Credit cards:Are a cost effective way of financing investment purchases.Have interest payments that are not tax deductible.Typically have lower interest rates than home equity loans.Often have 3 month grace periods on new purchases.
A limit order:Is used to protect a profit if it is a limit order to buy.Is used to execute a sell at a specific price or lower if possible.Is an order to buy or sell at a specific price or better and can be good till canceled.Is an order to be executed at the best price available and is not known until after confirmation is received.
Gold may be a good investment if:Inflation is expected to increase.You like the color.World peace comes to pass.Foreign governments sell their gold reserves.
A prudent investor:Does not have to consider the tax effect of long-term gains.Evaluates his/her investments on an after-tax basis.Studiously avoids income-shifting among funds.Knows that a drop in the dividend payout signals a stronger firm.
Investments in CDs:Are riskier than investments in stocks.Are inferior to investments in 8-tracks and vinyl records.Are always tax deferred.Are insured by the FDIC, but have generally underperformed stock investments over the long run.
The strength of economic growth in the United States is reported as changes in the:The Gross Domestic Product (GDP).The National Association of Securities Dealers Index (NASDAQ).The Dow Jones Industrial Average (DJIA).The Wealth Index of Investments and Inflation (WIII).
The January Effect:Is the influence on the market of the mutual funds’ performance reported in December.Is another name for the Superbowl anomaly believed to affect stock prices.Is the result of several studies regarding inexplicably higher returns during January.Supports the predictabilityof cyclical prices determined by chaos theory.(Portfolio Construction, Management and Protection by Robert A. Strong, p. 182.)
Dividends are taxed:At the investor’s marginal income tax rate.At a maximum rate of 15%.Only when the stock is sold.Dividends are never taxed.
