Some of the bad brokerages might charge you to receive dividends reducing small dividends to zero. But the better ones don't do it so you can get very small dollar amounts deposited.

Seems weird that they would charge, considering companies will just post the dividends as a cheque for free.

Maybe it's just a remnant from the old days where brokerages could charge whatever they want for whatever they do.

I am a UK resident and have an account with Zecco. They withhold a portion of my dividends as part of a "withholding tax". AFAIK I'm not above the capital gains taxation level in the UK, so the tax offices have no right to a part of my dividends. Who do I have to take issue with to get that money back - Zecco, US IRS or UK HM Revenue & Customs?

Are there any UK discount brokers for passive investors where that wouldn't be a problem?

I thought about IB but I won't generate the $120 in commissions to make it worth while.

Are you talking about dividends from companies in your own country or USA companies?

We have a foreign tax withholding when we buy foreign stocks, we get most of it back at tax time though.

Check in with the British version of the IRS. There probably is a tax treaty handling dividends.

Yea, judging by the OP I dont think my question warranted its own thread. Basically, I've had $10,000 sitting in my saving account for 2 years gaining only $10 and some change in interest each month. Considering the state of the US ecomony/stock market thats currently taking place. What do you believe would be the best way to invest or more importantly increase my capital each year? I know its a very broad question to ask, but Im a newb when it comes to finances and I could really use some sort of guidance/help.

If somebody would be so kind as to explain something to me I would appreciate it. I'm trying to wrap me head around deferred tax assets and deferred tax liabilities. I read the wiki and investopedia and I still don't get it. Here's the investopedia for the liability:

Does this mean that a company put something in motion, and by the time that thing is done they will have to pay X total in taxes, but they don't have to pay it all in the current year so they defer what they don't pay?

And as far as deferred tax assets go I have no idea.

If something says: "S&P 500: 850.75" what does this mean? I know what the S&P 500 is, I just don't know what 850.75 represents?

Likewise, if something says 2007A and 2008E, what do the A and E mean? Does E mean expected or estimate?

So....

I think I know the general idea behind a good trade: You are trying to find a stock is priced, for some reason, away from what the market says it should be priced. Sometimes, a single market player will be buying or selling the the stock away from what it is worth and a good trade would be to profit from that player's action.

But, what makes a good speculation a good speculation? What about longer term positions? What's the right way to phrase that objective there?

I was considering buying stocks like AA and DRYS because their 5 month charts seem to look like common trade setups. but, I'm thinking there are more factors in holding longer term positions than intra day trades? I suppose I need to look at some ratios and such and derive some kind of story based on more fundamental factors?

I am a newbie so be gentle. I just don't know how to think about positions. What makes a position a good position to have?

Answer:
2007 Actual
2008 Estimate

Can a company issue more common stock whenever it wants? If so, doesn't this drive down the stock price per share? For example, let's say the XYZ Company has 100,000 shares outstanding at $10 per share. If they needed to raise more capital, could they just decide to issue another 50,000 shares? Wouldn't this drive down the price, since one share would now represent 1/150,000 of a stake in the company (were before it was 1/100,000 of a stake in the company)? Or would the price not necessarily drop, since they'll invest this new capital and could hypothetically put it to use in a way that increases their earnings enough to compensate for the fact that you own a smaller share of the company? Any additional insights on this topic would be appreciated.

Generally a company can't issue stock whenever they want to. But getting permissions to do it is almost always trivial and it could lead to shareholder destruction.

Now on to the question if dilution makes the shares worth less: it depends. If the new shares are priced too low it hurts the current holders of shares. If they're too high it hurts the new shareholders but rewards the old.

To illustrate I'll use a ridiculous example. Say we have a company with no assets and liabilities but $100k cash. There are also 100k shares outstanding. You could say that each share is worth $1. Now the management is able to sell 50k shares to a dumb hedgefund for $2 a share. Now the company has $200k cash and 150k shares outstanding. This makes one shares worth $1.33. But if they would sell the new shares at $0.5 the company will have $125k cash and making each share worth $0.83.

Now in the real world it depends on a lot of factors like profitability and what not. So in real life it depends. Palm would be a real life example (imo) where the dilution made sense for the old shareholders. They sold the new shares at $16.5 which is an amazing price as the company is probably worth under $10 (imo, again).

A nice way to see if a share issue is worth is to see it this way: if a company is issuing shares it's shorting itself and if it's buying back shares it's going long itself. So if you think it's a good idea to short the company the issue is probably a good idea. But don't forget the reason for the issue: they might be picking up some cheap assets with the money, so again: it depends.

Please explain.

Don't take it literally.

It's selling new shares and receive money from it. If they would buy the shares back at a lower price they would've made money.

One of the casino operators did it a year or two ago: they sold new shares as they thought the company was overvalued, later they bought it back.

Ok, that kinda makes sense. I guess I figured that usually if they were selling shares it was because they were trying to raise capital and it was the most efficient way, but I guess it would also make sense if they thought the stock was overvalued.

Yes, most of the time they use it to raise capital to invest in something. I just used as an example so it's easier to remember.

Any chance you know the answer to this question?

If something says: "S&P 500: 850.75" what does this mean? I know what the S&P 500 is, I just don't know what 850.75 represents?

that's the price of the s&p 500 index

i dunno much about investing but some company i do freelance work for the past 15 months set me up with a money market account where i put in like $600 a quarter they put in 1k or something. it is an ING money market account and their contributions vest after 1 year.

i never paid attention to the balance until today when i got an email from ING i have a new statement and i checked it for some reason.. it says stability of principal 100%

Contributions since Inception $13,214.37
Investment Earnings -$15.17
Account Balance on 12/31/2009 $13,191.45

Since the principal is 100% insured why would the account balance be below the contributions?

Because investment earnings is negative?

Find out what investment earnings means and you have your answer.

Does vangaurd have any funds that are commodity funds?

What does price/yield mean for bonds?

Can I use this information to find the risk-free rate of return (i.e. the rate of return on a 3-month US Treasury Bill)? If so, how exactly does one do it? I see this but I'm not sure if I can use it to find the risk-free rate of return.

Wait, should I actually be using the 12-month T-Bill?

I had some questions about an article about the relationship between treasuries and the payroll number:

1. Whats the relationship between treasuries and the payroll number? The article writes: "Treasuries fell, heading for a weekly loss, before a U.S. report that economists said will show a 23-month run of job losses ended in December."
So its inverse, but why? Is it because as the economy gets better, fewer people will want to buy t-bills because stocks become a better investment?


2. "The drop pushed 10-year yields up to within 5-basis points of the highest level sine June before the report that is forecast to show payrolls were unchanged..."
So I guess as the economy improves, yields have to increase to attract buyers for T-bills? Otherwise the public will just invest in stocks? Or is it because as the economy improves, the Fed raises rates to curb possible inflation, and that increases the T-Bills yields?

3. Whats the major factor influencing t-bills? It seems that both the economy doing better and the Fed increase rates will have negative effects on current T-Bill and T-note prices. If the Fed raises rates to curb inflation, current T-Bill and T-note prices go down because they become less attractive at their interest rates. As the economy does better, people will demand less T-Bills and T-Notes opposed to stock. But, which of these is the primary/most important factor? Which is stronger? If the economy improves but the Fed doesn't raise interest rates to curb inflation... do T-Notes and T-Bill prices fall? Does consumer demand for these T-Notes and T-Bills affect their prices? Or does it just track the Fed rates mostly?