Corporate bonds being corporate generated correlate more closely with the stock market than Govt bonds. On a broad generalization you can come up with about a 75% synch between the two if you chart them out together.

Kinda dumb question but I guess you guys know it better than anyone else on 2p2

Got part of my roll xferred to Stars so I can choose in which currency to keep it (USD, EUR, CAD, GBP), and the currency exchange fee is zero. Given the current situation what currency would be the best choice?

Help with math please!

I am looking at bond prices for the first time after doing some research. However, I am confused about the relation between the coupon % and the yield %.

Every source I can find says: the yield is the coupon divided by the current price. It shows the coupon's relationship to the current price of the bond.

However, the numbers do not add up at all for the bonds I have looked at so far.

For example, Bond #1:
PAR Value: 10,000
Coupon: 8.9%
Price: 13,927
Annual Yield: 5.1%

But $890 / $13,927 = 6.39% ?

Bond #2:
PAR Value: 10,000
Coupon: 9.65%
Price: 14,137
Annual Yield: 4.99%

But $965 / $14,137 = 6.8% ?

Thanks for any help!

Look up yield-to-maturity.

Is the expectation of a leveraged ETF 2Xing the S&P500 higher than that of a standard S&P500 ETF if you assume that the expectation the S&P500 is positive?

If it is indeed higher, then how can the ETF companies offer such things?

Because they charge you for operating and financing the thing.

These track daily changes, but suffer from decay due to expenses/fees, so over the long run you lose money.

thanks for the answers,
but I tested something:
create a fictional year if you assume that the expectation of the underlying index is 5% a year (thus 1.05^(1/365)-1 a day)
I assumed the stdev to be 1.5% daily (I suppose it's generally less than that, but whatever)

And then I computed the average value over 1000 years (each being 365 days) and it seemed like using a leverage of 2 did in fact increase the expectation...
expenses were assumed to be 0.7% yearly

What am I doing wrong?

what are you thoughts on oil? will it go up?

You're forgetting financing costs, if you use leverage you borrow. Also, if you had bought October 12th 2007 you would've been broke now. Your standard deviation doesn't tell you that.

aren't the financing costs included in the expense fees (I'm talking about ETFs here)?

I'm not really into these instruments but there is no way that they offer financing at as low as 0.7%. Some one else might answer this better.

0.7% seems like the fees on a standard ETF tracking an index, a leveraged ETF would be much higher.

edit: intuition is probably wrong here though, i may investigate when i get a little time

in fact, even with much higher expense fees (like 2.5%), the expectation seems higher...

What should I invest in if I wanted relatively low risk for the medium-long term but without receiving dividends for tax reasons?

You might want to look at something like the Vanguard Tax-Managed accounts - I think the minimum on those is $10k

But really, avoiding dividends/capital gains completely is going to be next to impossible.

bonds

It's even worse than that....he's charging fees on the notional amount of positions they own.

I am NOT Kidding.

Correct, you may take offsetting positions in other markets to hedge your IR risk. However, that will cost you money. The US T-note markets are about as arbitrage-free as it gets, so you'll be out commissions, fees, b-o spread, and of course the taxes on the winning side. [Hint - that last part suuuuuuucks if you can only deduct $3k in losses.]

If you have real, REAL amounts of money, you can play interesting, legal tax strategies with section 1256 elections and putting some of the trades in Trusts for kids/unrich people. People will also try to market illegal tax strategies w/r/t this topic also.

Municipal Bonds it should be clarified, IMO. At least then they will be federally tax free regardless of what state - and if you get some in the state you live in it is likely to be tax free completely (have to examine that I don't think its true for all states).

Vanguard has some muni-bond funds.

Sort of a random money saving thing that might appeal to some people that post here: if you own Berkshire Hathaway stock and have Geico insurance, you can get an 8% discount on your insurance by calling them and telling them.

Is this on any Geico insurance policy? Seems like it could make adding a lot of policies a really good idea for some people.

Noted, thank you. I'm not moving out of Vanguard, I just have $ in savings I wanted to move to brokerage. If Schwab at least equals Vanguard in low fees I'll go with them since I have checking with them.

Addendum: it appears Schwab also has index mutual funds (SWPPX for example) at low expense ratios, no sales load, no commission through Schwab, etc. Would it be better to use these instead, or is there still a bid/ask spread on them?

I'm not sure. It works with Geico Auto but not Travelers Home Owners through Geico. I believe it'd work on anything that's "primary" Geico Insurance, but not through things that Geico contracts out if that makes sense (I believe they contract out things like home owners insurance, life insurance, etc).

I don't know if this goes here, but I'm looking for a quick answer. If it doesn't get answered then I will go somewhere else.

What is it called when you, after the fact, look back and try to find an explanation for what just happened? Sort of like an, "I should have known..." I'm thinking it's something along the lines of "confirmation bias" type of stuff. Is that what it is?

It's related to trading so I will give an example.

You don't see one of your setups that you normally take, but price runs really far and then you start looking back and questioning how price came back to a certain point and you should have known to go long or just some other random variable that you use to try to explain the movement of price, but when in real-time it wasn't really visible because you really had no idea what price was going to do next.

Or another example, you're looking for a place to enter, but you're really unsure of what to do. Price then starts spiking in the direction that you were thinking and then you start saying stuff like, "Yeah I should have shorted there..." but in reality you shouldn't have, you're just looking back in the past now that you saw what happened. It's not so much of seeing what setups work, it's more of like the "after-the-fact moment."

I know that is confusing, but I'm having a hard time trying to explain it without giving a specific example based on what someone I know does.