tom Harkin (D-IA) and Herb Kohl (D-WI) introduced and had passed the Defined Contribution Fee Disclosure Act of 2009 to force companies to disclose these fees among other things.

Another thing you don’t have with your company 401K is Read More …

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Preparing To Tap Into Retirement Income

You need to plan ahead to ensure a long and happy future away from the daily grind.

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How To Handle A 401(K) Rollover To IRA

A 401(K) account is an employer-based retirement account and is governed by federal regulations and choices your employer makes for you regarding investments and 401(K) withdrawals. For example, there are limits on what you can invest in, limits on loans and withdrawals in both amount and purpose. There are also penalties if you withdraw money under certain circumstances.

401(K) rollovers are considered an IRA account, technically. They are both investment accounts set up for retirement. However an IRA account can be set up outside your employment, and could be invested in many more types of investment vehicles than a 401(K). Contributions to both a 401(K) and IRA are made before tax, and you pay taxes instead on the money you withdraw when you are retired. You can do a 401k withdrawal and also an IRA withdrawal both before and after retirement age, but if you withdraw before you reach the statutory age limit, there can be penalties and taxes due and owing. They also both have contribution limits, although in a 401(K) you can contribute more than to a traditional IRA account. Confused yet?

When you leave your employer, you have the option to leave the 401(K) behind with the employer’s fund manager, or you can instead do what’s known as roll over your 401(K) to a new brokerage. Your rollover account is often referred to by brokers as “rollover IRA”, because once you roll over into a new account, the new account is not technically a 401(K) account any longer. This instead is a traditional IRA to which you have moved your 401K() fund balances.

A 401k rollover to IRA can benefit you, because the rules get relaxed on the new account. You are not prevented from withdrawing money, as you might have been at your old job. You will still be responsible for paying the taxes and penalties, which can be substantial at nearly 40% of the withdrawal amount; for that reason a 401k withdrawal is never recommended except for emergencies, or if you qualify for an exception such as paying for college (you will still owe taxes). But when you rollover your account, you can now invest as you see fit, and are not limited to the investments your employer has chosen for you. You can also invest your 401k in cash vehicles such as U.S. Treasury notes or T-bills, or money market funds and CDs. The choice is now yours, not your employer’s.

One other reason to roll over is that you can convert into a Roth IRA account when you roll over your 401k. Money you invest in a Roth IRA is invested with after tax dollars, but when you retire, you pay no taxes on the money you take out. This can be a significant savings – you could pay less by paying taxes today instead of in the future when the value of your account has grown. When you covert from a tax-deferred account into a Roth however, you will owe taxes on the money you previously invested with a tax-deferral, so check with your fund manager for conversion details. Right now, there are regulations which allow you to pay the taxes owed over time, so it’s not such a big hit all at once.

Taking your 401k rollover to an IRA makes sense on a number of levels. By moving your retirement funds today, you can gain control over your financial future and improve your returns.

Technorati Tags: Financial Ideas, Investing strategy, Retirement