instruction
stringlengths 5
1.05k
| output
stringlengths 6
22.3k
| input
stringclasses 1
value |
|---|---|---|
is a wash sale window 30 or 60 days | a wash sale is a total of a 60 day window starting from 30 days before the sale to 30 days after the sale | |
how do i avoid a wash sale | if you have sold or intend to sell a security at a loss you can avoid triggering the wash sale rule by purchasing a similar instrument 31 days or more before or after the sale the bottom linea wash sale occurs when an investor sells a security at a loss and then purchases the same or a substantially similar security within 30 days before or after the transaction this rule is designed to prevent investors from claiming capital losses as tax deductions if they re enter a similar position too quickly while not illegal wash sales have negative tax implications losses from such sales cannot be used to offset gains in the same tax year however these losses can be added to the cost basis of the newly purchased security affecting future gains this rule is relevant to all types of securities and trading and it s particularly significant for day traders and investors looking to use capital losses to mitigate tax liabilities understanding and navigating the wash sale rule is crucial for effective tax planning and investment strategy correction oct 14 2022 a previous version of this article misleadingly stated that a wash sale occurred when selling a security at a loss for a tax benefit it also incorrectly stated that an investor could not purchase the same or similar security within the 60 day window of 30 days before or 30 days after selling it | |
what is wash trading | wash trading is a process whereby a trader buys and sells a security for the express purpose of feeding misleading information to the market in some situations wash trades are executed by a trader and a broker who are colluding with each other and other times wash trades are executed by investors acting as both the buyer and the seller of the security wash trading misleads investors into believing that trading volumes for a security are higher than they actually are potentially increasing legitimate trading activity on the security in the process wash trading is illegal under u s law and the internal revenue service irs bars taxpayers from deducting losses that result from wash trades from their taxable income 12understanding wash tradingwash trading was first barred by the federal government after passage of the commodity exchange act in 1936 a law that amended the grain futures act and also required all commodity trading to occur on regulated exchanges 3 prior to its proscription in the 1930s wash trading was a popular way for stock manipulators to falsely signal interest in a stock in an attempt to pump up the value so that these manipulators could make money shorting the stock commodity futures trade commission cftc regulations also prohibit brokers from profiting from wash trades even if they claim they weren t aware of the trader s intentions 2 brokers therefore must perform due diligence on their customers to make sure that they are buying shares in a company for the purpose of common beneficial ownership the irs also has strict regulations against wash trading and requires that taxpayers refrain from deducting losses that result from wash sales the irs defines a wash sale as one that occurs within 30 days of the buying of the security and results in a loss 1wash trading and high frequency tradingwash trading returned to the headlines in 2013 right as the phenomenon of high frequency trading was becoming widespread high frequency trading is the practice of using super fast computers and high speed internet connections to perform upwards of tens of thousands of trades per second starting in 2012 then commissioner of the commodity futures trading commission bart chilton announced his intention to investigate the high frequency trading industry for violations of wash trading laws given how easy it would be for firms with this technology to enact wash trading under the radar 4in 2014 the securities and exchange commission sec charged wedbush securities for failing to maintain direct and exclusive control over settings in trading platforms used by its customers a failure that enabled some of its high frequency traders to engage in wash trades and other prohibited and manipulative behavior 5wash trading and cryptocurrenciesin recent years wash trading has infiltrated the cryptocurrency space as well the desire to give the impression of popularity and high trading volumes is clear there are thousands of cryptocurrency tokens available throughout the world and most have a difficult time distinguishing themselves but even the most popular cryptocurrencies including bitcoin experience wash trading 6a 2022 study of 157 cryptocurrency exchanges by forbes found that over half of all reported bitcoin trading volume is either fake or non economic wash trading 6 cryptocurrencies are particularly vulnerable to pump and dump schemes in which a combination of inflated trading volumes and strong publicity or recommendations from insiders artificially boosts a token s value allowing certain holders to sell at a massive profit while interest is high there are multiple potential reasons for the prevalence of wash trading in the crypto space even major digital currencies like bitcoin often lack universally accepted methods of calculating daily trading volume this leads to cryptocurrency firms producing oftentimes wildly divergent figures for historical trading volumes cryptocurrency exchanges themselves often lack legitimacy and there have been many high profile public collapses of token exchanges in recent years extreme volatility in the cryptocurrency space may incentivize rapid buys and sells finally crypto s murky status with u s and other government regulators creates a further opportunity for misleading trade activity 6examples of wash tradingwash trades are essentially trades that cancel each other out and have no commercial value as such but they are used in a variety of trading situations for example wash trades were used in the libor scandal to pay off brokers who manipulated the libor submission panels for the japanese yen according to charges filed by the u k financial authorities ubs traders conducted nine wash trades with a brokerage firm to generate 170 000 pounds in fees as a reward to the firm for its role in manipulating libor rates 7wash trades can also be used to generate fake volumes for a stock and pump up its price suppose a trader xyz and brokerage firm collude to buy and sell stock abc rapidly noticing activity on the stock other traders may put money into abc to profit from its price movements xyz then shorts the stock thereby profiting from its downward price movement | |
what is wash trading | wash trading refers to an illegal activity in which a single trader buys and sells the same security in order to generate misleading market information wash trading is often performed to artificially inflate the trading volume of a security | |
what is an example of wash trading | the irs defines a wash sale as one that happens within 30 days of the purchase of the same security and generates a loss 1 | |
why would someone do wash trading | in some cases wash trading bolsters the trading volume of a security potentially inspiring more legitimate trade activity wash trading can also be used to help artificially boost the price of the security as part of a pump and dump scheme the bottom linewash trading is an illegal activity in which a trader buys and sells the same security either within a short period of time or on separate exchanges in order to inflate the trading volume or the price of that security wash trading can occur across a variety of industries and assets but it has recently become a major consideration for the cryptocurrency and high frequency trading spaces | |
who was wassily leontief | wassily leontief was a nobel prize winning russian american economist and professor who contributed several insightful theories to economics leontief s nobel prize research focused on input output analysis which breaks down the sectors of the economy and discusses how changes in one sector can affect other sectors understanding wassily leontiefwassily leontief was born in germany in 1906 and died in new york city in 1999 at the age of 93 as an economist he made several contributions to the science of economics leontief s research into sectors led to his development of input output analysis which won him the nobel memorial prize in economics in 1973 1 leontief is also credited with his discovery of the leontief paradox and the composite commodity theorem 23throughout his professional life leontief promoted the use of quantitative data in economics leontief campaigned for broader and deeper developments in the area of quantitative data analysis throughout his career he was also one of the first economists to use a computer for quantitative research 4leontief taught at harvard university for 44 years and subsequently at new york university he served as president of the american economic association in 1970 4 four of leontief s doctoral students were also awarded the nobel prize including paul samuelson 1970 robert solow 1987 vernon l smith 2002 and thomas schelling 2005 5leontiff s researchone area in which leontief pursued his goal of making economic analysis more quantitative was in developing an empirical implementation of general equilibrium theory to do this leontief broke down the u s economy into 50 sectors establishing one of the first economic sector classification systems he developed input output tables for sector analysis that estimated the impact a change in production of a good has on other industries and their inputs establishing the interdependent relationships of economic sectors 6analysts can use input output analysis to estimate the impacts of positive and negative economic shocks by showing the changing demand for inputs when the production of outputs changes this helps to analyze ripple effects throughout an economy as changes in demand for final goods work their way up the supply chain input output tables can produce very rough estimates for small or moderate changes in outputs but because they assume fixed production technology they cannot accurately account for the dynamics of a real economy leontief s input output analysis has been used by the world bank the united nations and the u s department of commerce leontief also studied trade flows in the 1950s based on input output analysis of international trade he discovered that the u s a country with a great deal of capital was importing capital intensive commodities and exporting labor intensive commodities this is in contrast to prior theories of international trade which predict that countries will specialize in and export goods that they have a comparative advantage in producing this means that a capital rich country such as the u s would be expected to export capital intensive goods and import labor intensive goods from countries where labor is comparatively cheaper 7the leontief paradox as it came to be known led many economists to question the heckscher ohlin theorem which states that countries produce and export what they can create most efficiently depending on their factors of production moreover they import goods that they cannot produce as efficiently 8 several later economists proposed solutions to this apparent paradox including the linder hypothesis and the home market effect notably leontief s paradox does not account for human capital and the resulting difference between skilled and unskilled labor later researchers showed that u s exports were skilled labor intensive or in other words human capital intensive relative to imports resolving the leontief paradox in favor of the comparative advantage view 9the composite commodity theorem was a third major development credited to leontief who fathered the concept with john hicks this states that if the relative prices of a basket of goods are assumed to be fixed then they can be treated as a single composite good for the purpose of mathematical modeling 10 this simplified the equations needed to model price theory | |
what is a wasting asset | a wasting asset is an item that has a limited life span and irreversibly declines in value over time examples include depreciating fixed assets such as vehicles and machinery and securities with time decay like options which continually lose time value after purchase assets that lose valueany asset that decreases in value is a wasting asset a truck used for business purposes will decrease in value over time accountants attempt to quantify the decrease by assigning a depreciation schedule to recognize the loss a term life insurance policy or a maintenance contract has a time of expiration and will expire worthless a natural resource supply such as a coal mine or oil well has a limited lifespan and will decrease in value as the resource is extracted and the remaining supply is depleted the owner calculates the depletion rate to arrive at an expected life span wasting assets in financial marketsin the financial markets options are the most common type of wasting asset an option s value has two components time value and intrinsic value as the option s expiration date nears the time value gradually declines toward zero at expiration an option is worth only its intrinsic value if it is in the money itm its value is the difference between the strike price and the underlying asset s price if it is out of the money otm it expires worthless other derivative contracts such as futures have a wasting component as a futures contract nears expiration the premium or discount decreases only the premium or discount wastes away and the futures contract is worth something at expiration unlike an otm option investors watch the expiration for any derivative especially options options strategies tend to be shorter term most expiring within one year there are longer term options called long term equity anticipation securities leaps which expire in one year or longer 1example of an option as a wasting assetassume a trader buys an option contract on the spdr gold shares gld if the trust trades at 127 they buy an at the money atm call option with a strike of 127 this option has no intrinsic value since it is atm and not itm the option which expires in two months has a premium of 2 55 the option costs 255 for an option contract of 100 shares 2 55 x 100 shares for the call buyer to make money the price of gld will need to rise above 129 55 127 2 55 this is the breakeven point if the price of gld is below 127 at expiry the option will expire worthless and the trader will lose 255 the writer has captured the time value or wasting asset portion of the option while the buyer has lost it if gld trades above the strike price at 128 at the option s expiry the buyer will still lose money they are fetching 1 but the option costs 2 55 so the loss is 1 55 or 155 which is the option writer s profit if the price of gld is above 129 55 at an expiry of 132 then the buyer will cover the cost of the time value the buyer s profit is 2 45 132 129 55 or 245 for the contract the writer loses 245 if they wrote a naked call option or has an opportunity cost of 245 if they wrote a covered call | |
what is the irs policy for depreciation of assets | irs publication 946 provides guidelines for taxpayers to claim depreciation for wasting assets such as vehicles | |
how do options traders take advantage of time decay | options traders can write options to take advantage of time value decay sellers of options collect money when they write the contract and keep the entire amount called the premium if the option expires worthless in contrast the buyer of the options loses the premium if the option expires worthless in addition to time decay when do options traders lose money any trader making a directional bet on the underlying asset by buying options can still lose money if the underlying does not move in the desired direction quickly for example a bullish trader buys a call option with a strike price of 55 when the current price is 50 the trader will make money if the stock moves above 55 minus the premium paid but it must do so before the option expires the bottom linea wasting asset such as vehicles non renewable resources and financial market options declines in value over time accountants use depreciation formulas to account for the loss of tangible assets like a work truck in the financial market traders can lose money as options move toward expiration and the investment vehicle loses value the comments opinions and analyses expressed on investopedia are for informational purposes online read our warranty and liability disclaimer for more info | |
what is a wasting trust | a wasting trust is a fund whose assets have been depleted over time as plan participants receive their required payouts and no new money is paid in the term may also be applied to income trusts which hold depleting assets such as oil and gas in either case the principle held in the trust is declining in value the trust will continue to pay out until its assets are exhausted understanding a wasting trusta wasting trust holds assets after a qualified plan is frozen that is once the plan has stopped accepting new contributions a wasting fund holds the remaining assets companies that offer pension plans use a wasting trust to phase out a traditional pension plan when they switch to a 401 k or another type of company sponsored retirement plan the trust stays in existence long enough to pay out the remaining assets while current employees contribute to the new plan wasting trusts are also common in estate planning a will may set aside a sum of money to be used by one or more beneficiaries until the money is exhausted the trustee may use part of the principal held in trust to maintain the payments to beneficiaries that are required under the plan example of a wasting trustif a company switches its employee retirement benefit from a pension fund to a 401 k plan it will create a wasting trust to hold the assets in its pension fund the pension fund is frozen new employee contributions are going into the 401 k fund not the pension plan the company will continue to pay its obligations to its retired employees until the funds in the plan are exhausted | |
what is a watchlist | a watchlist is a set of securities that an investor monitors for potential trading or investing opportunities many brokerage and financial platforms allow for easy construction and viewing of watchlists a well organized watchlist can help identify trading opportunities track portfolio performance or monitor hot or popular stocks understanding watchlistsa watchlist is basically what it sounds like a list of stocks that an investor watches with an eye toward taking advantage of prices if they fall enough to create an interesting undervalued situation this takes the closely followed list a step further these are names that an investor would be prepared to buy and own at the right price or with the right catalyst a sign that growth has reignited for instance an investor or trader may create a watchlist of several dozens or even hundreds of trading instruments to make more informed investment decisions a watchlist can help an investor track companies and stay abreast of financial or other news that could impact these instruments typically the investor monitors the list waiting for certain criteria to be met such as trading over a certain volume breaking out of a 52 week range or moving above its 200 day moving average before placing trade orders types of watchlistsmost trading platforms allow users to create their own watchlists for the securities that they are interested in fidelity one of the leading online trading platforms allows users to create up to fifteen different watchlists with 50 symbols each users can also configure their lists to alert them of any new trading signals such as sudden price changes a well organized investor could use this functionality to create separate watchlists for stocks bonds mutual funds or any other tradable assets watchlists are also used in cryptocurrency trading where sharp price swings can sometimes offer brief opportunities for high profits in addition to trading metrics a watchlist for cryptocurrencies might track tokens with an upcoming fork or mainnet launch | |
when to use a watchlist | an investor for example may be interested in purchasing stocks in a particular sector but if that sector is generally overvalued it may offer few stocks that are attractively priced an investor could create a list of all the stocks in that sector that would track various valuation measures including ratios like trailing price to earnings price to sales and price to book among others when a company on the list met a specified valuation criterion such as a pe ratio less than 15 it would then be known that this stock was a possible candidate for investment many investment oriented websites and brokerage platforms allow visitors or customers to create watchlists online often for free if you re interested in keeping track of any securities you can build your own watchlist on most brokerage platforms many novice investors are tempted to track as many stocks as possible but a watchlist with hundreds of entries is too broad for any one investor don t try to track everything at once special considerationsas a general rule the watchlists provided by brokerage platforms can accommodate around 25 to 75 names depending on space taken up by charts scanners news tickers and market depth windows a longer watchlist of say 200 stocks is likely to be too broad for almost any investor to monitor or maintain investors should refresh this list at least a couple of times per month after all this is generally supposed to be a list of names that an investor is simply waiting to get cheap enough to buy it s a good idea to devote at least one screen entirely to watchlist tickers with each entry displaying just two or three fields including last price net change and percentage change some traders add a single chart to this linking the tickers to allow a quick review of price patterns during the trading day example of a watchlistfor examples of stock watchlists yahoo finance offers several curated watchlists with preset criteria like most active penny stocks and most shorted stocks these lists have the added advantage of automatic updates so that users do not need to manually add or remove stocks that no longer fit the list criteria 1the bottom linewatchlists are an easy way for investors to track the market for trading signals and opportunities there are now many tools for investors to create their own watchlists or follow curated watchlists by other parties by narrowing the market down to a list of key securities traders can focus their attention to closely watch the securities that they are interested in | |
how do you create a stock watchlist | most online trading platforms offer functionality for users to create their own watchlists allowing them to easily track any security that catches their interest to create a watchlist you should first identify your key investment criteria and decide what kinds of investments you are looking for then using a stock screener or similar tool search for stocks that fit those criteria and add them to your watchlist | |
what is a good stock watchlist tool | in terms of functionality the most versatile watchlist tools come as part of a paid investment product worden s tc2000 wealth lab and trade ideas each offer large databases for paying customers free trading platforms such as fidelity or robinhood also come with the ability to create watchlists and follow stocks although they may track fewer metrics than paid versions many online finance sites such as marketwatch and tradingview also offer free watchlists and stock screeners | |
what is a curated stock watchlist | a curated stock watchlist is a watchlist that has been created by a broker or trading platform for the benefit of its clients these watchlists have the added convenience of automatic maintenance so the end user does not need to add or remove stocks that no longer fit the list criteria investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment objectives risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors investing involves risk including the possible loss of principal | |
what is water damage insurance | water damage insurance is a type of protection provided in most homeowners insurance policies against sudden and accidental water damage water damage insurance does not cover damage resulting from the homeowners negligence or failure to maintain the home in good repair moreover flooding usually requires a separate policy if available understanding water damage insurancemost home insurance policies cover accidental and sudden damage caused by water for example a burst pipe that caused damage to a wall or floor would be covered however a gradual leak or seepage due to poor maintenance wouldn t be covered also water damage insurance does not cover negligence if you have an outstanding mortgage loan your mortgage lender will not likely require water damage insurance but will require you to purchase homeowners insurance proper maintenance can help homeowners avoid many types of water damage to their property maintenance can include monitoring drippage from the ceiling during a rainstorm or fixing a leaky pipe under the kitchen sink before mold becomes a problem 1water damage claims and costswater damage is a major factor in homeowners insurance claims according to the insurance information institute water was the third leading cause of claims from 2017 to 2021 with an average of 12 514 per claim water damage and freezing were the second most frequent claims after wind and hail damage about one in 60 insured homes has a property damage claim caused by water damage or freezing each year water damage represented more than 23 of homeowner insurance claims in 2021 behind wind and hail which were 39 and fire and lightning 25 of claims 2carefully review your policy details for sublimits that reduce your water damage coverage for example your homeowners insurance might have 300 000 in property damage coverage with water damage capped at 8 000 policies with sublimits can decrease your monthly premiums but increase your out of pocket costs when filing a claim 3types of water damage claimsone of the most common water damage claims is due to plumbing system failures frozen pipes can cause plumbing failures when a pipe bursts due to a buildup in water pressure caused by freezing water in an adjacent section of the pipe broken valves and weakened joints can also cause plumbing supply system failures drain system failures are another top source of claims including sewer backups toilet failures either from the water supply line or from the toilet backing up into the house can cause significant damage however a standard homeowners insurance policy may not cover a sewer backup as a result an additional policy rider for sewer backup coverage might be needed other water damage claims result from water heaters or washing machine hoses failing 4special considerationsto mitigate water damage have older homes inspected by a licensed plumber every five years replace older water heaters use steel braided supply lines on washing machines and turn off the supply lines when the machine is not in use don t run the dishwasher or washing machine when someone s not at home frequently asked questions faqs | |
what types of water damage are covered under homeowners insurance | most homeowners policies won t cover damage due to water from seepage or gradual leaking instead water damage from sudden and accidental events will likely be covered | |
does homeowners insurance cover water leaks and backups | some homeowners insurance policies cover sewer backups but it depends on the policy insurers may cover water backups from a covered event such as a burst pipe or storm damage you may need additional water or sewer backup coverage as an add on to your policy 5 | |
what s the difference between actual cash value and replacement cost | if an insurer pays you the actual cash value for a claim the amount will be discounted or reduced to account for the wear and tear of the damaged item a process called depreciation conversely if your policy has replacement cost coverage you ll receive a claim payment for the items at today s current prices the bottom linewater damage insurance provides coverage to homeowners against certain forms of water damage most homeowners insurance policies may not cover water damage due to negligence poor maintenance or floods however if the water damage is due to a sudden accidental event insurance will likely cover the damage to the home examples of covered water damage can include burst pipes and toilet failures | |
what is water damage legal liability insurance | water damage legal liability insurance refers to a type of policy that provides financial protection to a person or business that unintentionally causes water damage to another property for individuals water damage legal liability insurance and the cost of it are typically included in renter homeowners and condo insurance policies | |
how water damage legal liability insurance works | water damage legal liability insurance is a kind of liability insurance liability insurance is a type of coverage that protects an individual or business from the risk of being sued or held legally responsible that is liable for something liability insurance policies can cover both legal costs and any payouts for destruction damage or injury however inadvertent for which the insured is deemed responsible there are various situations when water damage legal liability insurance could help protect an individual from enormous costs for example let s say the owners of a second floor condo unit experienced a water heater explosion and the water leaked into the first floor water damage legal liability insurance would protect the owners of the second floor condo by providing the money to repair the damage to the first floor units without the insurance the second floor owners could be held responsible for paying for the repairs out of pocket homeowners policies and water damage legal liability insurancehomeowners insurance policies generally include water damage legal liability either as part of the personal liability coverage or in a separate rider if you have a mortgage loan your mortgage lender will likely require you to buy homeowners insurance but not mandate a separate policy for water damage liability generally the water damage must result from a sudden event or accident something unforeseen and inadvertent like a leaking air conditioner burst pipe malfunctioning washing machine or the aforementioned water heater rupture the liability extends to damage destruction or injury to others structures belongings or even persons however if the triggering event and ensuing water damage are caused by poor maintenance misconduct or deliberate carelessness the liability coverage might not apply or your insurance company might reject the claim 1be aware of policies that limit your coverage for water damage and liability some homeowners insurance policies have sublimits within the contract that impose a cap on claim payouts associated with water damage 2 | |
how to increase or improve coverage | not all policies include legal liability insurance for water damage legal liability insurance so it is important to read the insurance contract carefully a more common issue is not the existence of the coverage but the extent of it most standard homeowners policies provide a basic limit of liability of 300 000 for property damages or injuries this coverage amount can be increased for an additional premium but often only to a specified limit if you want broader liability coverage than that provided by your homeowners insurance you could purchase what is commonly called an umbrella insurance policy personal liability insurance makes payments on the policyholder s behalf in cases of at home and auto accidents as well as situations that involve libel slander vandalism or invasion of privacy the policy also covers injuries that occur at secondary residences or seasonal homes within recreational vehicles on the premises of rental properties or on a boat or watercraft owned by the policyholder frequently asked questions faqs | |
how does water damage legal liability insurance work | typically water damage legal liability insurance protects you if water damage results from a sudden event or accident like a burst pipe or a broken washing machine the liability protects you financially from damage caused to other people and their property | |
how do i increase my water damage legal liability insurance | the standard homeowners insurance policies usually provide a basic limit of liability protection for water damage you can increase the coverage but it will also increase your monthly premium you can also buy an umbrella policy which provides broad coverage of personal liability including slander libel accidents and water damage | |
what claims are not covered by water damage legal liability insurance | if the event causing the water damage resulted from poor maintenance malfeasance or deliberate carelessness the water damage liability coverage might not apply meaning the insurer would deny the claim 1the bottom linewater damage legal liability insurance provides an owner financial protection from accidents and unforeseen events that cause water damage to other people or their property typically the standard homeowners insurance policy includes water damage legal liability insurance but you can increase the coverage as needed | |
what is a water exclusion clause | a water exclusion clause is a restriction in homeowners and renter s insurance policies that denies coverage for some water related claims events that are likely to fall under a water exclusion clause include damage caused by flood tsunamis standing water groundwater and drain or sewage backups homeowners and renters may be able to add some types of water damage coverage excluded in the standard policy by purchasing a rider or separate specialized insurance understanding a water exclusion clausea water exclusion clause is common in most property insurance policies the reasoning is that only specific areas are prone to water related natural disaster events such as floods tidal waves or tsunamis water exclusion is one of several types of exclusion clauses found in homeowners and renter insurance contracts other standard exclusions include movements of the earth quakes landslides wars and certain other government actions and nuclear hazards and events however water related perils aren t totally excluded by homeowners insurance most policies routinely do cover water damage that occurs for specific reasons usually a sudden or accidental event that occurs within the structure such as a burst pipe or malfunctioning dishwasher or other plumbing water supply related problems gradual damage or wear and tear that happens over time generally isn t covered though destruction arising out of certain weather events such as thunderstorms that send a tree crashing through a wall or snow that collapses a roof allowing water to pour in generally are covered at least the water damage they cause is ironically the cost of repairing the wall or roof may not be some types of hurricane related damage may also be covered though in 19 states and the district of columbia policyholders must pay an additional hurricane deductible before coverage kicks in 1 special considerations floods and water exclusion clausesunless it s due to an internal cause like a gushing washer dryer or an overflowing toilet flooding is a typical part of a water exclusion clause these clauses generally define a flood as rising or surface waters that come from the outside in though even this is often subject to controversy and litigation should the clause apply if the flood ensues from man made forces a burst dam a collapsed levee rather than natural forces e g continuous rain that makes a river overflow its banks does surface water come solely from rain or melting snow or does it count if it s been sitting on a man made surface such as pavement a balcony or a roof despite the legal debate the bottom line is that a flood from an external source that seeps into a home probably won t be covered by the hazard insurance component of a standard homeowners policy the expensive nature of water damage and the prevalence of it in 2018 water damage and freezing represented 23 8 of all insurance losses2 gives homeowners and renters reasons to find alternative coverage options average losses to homeowners due to water damage and freezing in 2018 according to the insurance information institute 2 usually that means purchasing a separate policy for protection against flood damage known as flood insurance in fact for properties in high risk areas lenders sometimes require mortgaged homeowners to carry flood insurance at least to protect the structure of the dwelling unlike a standard homeowners policy flood insurance requires that a policyholder buy separate policies to cover the property and the property s contents homes financed by a federally backed lender for example require flood insurance if they are located in a government designated flood hazard zone 3flood insurance policies are available for both residential and commercial properties renters can also purchase flood insurance policies that cover their personal property in a single family home apartment condominium or business property 4while flood insurance can be purchased through many different insurance companies the rates are regulated by the federal national flood insurance program nfip so the same policy costs the same amount no matter which company it is purchased through 5 | |
what is the water quality improvement act of 1970 | the water quality improvement act of 1970 was a piece of u s legislation that expanded the federal government s authority over water quality standards and water polluters the act grew out of the 1948 federal water pollution control act and placed additional limits on the discharge of oil into bodies of water where it could damage human health marine life wildlife or property it also included other provisions intended to reduce water pollution understanding the water quality improvement act of 1970federal regulation of water pollution dates back to 1886 when the river and harbor act was signed into law one of the first and most important laws that addressed water quality and pollution in the united states was the federal water pollution control act of 1948 which was established by congress to enhance water quality and to create a national policy to control and prevent water pollution 1 the act was later amended to expand the standards associated with water quality and pollution this expansion also paved the way for the water quality improvement act of 1970 the new act expanded federal authority and established a state certification procedure to prevent the degradation of water below applicable standards according to the environmental protection agency epa improvements to the 1948 act resulted in sporadic legislation which was largely due to changes in the responsibilities of federal agencies that made it difficult to enforce the law 1 amendments were introduced in 1972 to help alleviate these problems by restructuring water pollution control authorities and amalgamating them new standards were put into place regulations were increased to prevent oil from entering navigable waters and guidelines were installed for discharge limitations for things like sanitary waste drilling fluids and produced water after these changes were initiated in 1972 the law became known as the clean water act the act s very first goal was to stop all pollutants from entering any of the navigable waters in the country by 1985 this was followed by an interim water level quality that would protect marine wildlife such as fish and shellfish by july 1983 1 special considerationsalthough water pollution has been reduced substantially since the 1970s there is still much that needs to be done nitrogen and phosphorous are commonly found in water and provide marine wildlife with much needed nutrition but when waterways are found with excessive levels of these elements it can become dangerous a major cause of pollution is now pesticides whereas in the early 1970s it was the direct dumping of chemicals and other pollutants into the water by industries according to the epa nitrogen pollution has impacted many streams rivers lakes bays and coastal waters for the past several decades resulting in serious environmental and human health issues and impacting the economy 2 potential polluters can purchase marine pollution insurance to protect themselves from liabilities they may face under federal water regulations potential accidental water polluters can protect themselves from the liabilities they face under federal water regulations by purchasing marine pollution insurance this insurance covers losses such as cleanup damage to natural resources legal defense and civil penalties mobile drilling units cargo owners and operators shipyards and marina owners and operators are examples of businesses that can benefit from having this type of insurance coverage | |
what are water rights | water rights pertain to the legal rights of property owners to access and use bodies of water adjacent to lands they hold different types of water rights exist based on various forms of water that border or exist on a property in the united states water rights can vary in the eastern and western parts of the country in general the western states have historically followed the prior appropriation doctrine which grants the right to divert water to the first person who started using the water most eastern states follow what is known as the riparian doctrine which limits water use to the owner of the land adjacent to the water 1 | |
how water rights work | riparian rights are a type of water rights awarded to landowners whose property is located along flowing bodies of water such as rivers or streams landowners typically have the right to use the water as long as such use does not harm upstream or downstream neighbors mitigation banking a systen of debits and credits help ensure the sustained preservation of wetlands and streams in the event the water is a non navigable waterway the landowner generally owns the land beneath the water to the exact center of the waterway 1littoral rights are a type of water rights that pertain to landowners whose land borders large navigable lakes and oceans there are tides and currents that affect these bodies of water but they do not flow by the land in the manner of streams and rivers landowners with littoral rights have unrestricted access to the waters but own the land only to the median high water mark water rights are appurtenant meaning they run with the land and not to the owner if an oceanfront property is sold the new owner gains the littoral rights and the seller relinquishes their rights special considerationsan owner who holds land that includes a riverbank bordering on a flowing river can make use of the water for their needs such as drinking providing water for animals bathing or watering gardens these are all considered domestic uses and are permitted however riparian rights might not allow the water to be pumped or otherwise removed from the flowing river or stream each state and municipality will have regulations and limits on the extent of water diversion that may be permitted depending on local laws the water might not be permitted for land irrigation or for commercial needs some localities may allow for certain irrigation uses of the water it may be possible to apply for water diversion rights that would allow for the transport of water away from its source this would permit usage of the water for commercial purposes such as for mining operations or the irrigation of lands for agricultural operations these limits are intended to reduce the impact that water removal could have on the surrounding environment water diversion rights may include stipulations that the use of the water must be consistently maintained or the rights will expire after a defined period of time eastern vs western u s water rightsstates in the eastern part of the united states follow the riparian doctrine of water rights which allows landowners to make reasonable use of the watercourse such as a stream lake pond or river adjacent to their land reasonable use entitles the landowner to use the water as long as it does not interfere with the reasonable use of another landowner downstream for example a reasonable use might include using the water for irrigation watering livestock or drinking 1most eastern states have implemented a government regulated riparian system individuals or companies must apply for a permit from a state agency and provide details about the projected use of the water before granting the permit the state will determine if the projected water use is reasonable 1in contrast almost every state west of the 100th meridian uses the prior appropriation water rights doctrine prior appropriation began in the 19th century as settlers moved to the western territories settlers acquired water rights through a system that was called first in time first in right any individual who first appropriates a water source and puts it to beneficial use then has the vested right to continue to use and divert the water 2by the 20th century the federal government began enacting legislation that restricted and limited certain water rights acquired through prior appropriation some legislation focused on water and land rehabilitation this legislation includes the clean water act national environmental policy act and the endangered species act according to the department of interior these restrictions have caused considerable conflict between the federal government and the western states 2 | |
what is watercraft insurance | watercraft insurance is an umbrella term for three types of insurance boat insurance yacht insurance and personal watercraft insurance it protects against damages to vessels powered by a motor that has a horsepower of at least 25 miles per hour mph examples of the types of costs covered by watercraft insurance policies include physical loss or damage to the boat theft of the boat and towing | |
how watercraft insurance works | depending on the policy there may also be watercraft liability coverage for bodily injury to people other than the boat s owner and family guest passengers using the boat by themselves and medical payments for injury to the owner and their family some policies however require the purchase of additional liability coverage as an add on the specific type of insurance you buy is dictated by the size of your vessel watercraft insurance is similar to other types of insurance products in exchange for paying a series of insurance premiums the policyholder receives protection from certain rare but potentially costly risks depending on factors such as the size of the craft its age and its intended uses the premium costs may range from relatively inexpensive to pricey when underwriting a policy an insurance company will also consider the policyholder s track record of previous claims 1any vessel under 197 feet long is considered a boat while ships are 197 feet or longer the dividing line between boat and yacht is less settled some sources define a yacht as at least 30 feet long anything shorter is a pleasure boat 2 for insurance purposes the national boat owners association marks the dividing line at 27 feet 3small craft such as canoes rowboats small sailboats and powerboats with less than 25 miles per hour horsepower may be covered under a standard homeowners or renter s insurance policy however such coverage is unlikely to include liability insurance typical boat insurance covers theft physical damage to the boat itself due to a collision or striking a submerged object property damage to the boat caused by vandalism a windstorm or lightning and medical payments for injured passengers and the owner and their family for each coverage there will be different deductibles which is how much you must pay out of pocket before your insurance kicks in boat insurance will often provide better liability insurance than a homeowners policy but it is often wise to purchase additional liability coverage as an add on in the event of a total loss it is important to know whether your policy pays actual cash value acv or agreed value av acv is cheaper because it only pays for what the boat was worth at the time of the loss factoring in depreciation and wear and tear on the vessel av pays a price that you and your insurer agree upon in advance an amount that is likely to be closer to the amount you paid for the boat when new other considerations for boat insurance can include 1most yacht coverage is broader and more specialized than pleasure boat coverage because larger vessels travel farther and are exposed to greater risks it also generally costs more in part because yachts cost more in terms of a deductible it is usually determined as a percentage of the insured value with a 1 deductible a boat insured for 175 000 would have a 1 750 deductible most lenders allow a maximum deductible of 2 of the insured value 4generally yacht insurance coverage does not include wear and tear gradual deterioration marine life marring denting scratching animal damage osmosis blistering electrolysis manufacturer s defects defects in design and ice and freezing 5there are two main parts of a yacht insurance policy hull insurance and protection and indemnity p i the first is an all risk direct damage coverage that includes an av for hull coverage and in the case of a total loss it will be paid out in full replacement cost coverage on partial losses is also available however sails canvas batteries outboards and sometimes outdrives are usually subject to depreciation instead 6p i insurance is the broadest of all liability coverages and because maritime law is particular you will need coverages that are designed for those exposures longshore and harbor workers coverage and jones act coverage for the yacht s crew are included and are important because your losses in these areas could run into six figures p i will cover any judgments against you and also pay for your defense in admiralty courts 6personal watercraft insurance is for recreational vehicles such as jet skis sea doos and yamaha wave runners these surface skimming craft can have engines with horsepower anywhere from 60 mph to 310 mph they usually are not covered by homeowners insurance and even when they are the coverage limits are low personal watercraft insurance covers the owner and anyone they allow to use the craft for risks such as deductibles and liability limits will vary depending upon the policy and the company offering it you can buy additional coverage for trailers and accessories and if you own more than one craft you may be able to bundle your insurance policies for a discount these pleasure vehicles are easy to use but can also be dangerous causing thousands of injuries every year which makes personal watercraft insurance a wise investment watercraft insurance policies may limit the geographic areas in which the boat or watercraft can be operated while maintaining coverage these often include inland waterways rivers and lakes as well as ocean waters within a certain number of miles from shore 1 | |
do i need watercraft insurance | only a few states make it mandatory for boat owners to obtain watercraft insurance however many owners will opt to purchase it regardless partly because doing so is required in order to obtain a boat loan marinas may also require owners to have watercraft insurance as a condition within their rental agreements 7even if your craft isn t worth much money obtaining watercraft insurance is a good idea because of the risk of injury on the water especially from a collision even if you aren t at fault you could spend a lot of money in legal fees defending yourself much more than your insurance premiums if you do decide to purchase this insurance make a point of comparing policies from multiple companies before deciding on which is best for you as with all insurance the question is what price you put on having peace of mind 7 | |
what is watered stock | watered stock referred to shares of a company that were issued at a much greater value than the value implied by a company s underlying assets usually as part of a scheme to defraud investors the last known case of watered stock issuance occurred decades ago as stock issuance structure and regulations have evolved to put a stop to the practice this term is believed to have originated from ranchers who would make their cattle drink large amounts of water before taking them to market the weight of the consumed water would make the cattle deceptively heavier enabling the ranchers to fetch higher prices for them understanding watered stockthe book value of assets can be overvalued for several reasons including inflated accounting values like a one time artificial increase in inventory or property value or excessive issuance of stock through a stock dividend or employee stock option program perhaps not in every single case but often in the late 19th century owners of a corporation would make exaggerated claims about a company s profitability or assets and knowingly sell shares in their companies at a par value that far exceeded the book value of the underlying assets leaving investors with a loss and the fraudulent owners with a gain they would do this by contributing property to the company in return for the stock of inflated par value this would cause the value of the company to increase on the balance sheet even though in reality the company would hold far fewer assets than those reported it would not be until much later that investors learned that they were deceived those holding watered stock found it difficult to sell their shares and if they could find buyers the shares were sold at much lower prices than the original price if creditors foreclosed on the company s assets the holders of watered stock could be held liable for the difference between the company s value on the books and its value in terms of real property and assets for example if an investor paid 5 000 for stock that was only worth 2 000 he could find himself on the hook for the 3 000 difference if the creditors foreclosed on corporate assets daniel drew cattle driver and financier is credited with introducing the term watered stock to the finance world the end of watered stockthis practice essentially came to an end when companies were compelled to issue shares at low or no par value usually under the advice of attorneys who were mindful of the potential for watered stock to create liability for investors investors became wary of the promise that par value of a stock represented the actual value of the stock accounting guidelines developed so that the difference between the value of assets and low or no par value would be accounted for as capital surplus or additional paid in capital in 1912 new york allowed corporations to legally issue no par value stock and split the incoming capital between capital surplus and stated capital on accounting ledgers with other states following suit shortly thereafter | |
what is a waterfall concept | the term waterfall concept refers to a popular estate planning strategy in which a whole life insurance policy is transfered or rolled over from the policyholder to their child or grandchild | |
how waterfall concepts work | the purpose of the waterfall concept is to ensure that wealth is passed on from one generation to another in as tax efficient a manner as possible it does so by structuring a tax exempt whole life insurance policy in a manner that permits its tax deferred cash value to be withdrawn by the child or grandchild at a future date after the original policyholder has died whole life policies have two components in addition to the death benefit that pays out when the insured passes away whole life life insurance policies also accumulate a tax deferred cash value as the insured pays premiums eventually the insured individual transfers the life insurance policy to a descendant at which point the funds become taxable on withdrawal 1in addition to its tax advantages the waterfall concept can help avoid some of the pitfalls that can apply to gifts and other large scale transfers of wealth 2 for example waterfall concepts can be carried out using only the terms and conditions of the original insurance contract without requiring the involvement of potential costly lawyers and intermediaries similarly transferring wealth through a waterfall concept can help prevent those assets from being allocated to other parties as part of the probate process real world example of a waterfall concepta typical example of the waterfall concept would be one in which the policy is transferred from a grandparent to a grandchild the grandchild would then pay taxes only when withdrawing funds from the policy to the extent that the grandchild s tax rate is lower than that of their grandparent this would result in tax savings overall | |
what is a waterfall payment | waterfall payment structures require that higher tiered creditors receive interest and principal payments while the lower tiered creditors receive principal payments after the higher tiered creditors are paid back in full debtors typically structure these schemes into such tranches to prioritize the highest principal loans first because they are also likely the most expensive | |
how a waterfall payment works | imagine a waterfall cascading down into vertically aligned buckets the water represents money and the buckets represent creditors the water fills the first bucket first the second bucket will fill only after the first is full as water flows more buckets are filled in the order in which they appear typically bucket sizes size of debt decrease as the water descends this is likely because paying off large debts reduces the risk of insolvency and frees up cash for operations capital expenditures and investments for example this type of plan works best for a company repaying more than one loan assume this company has three operating loans each with different interest rates the company makes principal and interest payments on the costliest loan and makes only interest payments on the remaining two once the most expensive loan is paid off the company can make all interest and principal payments on the next more expensive loan the process continues until all loans are repaid example of waterfall paymentsto demonstrate how a waterfall payment scheme works assume a company has taken loans from three creditors creditor a creditor b and creditor c the scheme is structured so that creditor a is the highest tiered creditor while creditor c is the lowest tiered creditor the arrangement for what the company owes each of the creditors is as follows assume in year one the company earns 17 million it then pays off the entire 15 million owed to creditor a leaving it with 2 million to pay off further debts since the priority structure is still in place this 2 million must be applied to creditor b assume the company pays 1 million to creditor b for interest and 1 million to creditor b for the principal the result after year one is as follows if in year two the company earns 13 million it could then pay off the remaining obligation to creditor b and begin paying off creditor c the result after year two is as follows this example was simplified to show the mechanics of a waterfall payment scheme in reality some waterfall schemes are structured so minimum interest payments are made to all tiers during each payment cycle | |
what is weak ai | weak artificial intelligence ai also called narrow ai is a type of artificial intelligence that is limited to a specific or narrow area weak ai simulates human cognition it has the potential to benefit society by automating time consuming tasks and by analyzing data in ways that humans sometimes can t weak ai can be contrasted to strong ai a theoretical form of machine intelligence that is equal to human intelligence understanding weak aiweak ai lacks human consciousness although it may be able to simulate it at times the classic illustration of weak ai is john searle s chinese room thought experiment 1 this experiment says that a person outside a room may be able to have what appears to be a conversation in chinese with a person inside a room who is being given instructions on how to respond to conversations in chinese in this experiment the person inside the room would appear to speak chinese in reality they couldn t actually speak or understand a word of chinese absent the instructions being fed that s because the person is good at following instructions not speaking chinese they might appear to have strong ai machine intelligence equivalent to human intelligence but they really only have weak ai narrow or weak ai systems do not have general intelligence they have specific intelligence an ai that is an expert at telling you how to drive from point a to point b is usually incapable of challenging you to a game of chess in the same way a form of ai that can pretend to speak chinese with you probably cannot sweep your floors applications for weak aiweak ai helps turn big data into usable information by detecting patterns and making predictions examples of weak ai include meta s formerly facebook newsfeed amazon s suggested purchases and apple s siri the iphone technology that answers users spoken questions email spam filters are another example of weak ai a computer uses an algorithm to learn which messages are likely to be spam then redirects them from the inbox to the spam folder limitations of weak aibesides its limited capabilities some of the problems with weak ai include the possibility to cause harm if a system fails for example consider a driverless car that miscalculates the location of an oncoming vehicle and causes a deadly collision the system also can cause harm if the system is used by someone who wishes to cause harm consider a terrorist who uses a self driving car to deploy explosives in a crowded area a further concern related to weak ai is the loss of jobs caused by the automation of an increasing number of tasks will unemployment skyrocket or will society develop new ways for humans to be economically productive although the prospect of a large percentage of workers losing their jobs may be terrifying advocates of ai claim that it is also reasonable to expect that should this happen new jobs will emerge that we can t yet predict as the use of ai becomes increasingly widespread | |
what is a weak dollar | a weak dollar refers to a downward price trend in the value of the u s dollar relative to other foreign currencies the most commonly compared currency is the euro so if the euro is rising in price compared to the dollar the dollar is said to be weakening at that time essentially a weak dollar means that a u s dollar can be exchanged for smaller amounts of foreign currency the effect of this is that goods priced in u s dollars as well as goods produced in non us countries become more expensive to u s consumers understanding what a weak dollar meansa weakening dollar implies several consequences but not all of them are negative a weakening dollar means that imports become more expensive but it also means that exports are more attractive to consumers in other countries outside the u s conversely a strengthening dollar is bad for exports but good for imports for many years the u s has run a trade deficit with other nations meaning they are a net importer a nation which imports more than it exports would usually favor a strong currency however in the wake of the 2008 financial crisis most of the developed nations have pursued policies that favor weaker currencies a weaker dollar for example could allow u s factories to remain competitive in ways that may employ many workers and thereby stimulate the u s economy however there are many of factors not just economic fundamentals such as gdp or trade deficits that can lead to a period of u s dollar weakness the term weak dollar is used to describe a sustained period of time as opposed to two or three days of price fluctuation much like the economy the strength of a country s currency is cyclical so extended periods of strength and weakness are inevitable such periods may occur for reasons unrelated to domestic affairs geopolitical events weather related crises financial strain from overbuilding or even under population trends can cause pressure on a country s currency in ways that create relative strength or weakness over a period of years or decades the federal reserve works to equalize such influences as much as it determines to be prudent the fed responds with tight or easing monetary policy during a period of tight monetary policy when the federal reserve is raising interest rates the u s dollar is likely to strengthen when investors earn more money from better yields higher interest payments on the currency it will attract investment from global sources which may push the u s dollar higher for a while conversely a weak dollar occurs during a time when the fed is lowering interest rates as part of an easing monetary policy quantitative easingin response to the great recession the fed employed several quantitative easing programs where it purchased large sums of treasuries and mortgage backed securities in turn the bond market rallied which pushed interest rates in the u s to record lows as interest rates fell the u s dollar weakened substantially over a period of two years mid 2009 to mid 2011 the u s dollar index usdx fell 17 percent however four years later as the fed embarked on lifting interest for the first time in eight years the plight of the dollar turned and it strengthened to make a decade long high in december 2016 when the fed shifted interest rates to 0 25 percent the usdx traded at 100 for the first time since 2003 tourism and tradedepending on the type of transaction that a party is participating in possessing a weak dollar is not necessarily a bad situation for example a weak dollar may be bad news for u s citizens wishing to vacation in foreign countries but it could be good news for u s tourist attractions as it also means that the u s would be more inviting as a destination for international travelers more significantly a weak u s dollar can effectively reduce the country s trade deficit when u s exports become more competitive on the foreign market then u s producers divert more resources to producing those things foreign buyers want from the u s but policy makers and business leaders have no consensus on what direction a weaker or stronger currency is best to pursue the weak dollar debate has become a political constant in the 21st century | |
what is weak form efficiency | weak form efficiency claims that past price movements volume and earnings data do not affect a stock s price and can t be used to predict its future direction weak form efficiency is one of the three different degrees of efficient market hypothesis emh the basics of weak form efficiencyweak form efficiency also known as the random walk theory states that future securities prices are random and not influenced by past events advocates of weak form efficiency believe all current information is reflected in stock prices and past information has no relationship with current market prices the concept of weak form efficiency was pioneered by princeton university economics professor burton g malkiel in his 1973 book a random walk down wall street the book in addition to touching on random walk theory describes the efficient market hypothesis and the other two degrees of efficient market hypothesis semi strong form efficiency and strong form efficiency unlike weak form efficiency the other forms believe that past present and future information affects stock price movements to varying degrees 1uses for weak form efficiencythe key principle of weak form efficiency is that the randomness of stock prices make it impossible to find price patterns and take advantage of price movements specifically daily stock price fluctuations are entirely independent of each other it assumes that price momentum does not exist additionally past earnings growth does not predict current or future earnings growth weak form efficiency doesn t consider technical analysis to be accurate and asserts that even fundamental analysis at times can be flawed it s therefore extremely difficult according to weak form efficiency to outperform the market especially in the short term for example if a person agrees with this type of efficiency they believe that there s no point in having a financial advisor or active portfolio manager instead investors who advocate weak form efficiency assume they can randomly pick an investment or a portfolio that will provide similar returns real world example of weak form efficiencysuppose david a swing trader sees alphabet inc googl continuously decline on mondays and increase in value on fridays he may assume he can profit if he buys the stock at the beginning of the week and sells at the end of the week if however alphabet s price declines on monday but does not increase on friday the market is considered weak form efficient similarly let s assume apple inc appl has beaten analysts earnings expectation in the third quarter consecutively for the last five years jenny a buy and hold investor notices this pattern and purchases the stock a week before it reports this year s third quarter earnings in anticipation of apple s share price rising after the release unfortunately for jenny the company s earnings fall short of analysts expectations the theory states that the market is weakly efficient because it doesn t allow jenny to earn an excess return by selecting the stock based on historical earnings data investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment objectives risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors investing involves risk including the possible loss of principal | |
what are weak hands | weak hands is a term often used to describe traders and investors who lack conviction in their strategies or lack the resources to carry them out it also refers to a futures trader who never intends to take or provide delivery of the underlying commodity or index weak hands can be contrasted with strong hands or diamond hands understanding weak handsthe term weak hands typically refers to an investor or trader who is driven by fear to quickly exit positions on almost any news or event that they consider detrimental resulting in realized losses and suboptimal returns on investment roi they tend to adhere to a set of rules that makes their trading activities predictable and are easily shaken out by normal market price gyrations the net result is that they end up buying at the highs and selling at the lows a surefire way to lose money weak hands can also describe a trader forex equity fixed income futures or any other class who approaches the market from the viewpoint of a speculator and more likely a small speculator rather than an investor they will normally enter and exit positions with the intention of reversing those positions based on small price movements typically this is a trader without the necessary conviction or financial resources to hold on to their positions a less known definition of the term weak hands is that of a futures trader who does not intend to take or provide delivery of the underlying asset this by default lumps them as a speculator in all markets weak hands exhibit predictable behavior this can include buying immediately after the market breaks to the upside from a technical pattern on the charts or selling immediately after the market breaks to the downside dealers and institutional traders will exploit this behavior by buying when weak hands sell and selling when weak hands buy this forces the weak hands out before the market starts to move in the originally desired direction the sentiment factorthe biggest challenge for investors and traders is buying or selling at the very worst time for example when a bear market nears its end the news is at its worst losses for those who held on as the market fell are at a maximum and fear becomes the driver in people s minds however valuations are likely to be cheap and charts might point out technical conditions conducive for buying not selling at this point sentiment is at an extreme for bearishness and weak hands only see the fear conversely strong hands who tend to be well financed see the opportunity they know they can buy even if the price dips further because they have the resources to handle the drawdown since major bear markets are relatively infrequent a more likely example of weak hands is when the stock of a strong company with solid fundamentals and chart patterns falls in sympathy with the stock of a related company that issues bad news on earnings or some other business event weak hands quickly sell but the stock rebounds sharply there was nothing fundamentally wrong with that stock in the first place so the price dip was a buying opportunity investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment objectives risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors investing involves risk including the possible loss of principal | |
what are weak longs | weak longs are investors who hold a long position and are quick to exit that position at the first sign of weakness this type of investor is typically trying to capture the upside potential of a security but without significant loss these investors will quickly close their positions when a trade does not move in their favor understanding weak longsweak longs are often short term traders rather than long term investors because they are unwilling to hold their positions through market fluctuations if a trade does not move in their favor they will quickly close their positions and look elsewhere for opportunities most weak longs are momentum traders who are more interested in a quick profit than investing in undervalued companies until they reach a fair value | |
when weak longs close their position it may present an opportunity for other investors to buy into the dip the selling pressure that weak longs create when closing their positions can lead to consolidation in a stock after a significant uptrend this explains why stocks tend to top out after following an earnings announcement because these traders lock in their profits and move on to other investment opportunities | the benefit of a weak long is that the investor can secure profits immediately rather than succumbing to the disposition effect holding onto a losing stock for too long however weak longs tend to generate substantial churn in their portfolio making it harder to remain profitable such as through the use of a long term investing strategy example of weak longs | |
when a company announces favorable earnings for the quarter short term traders may buy the stock at the open to capitalize on the run up while long term investors may add the stock to their existing positions weak longs will hold the stock until it begins to consolidate following an earnings run up selling the stock and moving on to other opportunities long term investors will continue holding the stock | long term investors may take advantage of the consolidation to add to their position and lower their cost basis long term investors may wait on the sidelines following a positive earnings announcement and buy the stock after it begins to move lower and consolidate this allows them to buy the stock at a lower price and ultimately increase their long term profit potential investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment objectives risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors investing involves risk including the possible loss of principal | |
what are weak shorts | weak shorts refer to traders or investors who hold a short position in a stock or other financial asset who will exit at the first indication of price strength weak shorts are typically investors with limited financial capacity precluding them from taking absorbing too much risk on a short position a weak short will generally have a tight stop loss order in place on the short position to cap the loss on the short trade weak shorts are conceptually similar to weak longs though the latter employ long positions understanding weak shortsweak shorts are more likely to be carried by retail traders rather than institutional investors since the retail trader s financial capacity is limited that said even institutional investors may find themselves in the weak short camp if they are financially stretched and cannot afford to commit more to trade the presence of weak shorts may intensify volatility in stock because weak shorts will be inclined to exit their short positions if the stock shows signs of strengthening such short covering may drive the stock price up rapidly forcing other traders with short positions to close them for fear of a short squeeze if the stock begins to weaken and is vulnerable the weak shorts may reinstate their short positions weak shorts may be constrained by the availability of capital but may still have a high degree of conviction in their short strategy heavy shorting accentuates the stock s weakness driving its price down quickly a trading pattern that leads to stock volatility for a retail trader that is day trading or swing trading a weak short is a positive by exiting early when a stock no longer looks weak the trader limits their risk and saves their capital for the short trades that are acting weak but are profitable stocks or other financial assets that have a substantial weak short presence will often be more volatile than those with less of a weak short presence | |
how to bet against weak shorts | traders often look for stocks with heavy short interest a contrarian indicator to identify stocks poised to move up on a short squeeze stocks that are heavily shorted by retail investors are better short squeeze candidates than those held by institutions with deep pockets such as hedge funds one way to identify retail short interest is by using trading software that shows major holders of the stock and block trades a stock with a minimal institutional holdings b few block trades and c significant short interest is likely to be one with a disproportionate number of weak shorts traders can wait for the price to strengthen potentially moving above a key resistance level where many short trade stop loss orders are placed a trader initiates a long position in anticipation of a further rise as weak short traders are forced out of their position weak short vs the put call ratioputs are another way to bet on a declining stock price the put call ratio measures the number of puts bought versus the number of calls those that profit if the stock price rises the ratio indicates when traders have become extremely bearish or bullish on a stock this can be used as a contrarian indicator that a reversal in price may be forthcoming limitations of using weak shortsit is hard to predict the number of weak shorts and difficult to decipher if the short positions are held because the stock is falling whether weak shorts or not these traders are in the correct position to profit and buying into them may be foolish trying to force weak shorts out of a position causing a price pop may prop the price up temporarily but unless positive news fundamentals or technicals emerge additional buyers may not decide to enter and the price will continue to fall weak shorts are a strategy that can t be measured with great accuracy therefore it s unknown exactly how many weak shorts there are or how weak they are investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment objectives risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors investing involves risk including the possible loss of principal | |
what is a weak sister | weak sister is a slang term for an element that undermines an entire system the term can either refer to a single individual or a specialized group that is considered to be the weak and undependable link in an integrated process understanding weak sistersweak sisters are what hold someone or something back it could be a malfunctioning part of a team oriented task such as the slowest member of an assembly line or a sluggish marketing team alternatively it may describe a security economy or business unit that performs worse than others weak sister is similar to the term the weakest link in the chain both refer to someone or something that risks single handedly bringing about the failure of the system or the group it belongs to weakest link came from the proverb a chain is only as strong as its weakest link in other words one substandard link may cause a chain to break even though the other stronger links may hold when put under pressure this saying can be traced to the work of thomas reid in essays on the intellectual powers of man published in the mid 1780s reid wrote in every chain of reasoning the evidence of the last conclusion can be no greater than that of the weakest link of the chain whatever may be the strength of the rest 1example of a weak sisterweak sisters can appear in every industry for instance in an investment portfolio there is usually at least one laggard that weighs on total returns for example suppose there is an investor mark who has invested in five different stocks company a company b company c company d and company e over the past three years four of the five stocks have done admirably comfortably beating the rest of the stock market with returns between 17 and 40 unfortunately that impressive performance has been undermined somewhat by the weak sister company c returned just 2 because a large chunk of the business its energy arm experienced tepid demand for its products and services as a result of a fall in the price of oil tricky trading conditions in that division ended up weighing on the average return of the whole portfolio bringing it in line with the market average or below if you factor in fees weak sisters can also refer to entire countries following the great recession europe struggled to pay off all the debts it had accumulated in what became known as the eurozone debt crisis five of the region s countries greece ireland italy portugal and spain took the majority of the blame these nations were accused of lacking fiscal prudence not generating enough economic growth and being at risk of defaulting on their bonds special considerationsjust because something or someone is referred to as a weak sister does not mean it is beyond saving weak sisters might not always be undependable in many cases what struggled and held everything back one year might bounce back in the next one for instance once the oil price rebounds company c might likely go from the weak sister to the biggest outperformer in mark s portfolio jittery investors pushed the valuation down to reflect the challenges facing the sector that means the stock will look incredibly cheap if sentiment improves and trading picks up again market cycles and business trading conditions shift over time leading various asset classes to fall in and out of favor for many investors there s lots of money to be made from identifying weak sisters and determining before the rest of the market when they have bottomed out weak sisters can also become stronger with a few important tweaks made from the inside certain capital expenditure capex or cost cutting strategies can transform a bloated misfiring laggard into a much leaner and meaner proposition | |
what is wealth | wealth measures the value of all the assets of worth owned by a person community company or country wealth is determined by taking the total market value of all physical and intangible assets owned then subtracting all debts essentially wealth is the accumulation of scarce resources specific people organizations and nations are said to be wealthy when they are able to accumulate many valuable resources or goods wealth can be contrasted with income in that wealth is a stock and income is a flow and it can be seen in either absolute or relative terms investopedia theresa chiechiunderstanding wealthwealth can be expressed in a variety of ways in a purely material sense wealth consists of all the real resources under one s control financially net worth is the most common expression of wealth definitions and measures of wealth have been different over time among societies in modern society money is the most common means of measuring wealth measuring wealth in terms of money is an example of money s function as a unit of account the extent to which outside forces can manipulate the value of money can have a dramatic impact on measuring wealth in this way but it provides a convenient common denominator for comparison otherwise land and even livestock can be used to measure and evaluate wealth the ancient egyptians for instance once measured wealth based on wheat herding cultures have often used sheep horses or cattle as measures of wealth | |
how to measure wealth | measuring wealth in terms of money overcomes the problem of evaluating wealth in the form of different kinds of goods these values can then be added or subtracted together this in turn permits the convenient use of net worth as a measure of wealth net worth is equal to assets minus liabilities for businesses net worth is also known as shareholders equity or book value in commonsense terms net worth expresses wealth as all the real resources under one s control excluding those that ultimately belong to someone else wealth is a stock variable as opposed to a flow variable like income wealth measures the amount of valuable economic goods accumulated at a given point in time income measures the amount of money or goods obtained over a given interval of time income represents the addition to wealth over time or subtraction if it is negative a person whose net income is positive over time will become increasingly wealthy over time for countries gross domestic product gdp can be thought of as a measure of income a flow variable though it is often erroneously referred to as a measure of wealth a stock variable anyone who has accumulated a large quantity of net worth can be considered wealthy but most people think of this term in more of a relative sense whether measured in terms of money and net worth or in commodities like wheat or sheep total wealth can vary among individuals and groups the relative differences in wealth between people are what we usually refer to in order to define who is wealthy or not research has consistently shown that people s perception of their own well being and happiness depends much more on their estimates of wealth relative to other people than on absolute wealth this is also part of why the concept of wealth is usually applied only to scarce economic goods goods that are abundant and free for everyone provide no basis for relative comparisons across individuals the united states is home to most of the world s wealthiest people including 735 billionaires 1arkansas based retailer walmart is one of the wealthiest corporations in the u s with annual revenue exceeding the gdp of many countries for 2021 it recorded 559 billion in revenue with a presence in 24 countries worldwide 2 ranked number one on the fortune 500 list in 2022 walmart operates more than 10 500 stores globally and serves more than 220 million customers weekly 32the net worth of the world s wealthiest person tesla spacex ceo elon musk as of sept 2 2022 4equally as impressive wealthy ecommerce giant amazon boasted revenue of 386 billion for 2021 earning it the number two position on fortune s list despite experiencing a leadership change and a shortage of workers the company continued to flourish in 2021 posting profits more than 54 higher vs 2020 its market capitalization 1 66 trillion as of march 31 2022 has also positioned it as one of the wealthiest companies in the world 5 | |
how do you build wealth | to build wealth one must allocate a portion of their income to savings and investments over time | |
how much wealth does the top 1 own | the top 1 of wage earners hold 31 9 of wealth in the united states as of june 29 2022 6 | |
what is wealth management | wealth management refers to the financial investment and advisory services provided to clients with a high net worth | |
what is generational wealth | generational wealth are the assets passed down to successive familial generations | |
what is the great gatsby curve | the great gatsby curve illustrates the relationship between income inequality in a country and the potential for its citizens to achieve upward mobility graphs that depict these two variables suggest a strong positive correlation between inequality and a lack of upward advancement from one generation to the next the bottom linethe concept of wealth is subjective largely depending on one s perception and measure of value for most money is the common unit of measurement and those with an abundance of it are deemed wealthy there are many strategies for amassing wealth however there is no prescription for all despite variations in how it is expressed wealth often affords access and opportunities that would ordinarily be inaccessible without it | |
what does wealth added index mean | wealth added index wai is a metric designed by stern value managament a consulting firm that attempts to measure value created or destroyed for shareholders by a company according to this calculation method wealth is created only if the returns of a company inclusive of share price gains and dividends exceed its cost of equity understanding wealth added index wai the conceptual foundation of the wealth added index is that the cost of equity for a company should be greater than the return available on risk free securities such as government bonds because a company is riskier the greater the risk an investor assumes the greater the return required if a company s returns do not exceed its cost of equity then shareholders should invest their money elsewhere in other words according to the wai if the return is less than the cost of equity the company is actually destroying shareholder value if the return exceeds the cost of equity the company is adding wealth for its shareholders wai is similar to economic value added eva another stern value management measure in that the cost of capital is compared to returns traditional accounting return metrics like return on equity roe and return on assets roa do not consider the other side the cost of capital to achieve these returns over a certain period a company can show a high roe for example but if the cost of capital to achieve that roe was even greater then the value was destroyed by the company but there are two key differences between wai and eva first and most important eva is backward looking calculating only results that have already transpired wai by contrast takes into account both past share price performance and prospective performance because equity value of a company is the present value of all future cash flows the current share price of a company s stock will reflect the future prospect of value creation or wealth added second eva is limited in providing cross border comparisons because it relies on accounting methodologies within individual countries therefore for instance eva of a utility company in the u s will not be directly comparable to the eva of a utility company in spain because different accounting standards are used to derive reported profits with a focus on the movement of the share price and dividends readily available for calculation anywhere wai is able to overcome this limitation | |
what is the wealth effect | the wealth effect is a behavioral economic theory suggesting that people spend more as the value of their assets rise the idea is that consumers feel more financially secure and confident about their wealth when their homes or investment portfolios increase in value they are made to feel richer even if their income and fixed costs are the same as before maskot getty images | |
how the wealth effect works | the wealth effect reflects the psychological effect that rising asset values such as those that occur during a bull market have on consumer spending behavior the concept hones in on how the feelings of security referred to as consumer confidence are strengthened by sizable increases in the value of investment portfolios extra confidence contributes to higher levels of spending and lower levels of saving this theory can also be applied to businesses companies tend to increase their hiring levels and capital expenditures capex in response to rising asset values in a similar fashion to that observed on the consumer side | |
what this means is economic growth should strengthen during bull markets and erode in bear markets | special considerationsat first glance the notion that the wealth effect spurs personal consumption makes sense it is reasonable to assume that anyone sitting on huge gains from a house or stock portfolio would be more inclined to splash out on an expensive holiday new car or other discretionary items nevertheless critics claim that increasing asset wealth should have a much smaller impact on consumer spending than other factors such as tax household expenses and employment trends why because a gain in the value of an investor s portfolio does not actually equate to higher disposable income initially stock market gains must be considered unrealized an unrealized gain is a profit that exists on paper but that has yet to be sold in return for cash the same applies to rocketing property prices example of the wealth effectproponents of the wealth effect can point to several occasions when significant interest rate and tax increases during bull markets failed to put the brakes on consumer spending events in 1968 offer a good example taxes were hiked by 10 yet people continued to spend more even though disposable income declined because of the additional tax burden wealth continued to grow as the stock market persistently climbed higher criticism of the wealth effectstill there is considerable debate among market pundits about whether or not the wealth effect truly exists especially within the context of the stock market some believe the effect has more to do with correlation and not causation proposing that increased spending leads to asset appreciation not the other way around there is also a school of thought that promotes the pigou effect theory here when prices fall individuals gain purchasing power and raise consumption rates which leads to higher employment rates housing vs stock market wealth effectwhile it has yet to be definitively connected there is more robust evidence linking increased spending to higher home values economic luminaries karl case and robert shiller the developers of the case shiller home price indices together with john quigley set out to research the wealth effect theory by compiling data from 1982 to 1999 the results presented in a paper titled comparing wealth effects the stock market versus the housing market found at best weak evidence of a stock market wealth effect but strong evidence that variations in housing market wealth have important effects upon consumption the authors later extended their study of wealth and consumer spending in a panel of u s states to an expanded 37 year period from 1975 to the second quarter of 2012 the results released in january 2013 revealed that an increase in housing wealth similar to the rise between 2001 and 2005 would boost household spending by a total of about 4 3 over the four years in contrast a fall in housing wealth comparable to the crash between 2005 and 2009 would cause a spending drop of roughly 3 5 several other economists have supported claims that an increase in housing wealth encourages extra spending however others dispute these theories and claim that previous research on the topic has been overstated | |
what is wealth management | wealth management is an investment advisory service that uses financial services to address the needs of affluent clients using a consultative process the advisor gleans information about the client s wants and specific situation then tailors a personalized strategy that uses a range of financial products and services wealth management often takes a holistic approach to meet the complex needs of a client a broad range of services such as investment advice estate planning accounting retirement and tax services may be provided while fee structures vary across comprehensive wealth management services typically fees are based on a client s assets under management aum understanding wealth managementwealth management is more than just investment advice it can encompass all parts of a person s financial life instead of attempting to integrate pieces of advice and various products from multiple professionals high net worth individuals may be more likely to benefit from an integrated approach in this method a wealth manager coordinates the services needed to manage their clients assets along with creating a strategic plan for their current and future needs whether it is will and trust services or business succession planning many wealth managers can provide services in any aspect of the financial field but some choose to specialize in particular areas such as cross border wealth management this may be based on the expertise of a specific wealth manager or the primary focus of the business within which the wealth manager operates in certain instances a wealth management advisor may need to coordinate input from outside financial experts as well as from the client s own service professionals for example an attorney or accountant to craft the optimal strategy to benefit the client some wealth managers also provide banking services or advice on philanthropic activities wealth management examplegenerally speaking wealth management offices have a team of experts and professionals available across different fields for instance consider a client who has 2 million in investable assets in addition to a trust for their grandchildren and a partner who has recently passed away a wealth management office would not only invest these funds in a discretionary account but also provide will and trust services required for tax minimization and estate planning wealth management advisors in the direct employ of an investment firm may have more knowledge in the area of investment strategy while those who work for a large bank may focus on the management of trusts and available credit options overall estate planning or insurance options in short expertise may vary across different firms wealth management business structureswealth managers may work as part of either a small scale business or a larger firm one generally associated with the finance industry depending on the business wealth managers may function under different titles including financial consultant or financial advisor a client may receive services from a single designated wealth manager or may have access to members of a specified wealth management team fees for a wealth manageradvisors can charge for their services in several ways some work as fee only advisors and charge an annual hourly or flat fee some work on commission and are paid through the investments that they sell fee based advisors earn a combination of a fee plus commissions on the investment products that they sell a survey of financial advisors found that the median advisory fee up to 1 million aum is just around 1 1 however some advisors charge more especially on smaller account balances individuals with larger balances can often pay substantially less with the median aum fee declining as assets increase 2newer fully automated roboadvisor platforms intended as wealth management tools for ordinary individuals often charge far less than 1 per year of aum and come with low minimum account balances to get started credentials for wealth managersyou should check the credentials of a professional to see which designation and training might best suit your needs and situation the top three professional advisor credentials are certified financial planner chartered financial analyst and personal financial specialist many websites for professional certifying organizations allow you to vet if a member is in good standing or has had disciplinary actions or complaints 34the financial industry regulatory authority finra has a tool that explains professional designations you can also see whether the issuing organization requires continuing education takes complaints or has a way for you to confirm who holds the credentials 5 | |
what do wealth managers earn | according to indeed the average salary for a wealth manager in the united states in 2024 was 134 900 6 | |
is a wealth manager the same as a financial planner | while some professionals are both wealth managers and financial planners a key difference between financial planners and wealth managers is that the letter are focused on assets and investments while planners also consider everyday household finances insurance needs and so on | |
how much money does the wealth management industry manage | as of 2024 it is estimated that the wealth management industry had aum of upwards of 128 9 trillion globally 7 this figure is expected to grow to 145 4 trillion by the year 2025 8the bottom linea wealth manager starts by developing a plan that will maintain and increase a client s wealth based on their financial situation goals and risk tolerance each part of a client s financial picture whether it s tax planning or wills and estates are coordinated together to protect the wealth of the client this may coincide with financial projections and retirement planning after the original plan is developed the manager meets regularly with clients to update goals and rebalance the financial portfolio at the same time they may investigate whether additional services are needed the ultimate goal is to remain in the client s service throughout their lifetime | |
what is a wealth psychologist | a wealth psychologist is a mental health professional who specializes in issues relating specifically to wealthy individuals wealth psychologists are also called money psychologists or wealth counselors wealth psychologists help their ultra rich clients deal with issues such as the guilt they feel about being wealthy or advise on inheritance issues and counsel parents on how to raise children who are not spoiled by money wealth psychologist explainedwealth psychologists assist many modern wealthy families most of which built their wealth in one generation they may not be comfortable with all aspects of being rich and may have a lot of guilt associated with it even for those people who find themselves financially prepared more are beginning to realize they may not be psychologically or emotionally prepared to cope with wealth ample evidence points to the notion that the more people are prepared in this way the happier they are throughout their remaining life stages the younger people are when they begin to work toward full preparation the more productive their lives wealth psychology s role in holistic planningfinancial planning that emphasized the quantitative side of life has given way to a practice intended to broaden the scope and clarity of one s vision of the future and the values that drive the commitment to living a full and complete life expectations of longer lives uncertainty over a frail economy fear of market risk disillusionment with government and concerns over world chaos are contributing factors to new attitudes about money and happiness some private wealth management and financial services firms retain wealth psychologists to train their financial advisors or provide individual counseling to clients wealth psychologists are increasingly included as a part of a client s advisory team engaged in a holistic financial planning process their focus is on helping clients better understand their values attitudes and beliefs about money to better cope with self limiting or self destructive behaviors at the center of their relationship with money or with a family of wealth preparing future generations for wealthwealth psychology is becoming more prominent in legacy planning preparing family members and future generations for the emotional transfer of wealth while the precepts for effectively maximizing the transfer of assets are well established within the traditional wealth management community the guiding principles for preparing family members and future generations for the emotional transfer of values and beliefs are often minimized or ignored the role of the wealth psychologist is to help families bridge the communication and trust gap for building solidarity of vision and purpose among disparate family members and generations | |
what is a wealth tax | a wealth tax is a tax based on the market value of assets owned by a taxpayer some developed countries choose to tax wealth although the united states has historically relied on taxing annual income to raise revenue during the 2020 election the immense and increasing disparity in wealth in the united states prompted politicians such as sen bernie sanders i vt and sen elizabeth warren d mass to propose a wealth tax in addition to the income tax in march 2021 warren introduced s 510 a revised version of her earlier proposal to impose a tax on the net worth of very wealthy individuals although the first version failed a new version of her proposal was introduced in 2024 understanding wealth taxesa wealth tax also called capital tax or equity tax is imposed on the wealth possessed by individuals the tax usually applies to a person s net worth which is assets minus liabilities these assets include but are not limited to cash bank deposits shares fixed assets personal cars real property pension plans money funds owner occupied housing and trusts an ad valorem tax on real estate and an intangible tax on financial assets are both examples of a wealth tax 1 generally countries that impose wealth taxes also impose income and other taxes only four organisation for economic co operation and development oecd countries currently levy a net wealth tax france norway spain and switzerland 2 previously in the early 1990s 12 countries reportedly imposed a wealth tax indicating that the popularity of this form of taxation is diminishing 3in the united states federal and state governments do not impose wealth taxes instead the u s imposes annual income and property taxes however some consider property tax a form of wealth tax as the government taxes the same asset year after year the u s also imposes an estate tax on the death of individuals owning high value estates 4however that levy represents a relatively insignificant contribution to u s tax receipts for example in 2020 the total collections from gift and estate taxes were equivalent to only 0 1 of u s gdp 5examples of a wealth taxin effect a wealth tax impacts the net value of the assets accumulated over time and owned by a taxpayer as of the end of each tax year an income tax impacts the flow of the additions in value that a taxpayer realizes whether as earnings investment returns such as interest dividends or rents and or profits on disposition of assets during the year let s look at an example of how the wealth tax differs from income tax assume a single taxpayer earns 120 000 annually and falls in the 24 tax bracket that individual s liability for the year will be 24 120 000 28 800 what is the tax liability if the government taxes wealth instead of income if the taxpayer s assessed net worth is 450 000 and the wealth tax is 24 then the tax debt for the year will be 24 450 000 108 000 in reality annual wealth tax rates are significantly lower than annual income tax rates in france for example the wealth tax used to apply to total worldwide assets 6 as of 2023 however it only applied to real estate assets worth more than 1 3 million 1 400 000 if the value of those assets is greater than 1 3 million the calculation of wealth tax starts at 800 000 6assets between 800 000 and 1 300 000 are subject to a 0 5 tax rates continue to rise at graduated thresholds 0 7 1 1 25 until finally real estate assets over 10 000 000 are taxed at 1 5 a wealth tax cap limits total taxes to 75 of income 76if a taxpayer is not a resident of a particular country then the wealth tax generally only applies to their holdings in that country sen warren s wealth tax proposalhere s sen warren s original 2021 proposal which was to take effect in the 2023 tax year upon introduction the bill had seven senate co sponsors sens kirsten gillibrand mazie hirono edward markey jeff merkley bernie sanders brian schatz and sheldon whitehouse an eighth senator alex padilla later became another co sponsor two house co sponsors reps brenda f boyle and pramila jayapal supported a companion bill in that chamber although the bill died in committee after the second reading sen warren re introduced her wealth tax legislation with nearly identical proposals in march 2024 reps boyle and jayapal sponsored equivalent legislation in the house of representatives 9810pros and cons of a wealth taxproponents of wealth taxes believe this type of tax is more equitable than an income tax alone particularly in societies with significant wealth disparity they believe that a system that raises government revenue from both the income and the net assets of taxpayers promotes fairness and equality by taking into account taxpayers overall economic status and thus their ability to pay tax critics allege that wealth taxes discourage the accumulation of wealth which they contend drives economic growth they also emphasize that wealth taxes are difficult to administer administration and enforcement of a wealth tax present challenges not typically entailed in income taxes the difficulty of determining the fair market value of assets that lack publicly available prices leads to valuation disputes between taxpayers and tax authorities uncertainty about valuation also could tempt some wealthy individuals to try tax evasion direct wealth taxes have been repealed in several countries partly because they tend to scare off wealthy people and hinder foreign investment illiquid assets present another issue for a wealth tax owners of significant illiquid assets may lack ready cash to pay their wealth tax liability this creates a problem for people who have low incomes and low liquid savings but own a high value illiquid asset such as a home similarly a farmer who earns little but owns land with a high value may have trouble coming up with the money to pay a wealth tax some accommodations may be feasible to address administrative and cash flow issues for example allowing tax payments to be spread over a period of years or creating special treatment for specific asset categories such as business assets however exceptions could undermine the purpose that many attach to a wealth tax structuring the overall tax system to make all taxpayers pay their fair share | |
does the united states have a wealth tax | the united states imposes property and estate taxes but does not have a general wealth tax however that could soon change u s sen elizabeth warren d mass and some of her peers are trying to push through a bill that would see households and trusts worth over 50 million get taxed a percentage of their net worth either 2 or 3 each year 10 | |
what is good about a wealth tax | proponents view the wealth tax as a way to boost the government s public spending coffers by taking extra money from those who don t really need it such a tax generally only applies to the wealthiest and it can be argued that the money it will cost them will have zero impact on their quality of life | |
what is the downside of a wealth tax | a wealth tax is difficult to administer tends to encourage tax evasion and has the potential to drive the wealthy away from countries that enforce it these caveats coupled with debates about how to implement it fairly perhaps explain why so few countries in the world impose such a tax on their residents the bottom linea wealth tax is a levy on the total value of a person s assets as opposed to taxes on their income real estate or asset sales wealth taxes have been implemented in some european countries and proposed by u s politicians as a way of moderating extreme wealth inequality | |
what is a wear and tear exclusion | a wear and tear exclusion is a provision in an insurance policy that states that the normal deterioration of the insured object is not covered by the insurance policy insurance is designed only to protect against unforeseen losses if insurance covered inevitable losses insurers would have to raise their premiums dramatically to cover the expenses understanding the wear and tear exclusionwear and tear exclusions are fairly common auto insurance policies for example do not cover the cost of replacing auto parts that deteriorate with time and use such as brake pads timing belts and water pumps auto insurance policies cover only unpredictable events such as collisions 1 wear and tear exclusions are designed to keep an insurer from being held liable when damage results from a customer s failure to properly maintain repair and replace deteriorated or defective portions of the insured property to prepare for predictable losses from wear and tear owners can self insure by setting aside money each month in an emergency fund the exclusions and limitations that are specified in the contract are what determine if a property loss is covered the list of exclusions is generally extensive an insurance company may cite wear and tear on a claim in an effort to avoid a contractual payment in the case of a natural disaster such as a flood or tornado insurers will often try to invoke wear and tear and blame the property damage on a preexisting condition other common exclusions include poor maintenance prior damage manufacturing defects or faulty installation roof damage claims are often a cause of contention insurers may point to the age of the roof or its maintenance record as a cause of the damage instead of a hailstorm damage to older properties is often the cause of disputes between insured and insurer a dispute over a claim can result in an insurance bad faith lawsuit this is particularly common when older commercial properties are damaged an insurance company will inspect the property prior to selling the policy and the report may show the property was in acceptable or even good condition but the insurance company may still attempt to make the wear and tear argument 2 a wear and tear exclusion will not have what is commonly referred to as anti concurrent cause lead in language this indicates that damage caused or aggravated by multiple factors including covered and uncovered causes will not be covered an illinois court ruled in 1983 that in the absence of such anti concurrent cause lead in language when a covered and an uncovered peril combine to cause a loss the whole loss is covered 3 | |
what is wearable technology | wearable technology also known as wearables is a category of electronic devices that can be worn as accessories embedded in clothing implanted in the user s body or even tattooed on the skin the devices are hands free gadgets with practical uses powered by microprocessors and enhanced with the ability to send and receive data via the internet the rapid adoption of such devices has placed wearable technology at the forefront of the internet of things iot | |
how wearable technology works | wearable technology can be said to have existed since eyeglasses were first developed in the 13th century timepieces small enough to be worn have been around since about 1500 but modern wearable technology is defined as incorporating a microprocessor and an internet connection the growth of mobile networks enabled the development of wearable technology fitness activity trackers were the first big wave of wearable technology to catch on with consumers then the wristwatch became a screen and more robust mobile applications were added bluetooth headsets smartwatches and web enabled glasses all allow people to receive data from wi fi networks the gaming industry adds more wearables with virtual reality and augmented reality headsets specialized and practical applicationsthere have been some flops too notably google glass the internet connected eyeglasses may yet re emerge for specialized uses but they most definitely did not make it as a fashion accessory the focus in the development of wearable technology now appears to be moving from consumer accessories to more specialized and practical applications microchip implants are now being used to replace keys and passwords embedded in a fingertip the chips use near field communication nfc or radio frequency identification rfid and are similar to the chips used to track lost pets the real life altering applications in wearable technology however can be found in medical devices cyrcadia health has developed cyrcadia breast monitor an intelligent patch that can detect early signs of breast cancer and transmit the information to a lab for analysis 1examples of wearable technologythe past few years have seen rapid development and introduction of wearable technology products adapted for medical and healthcare uses these include | |
what is a weather derivative | a weather derivative is a financial instrument used by companies or individuals to hedge against the risk of weather related losses the seller of a weather derivative agrees to bear the risk of disasters in return for a premium if no damages occur before the expiration of the contract the seller will make a profit and in the event of unexpected or adverse weather the buyer of the derivative claims the agreed amount understanding weather derivativesthe profitability and revenues of virtually every industry agriculture energy entertainment construction travel and others depend to a great extent on the vagaries of temperature rainfall and storms unexpected weather rarely results in price adjustments that entirely make up for lost revenue making weather derivatives securities that allow companies to hedge against the possibility of weather that might adversely affect their business a pivotal investment for many companies whose business depends on the weather such as hydroelectric businesses or those who manage sporting events might use weather derivatives as part of a risk management strategy farmers meanwhile may use weather derivatives to hedge against a poor harvest caused by too much or too little rain sudden temperature swings or destructive winds it is estimated that nearly one third of the world s gdp is affected by the climate 1in 1997 weather derivatives began trading over the counter otc and within a few years they had become tradeable on an exchange and treated by some hedge funds as an investment class the chicago mercantile exchange cme lists weather futures contracts for a few dozen cities the majority of them in the u s 2cme weather futures unlike otc contracts are standardized contracts traded publicly on the open market in an electronic auction type of environment with continuous negotiation of prices and complete price transparency investors who like weather derivatives appreciate their low correlation with traditional markets types of weather derivativesweather derivatives typically have a basis to an index that measures a particular aspect of weather for example an index might be the total rainfall over a specified period in a specific place another can be for the number of times the temperature falls below freezing one climate index for weather derivatives is known as heating degree days or hdd under hdd contracts each day the daily mean temperature falls below a predetermined reference point over a specified period the amount of the departure is recorded and added to a cumulative count the final figure determines whether the seller pays out or receives payment weather derivatives vs insuranceweather derivatives are similar to but different from insurance insurance covers low probability catastrophic weather events such as hurricanes earthquakes and tornadoes in contrast derivatives cover higher probability events such as a dryer than expected summer insurance does not protect against the reduction of demand resulting from a slightly wetter summer than average for example whereas weather derivatives can do just that since weather derivatives and insurance cover two different possibilities a company might have an interest in purchasing both also since the contract is index based buyers of weather derivatives do not need to demonstrate a loss in order to collect insurance on the other hand the damage must be shown weather derivatives vs commodity derivativesone important point that differentiates utilities commodity derivatives power electricity agricultural and weather derivatives is that the former set allows hedging on price based on a specific volume while the latter offers to hedge the actual utilization or the yield independent of the volume for instance one can lock the price of x barrels of crude oil or x bushels of corn by buying oil futures or corn futures respectively but getting into weather derivatives allows hedging the overall risk for yield and utilization a temperature dipping below 10 degrees will result in complete damage to wheat crop whereas rain on weekends in las vegas will impact city tours hence a combination of weather and commodity derivatives is best for overall risk mitigation | |
what are climate derivatives | climate derivatives are financial instruments used to hedge against financial losses related to adverse weather conditions such as droughts hurricanes and monsoons climate derivatives also known as weather derivatives work in a similar fashion to insurance the buyer of a climate derivative will receive a monetary payment as stipulated by the derivative contract by the seller of the derivative in the event a certain climate related event occurs or if the buyer suffers any financial loss due to a climate event | |
how do weather derivatives work | weather derivatives work as a contract between a buyer and a seller the seller of a weather derivative receives a premium from a buyer with the understanding that the seller will provide a monetary amount in case the buyer suffers an economic loss due to adverse weather or if any adverse weather occurs if no adverse weather event occurs then the seller makes a profit through the premium paid | |
what are the types of derivatives | a derivative is a financial instrument whose value is tied to an underlying asset the main types of derivatives are options futures forwards and swaps | |
what is weather future | weather future is a type of weather derivative where the payoffs are based on the aggregate difference in the measured weather variable usually the recorded temperature over a fixed period understanding weather futuresweather futures enable businesses to protect themselves against losses caused by unexpected shifts in weather conditions while businesses may have property casualty insurance policies to cover physical damage caused by relatively rare weather related events such as a windstorm or hail these insurance policies will not cover economic losses if customers aren t able to show up due to heavy rain or if crops fail to thrive in hot weather weather futures sprung up in the early 1990s as a way for firms to hedge their weather exposure based on changes to indexes that measure changes in average daily temperatures essentially a weather future obligates the buyer to purchase the cash value of the underlying weather index the most common weather future contract applies to the recorded temperature measured in heating degree days hdd or cooling degree days cdd at a future date the settlement price of the underlying weather index is typically equal to the value of the relevant month s hdd cdd multiplied by 20 an hdd is defined as the number of degrees that a day s average temperature is below 65o fahrenheit 18o celsius conversely a cdd is the number of degrees that a day s average temperature is above 65o fahrenheit 18o celsius 650 was chosen as a benchmark by the energy sector to delineate the temperature where minimal heating or cooling occurs in office buildings payout is dependent on the cumulative difference in the daily temperatures relative to the benchmark 650 over a fixed period the buyer of an hdd weather futures contract will stand to gain if the cumulative temperature is below the specified level as heating occurs when temperatures are lower the opposite would be true for the buyer of a cdd weather futures contract where they will stand to gain if the cumulative temperature is above the specified level as cooling occurs when temperatures are higher the popularity of weather futures is growing rapidly and becoming a more common method for energy companies or agricultural producers to hedge against a change in demand due to changes in temperature for example if the month of october is warmer than expected customers will not use as much heat this will cause a loss for the energy company if however the energy company has sold a weather future for the month of october the energy company will receive the value of october s hdd providing compensation for its losses it has been estimated that roughly 20 of the american economy is prone to be affected directly by the weather and that the profitability for virtually every industry sector e g agriculture energy travel and entertainment and construction to name just a few depend on fluctuations in temperature wind and precipitation during sworn testimony to congress in 1998 former commerce secretary william daley suggested weather is not just an environmental issue it is a major economic factor at least 1 trillion of our economy is weather sensitive weather futures and cmein 1999 the chicago mercantile exchange cme introduced exchange traded weather futures as well as options on those futures for the first time previously over the counter otc weather derivatives were privately negotiated individualized agreements made between two parties the cme weather futures and options on futures are standardized contracts traded publicly on the open market in an electronic auction type of environment with continuous negotiation of prices and complete price transparency measured in heating degree days hdd or cooling degree days cdd cme listed weather futures use such indexes to reflect monthly and seasonal average temperatures for 15 u s and five european cities and they are cash settled futures these contracts settlement prices are determined by the final monthly or seasonal index value as calculated by the earth satellite earthsat corp a global corporation specializing in geographic information systems gis other firms will determine values for non cme traded futures contracts | |
what is weather insurance | the term weather insurance refers to a form of financial protection against losses or damages incurred because of adverse measurable weather conditions these conditions generally include wind snow rain thunderstorms fog and undesirable temperatures weather insurance as a separate policy is commonly used to protect businesses and their related activities as such these policies serve various purposes such as insuring an expensive event that could be ruined by bad weather insurers cover insured entities if weather conditions cause a loss of revenue from events | |
how weather insurance works | weather influences our daily lives and can have a huge impact on corporate revenues and earnings so weather insurance taken out in a standalone insurance policy is commonly used to protect businesses and their related activities such as insuring an expensive event that could be ruined or severely impacted by bad weather 1 weather insurance can cover events like festivals concerts trade shows seasonal events parades film shoots fundraisers and sporting events 2 but it can also be used by individuals to cover major celebrations such as an outdoor wedding conventional weather insurance generally includes coverage for low probability meteorological events including hurricanes earthquakes and tornados insurers would offer reimbursement if weather conditions cause a loss of revenue from events or the cancellation of them outright the premium for weather insurance is based on several factors including the location and time of year in other words the dollar amount clients are charged for coverage is determined by the likelihood of the insured weather event occurring and the amount of potential loss an actuary at the insurance company looks at weather data going back many decades to decide how to price a policy if for example cleveland gets a white christmas every 10 years then the insurer knows that the probability of such an event is 10 and would set premium rates accordingly purpose of weather insuranceweather insurance is a necessity for many companies and is considered to be a key risk management strategy it s also highly customizable for example an insured party can choose the number of days weather events and severity of weather that will be covered by the policy businesses sometimes even use these policies as a sales gimmick to lure in customers for instance a furniture store may advertise that all buyers of furniture in december will get their purchases free if it snows more than two inches on christmas in such cases the store would buy a policy to cover this specific event protection against losses caused by adverse weather conditions is covered to a certain degree by other types of insurance policies such as homeowners insurance property insurance or special event insurance 3example of weather insurancelet s say an event planner is organizing an outdoor festival for a weekend in the summer although they sell tickets to the festival itself the event organizer also expects to earn revenue from sales of food drinks and products a cut of what various vendors are offering the organizer sets the date but is unsure about whether weather conditions will cooperate in order to make sure there are no hiccups during the festival the organizer decides to take out a weather insurance policy if the festival gets a poor turnout due to rain the organizer can file an insurance claim with the insurance company to make up lost revenue provided premiums are paid up weather insurance vs weather derivativesuntil recently insurance has been the main tool used by companies for protection against unexpected weather conditions the problem is that conventional insurance usually only provides coverage for catastrophic damage and does nothing to protect against the reduced demand businesses experience as a result of weather that is warmer or colder than expected percent of the u s economy that is directly affected by the weather 4enter weather derivatives they provide protection of a sort but they are not insurance rather they are financial instruments used by companies or individuals to hedge against the risk of weather related losses the seller of a weather derivative agrees to bear the risk of disasters in return for a premium that means that if no damages occur before the expiration of the contract they end up making a profit in the event of unexpected or adverse weather they pay the buyer of the derivative the agreed upon amount reimbursement in the late 1990s people began to realize if they quantified and indexed weather in terms of monthly or seasonal average temperatures and attached a dollar amount to each index value they could package and trade the weather the very first transaction of the sort was conducted in 1997 in a power contract by aquila energy 5from here the weather became a tradable commodity comparable to trading the varying values of stock indices currencies interest rates and agricultural commodities weather derivatives usually cover low risk high probability events weather insurance on the other hand typically protects against high risk low probability occurrences as defined in a highly customized policy because weather insurance and derivatives deal with two different possibilities a company might have an interest in purchasing both | |
what is web 2 0 | web 2 0 describes the current state of the internet which has more user generated content and usability for end users compared to its earlier incarnation web 1 0 web 2 0 generally refers to the 21st century internet applications that have transformed the digital era in the aftermath of the dotcom bubble understanding web 2 0the term web 2 0 first came into use in 1999 as the internet pivoted toward a system that actively engaged the user users were encouraged to provide content rather than just viewing it the social aspect of the internet has been particularly transformed in general social media allows users to engage and interact with one another by sharing thoughts perspectives and opinions users can tag share post and like web 2 0 does not refer to any specific technical upgrades to the internet it simply refers to a shift in how the internet is used in the 21st century in the new age there is a higher level of information sharing and interconnectedness among participants this new version allows users to actively participate in the experience rather than just acting as passive viewers who take in information because of web 2 0 people can publish articles and comments on different platforms increasing engaged content creation and participation through the creation of accounts on different sites it also gave rise to web apps self publishing platforms like wordpress medium substack as well as social media sites 1 examples of web 2 0 sites include wikipedia facebook x and various blogs which all transformed the way the same information is shared and delivered history of web 2 0in a 1999 article called fragmented future darcy dinucci coined the phrase web 2 0 in the article dinucci mentions that the first glimmerings of this new stage of the web were beginning to appear in fragmented future dinucci describes web 2 0 as a transport mechanism the ether through which interactivity happens 2the phrase became popularized after a 2004 conference held by o reilly media and medialive international tim o reilly founder and chief executive officer ceo of the media company is credited with the streamlining of the process as he hosted various interviews and web 2 0 conferences to explore the early business models for web content 3the interworking of web 2 0 has continually evolved over the years instead of a single instance of web 2 0 having been created its definition and capabilities continue to change for example justin hall is credited as being one of the first bloggers though his personal blog dates back to 1994 4advantages and disadvantages of web 2 0the development of technology has allowed users to share their thoughts and opinions with others creating new ways of organizing and connecting with other people one of the largest advantages of web 2 0 is improved communication through web applications that enhance interactivity collaboration and knowledge sharing this is most evident through social networking where individuals armed with a web 2 0 connection can publish content share ideas extract information and subscribe to various informational feeds this has brought about major strides in marketing optimization as more strategic targeted marketing approaches are now possible web 2 0 also brings about a certain level of equity most individuals have an equal chance of posting their views and comments and each individual may build a network of contacts because information may be transmitted more quickly under web 2 0 compared to prior methods of information sharing the latest updates and news may be available to more people unfortunately there are a lot of disadvantages to the internet acting more like an open forum through the expansion of social media we have seen an increase in online stalking doxing cyberbullying identity theft and other online crimes there is also the threat of misinformation spreading among users whether that s through open source information sharing sites or on social media individuals may blame web 2 0 for misinformation information overload or the unreliability of what people read as almost anyone can post anything via various blogs social media or web 2 0 outlets there is an increased risk of confusion on what is real and what sources may be deemed reliable as a result web 2 0 brings about higher stakes regarding communication it s more likely to have fake accounts spammers forgers or hackers that attempt to steal information imitate personas or trick unsuspecting web 2 0 users into following their agenda as web 2 0 doesn t always and can t verify information there is a heightened risk for bad actors to take advantage of opportunities web 2 0 vs web 1 0web 1 0 is used to describe the first stage of the internet at this point there were few content creators most of those using the internet were consumers static pages were more common than dynamic html which incorporates interactive and animated websites with specific coding or language content in this stage came from a server s file system rather than a database management system users were able to sign online guestbooks and html forms were sent via email examples of internet sites that are classified as web 1 0 are britannica online personal websites and mp3 com in general these websites are static and have limited functionality and flexibility dynamic information always changing less control over user inputpromotes greater collaboration as channels are more dynamic and flexibleconsidered much more social and interative drivenstatic information more difficult to change more controlled user inputpromoted individual contribution channels were less dynamicconsider much more informative and data drivenweb 2 0 vs web 3 0the world is already shifting into the next iteration of the web appropriately dubbed web 3 0 though both rely on many similar technologies they use the available capabilities to solve problems differently one strong example of web 3 0 relates to currency under web 2 0 users could input fiat currency information such as bank account information or credit card data this information could be processed by the receiver to allow for transactions web 3 0 strives to approach the transaction process using similar but different processes with the introduction of bitcoin ethereum and other cryptocurrencies the same problem can be solved in a theoretically more efficient way under web 3 0 web 3 0 is more heavily rooted in increasing the trust between users more often applications rely on decentralization letting data be exchanged in several locations simultaneously web 3 0 is also more likely to incorporate artificial intelligence or machine learning applications focuses on reading and writing contentmay be more susceptible to less secure technologymay use more antiquated simpler processing techniquesprimarily aims to connect peoplefocused on creating contentoften has more robust cybersecurity measuresmay incorporate more advanced concepts such as ai or machine learningprimarily aims to connect data or informationweb 2 0 componentsthere is no single universally accepted definition for web 2 0 instead it s best described as a series of components that when put together create an online environment of interactivity and greater capacity compared to the original version of the web here are the more prominent components of web 2 0 wikis are often information repositories that collect input from various users users may edit update and change the information within a web page meaning there is often no singular owner of the page or the information within as opposed to users simply absorbing information given to them wiki based sites such as wikipedia are successful when users contribute information to the site the early days of the web relied upon local software being installed on premises with web 2 0 applications gained a greater opportunity to be housed off site downloaded over the web or even offered as a service via web applications and cloud computing this has shepherded a new type of business model where companies can sell software applications on a monthly subscription basis often one of the aspects most thought of when discussing web 2 0 social networking is similar to wikis in that individuals are empowered to post information on the web whereas wikis are informational and often require verification social networking has looser constraints on what can be posted in addition users have greater capabilities to interact and connect with other social networking users in addition to social media posts users can more easily post artwork images audio video or other user generated media this information shared online for purchase or may be freely distributed this has led to greater distribution of content creator crediting though creators are at greater risk for their content being stolen by others though many may think of web 2 0 as allowing for individual contribution web 2 0 brought about great capabilities regarding crowdsourced crowdfunded and crowd tested content web 2 0 let individuals collectively share resources to meet a common goal whether that goal be knowledge based or financial there is no single universally accepted definition for web 2 0 or web 3 0 because of its expansive nature it s often hard to confine the boundaries of web 2 0 into a single simple definition web 2 0 applicationsthe components above are directly related to the applications of web 2 0 those components allowed for new types of software platforms or applications that are still used today | |
what does web 2 0 mean | web 2 0 describes how the initial version of the web has advanced into a more robust capable system after the initial breakthrough of the initial web capabilities greater technologies were developed to allow users to more freely interact and contribute to what resides on the web the ability for web users to be greater connected to other web users is at the core of web 2 0 | |
what are examples of web 2 0 applications | the most commonly cited examples of web 2 0 applications include facebook x instagram or tiktok these sites allow users to interact with web pages instead of simply viewing them these types of websites extend to sites like wikipedia where a broad range of users can help form the information that is shared and distributed on the web | |
is web 2 0 and web 3 0 the same | web 2 0 and web 3 0 use many of the same technologies ajax javascript html5 css3 web 3 0 is more likely to leverage even more modern technologies or principles in an attempt to connect the information to drive even greater value the bottom linein the early days of web browsing users would often navigate to simple web pages filled with information and limited to no ability to interact with the page today the web has advanced and allows for users to connect with others contribute information and have greater flexibility in how the web is being used though web 2 0 is already shaping the way for web 3 0 many of the fundamental pieces of web 2 0 are still used today | |
what is web syndication | web syndication is a marketing strategy for websites that grants a right or license to broadcast or distribute content from one site to another the most common example of web syndication is a content licensing arrangement between two or more internet companies in which one company provides content to be published and promoted on the other s website understanding web syndicationweb syndication is generally a free arrangement that s equally and mutually beneficial to both parties syndication increases the exposure of the website that provides the content and it may provide considerably more traffic for very little to no cost the practice can make the content syndicator s websites more attractive to users by providing more in depth information 1this relationship is especially common between niche low traffic content producing websites and larger websites that have large built in audiences but they may not have the capability to create specialized in depth content web syndication is the online version of content sharing that s been going on since the early days of print radio and television | |
when a show originally aired in the early days of television it was produced by and shown on just one network the original network licensed it out or syndicated it after the show s conclusion allowing another network to air it for a fee | the one element that guides all syndication is the ability to access a larger audience for whatever content is being syndicated web syndication and link buildingweb syndication is a key tool in link building the links embedded in a piece of syndicated content will drive traffic back to the originating website with search engine optimization seo the additional web traffic that syndication can provide can help the content providing website improve its search results and overall site ranking in an internet search 2web syndication may allow the company providing the content to earn additional page views and exposure to its content and its website the benefits for the site hosting the provided material are fresh content to appeal to consumers and additional traffic web syndication is also sometimes referred to as content syndication web syndication and paid traffica website might sometimes want to pay for syndication to get its material placed in a specific location on a high traffic site the bigger the distributor s site the greater the fee usually is such distributors include yahoo and google as well as social media platforms like facebook and x formerly twitter there are also content syndication networks that can help bloggers spread their content these are often seen at the bottom of web pages as related posts or similar articles from around the web and they include providers such as outbrain nativo zemanta and taboola it s usually noted on the platform when a content producing site pays for traffic it may be stated that the content is an ad or sponsored on social media and similarly on search page results the post or content might be at the top of the page and noted as a sponsored ad 3the cost of paying for traffic is significantly less than the traditional cost of advertising space on radio or television it costs just a few dollars to advertise content on facebook or instagram but this is different from true web syndication that relies on licensing agreements | |
what do sites gain from web syndication | the distributing site attracts more users because it s able to provide more content the content site also increases its traffic and exposure 2 | |
do sites have to pay for syndication | web syndication is often free but sometimes a fee is charged by high traffic sites the fee usually increases based on the size of the distributor s site because the content provider is paying for traffic paying for syndication can ensure premium placement on a high traffic site and the fee is often less than paying for advertising | |
are there any limits to the types of content that can be syndicated | it depends on the distributor product videos images and descriptions are typically accepted the distributor should tell you upfront what it will or will not accept but it may simply adjust your copy and images to meet its standards the bottom lineweb syndication is a content licensing agreement between internet companies one company provides content to be published and promoted on the other company s website sometimes in exchange for a fee the arrangement can provide benefits to both parties and the cost can be much less than standard advertising on radio or television or in print media | |
what is a wedge | a wedge is a price pattern marked by converging trend lines on a price chart the two trend lines are drawn to connect the respective highs and lows of a price series over the course of 10 to 50 periods the lines show that the highs and the lows are either rising or falling at differing rates giving the appearance of a wedge as the lines approach a convergence technical analysts consider wedge shaped trend lines useful indicators of a potential reversal in price action understanding a wedgea wedge pattern can signal either bullish or bearish price reversals in either case this pattern holds three common characteristics first the converging trend lines second a pattern of declining volume as the price progresses through the pattern third a breakout from one of the trend lines the two forms of the wedge pattern are a rising wedge which signals a bearish reversal and a falling wedge which signals a bullish reversal this usually occurs when a security s price has been rising over time but it can also occur in the midst of a downward trend as well the trend lines drawn above and below the price chart pattern can converge to help a trader or analyst anticipate a breakout reversal while price can be out of either trend line wedge patterns have a tendency to break in the opposite direction from the trend lines therefore rising wedge patterns indicate the more likely potential of falling prices after a breakout of the lower trend line traders can make bearish trades after the breakout by selling the security short or using derivatives such as futures or options depending on the security being charted these trades seek to profit from the potential for prices to fall | |
when the price breaks the upper trend line the security is expected to reverse and trend higher traders identifying bullish reversal signals would want to look for trades that benefit from the security s rise in price | benefits of wedge patternsas a general rule price pattern strategies for trading systems rarely yield returns that outperform buy and hold strategies over time but some patterns do appear to be useful in forecasting general price trends nonetheless because wedge patterns converge to a smaller price channel the distance between the price on entry of the trade and the price for a stop loss is relatively smaller than the start of the pattern this means that a stop loss can be placed close by at the time the trade begins and if the trade is successful the outcome can yield a greater return than the amount risked on the trade to begin with | |
is a wedge a continuation or a reversal pattern | a wedge pattern can be either a continuation or a reversal which one it is will depend on the breakout direction of the wedge for example a rising wedge that occurs after an uptrend typically results in a reversal a rising wedge that occurs in a downtrend will usually signify that the downtrend will continue hence being a continuation | |
is a falling wedge pattern bullish | a falling wedge pattern is seen as a bullish signal as it reflects that a sliding price is starting to lose momentum and that buyers are starting to move in to slow down the fall | |
is a rising wedge pattern bullish or bearish | usually a rising wedge pattern is bearish indicating that a stock that has been on the rise is on the verge of having a breakout reversal and therefore likely to slide the bottom linetraders using technical analysis rely on chart patterns to help make trading decisions particularly to help decide on entry and exit points there are many patterns that technical traders employ the wedge pattern being one of them this pattern employs two trend lines that connect the highs and lows of a price series indicating either a reversal or continuation of the trend | |
what is the weekend effect | the weekend effect is a phenomenon in financial markets in which stock returns on mondays are often significantly lower than those of the immediately preceding friday the weekend effect is sometimes known as the monday effect although that theory states that returns on the stock market on mondays will follow the prevailing trend from the previous friday if the market was up on friday it should continue through the weekend and come monday resume its rise and vice versa here s how the weekend effect works understanding the weekend effectone explanation for the weekend effect is the tendency of humans to act irrationally the trading behavior of individual investors appears to be at least one factor contributing to this pattern faced with uncertainty humans often make decisions that do not reflect their best judgment at times the capital markets reflect the irrationality of their participants especially when considering the high volatility of stock prices and the markets the decisions of investors may be impacted by external factors and sometimes unconsciously in addition investors are more active sellers of stock on mondays especially following bad news in the market in 1973 frank cross first reported the anomaly of negative monday returns in an article called the behavior of stock prices on fridays and mondays which was published in the financial analysts journal 1 in the article he shows that the average return on fridays exceeded the average return on mondays and there is a difference in the patterns of price changes between those days stock prices fall on mondays following a rise on the previous trading day usually friday this timing translates to a recurrent low or negative average return from friday to monday in the stock market some theories that attempt to explain the weekend effect point to the tendency of companies to release bad news on a friday after the markets close which then depresses stock prices on monday others state that the weekend effect might be linked to short selling which would affect stocks with high short interest positions alternatively the effect could simply be a result of traders fading optimism between friday and monday the weekend effect has been a regular feature of stock trading patterns for many years according to a study by the federal reserve prior to 1987 there was a statistically significant negative return over the weekends however the study did mention that this negative return had disappeared in the period between 1987 and 1998 since 1998 volatility over the weekends has increased again and the cause of the phenomenon of the weekend effect remains a much debated topic special considerationsopposing research on the reverse weekend effect has been conducted by a number of analysts who show that monday returns are actually higher than returns on other days 2 some research shows the existence of multiple weekend effects depending on firm size in which small companies have smaller returns on mondays and large companies have higher returns on mondays the reverse weekend effect has also been postulated to occur only in stock markets in the u s | |
what is a weekly chart | a weekly chart is the data series of price actions for a traded security on a weekly chart each candle bar or point on a line represents the price summary for a single week of trading candlestick charts and bar charts are the most common types of charts used by traders and investors a weekly chart set to display in a weekly time frame will show high low open and close for the entire week but will not show the day by day trading movements within that week weekly charts can be compared with daily charts understanding weekly chartsweekly charts are used by technical analysts to gauge the long term trend of a given asset a weekly chart can vary in appearance depending on what form of chart the analyst chooses to use for example a weekly line chart may only include the weekly closing price while a weekly candlestick chart will display the open high low and close for the week this chart construction is used to give a long term view of the security because it includes much more historical price movement than an equivalent period day chart oftentimes weekly charts can be added to a trader s display and used in comparison to daily charts and volume charts weekly charts comprise a summary of data from all days of the week the highest and lowest prices in those five trading sessions regardless of the day they traded that week become the high and low for the weekly marker the figure above shows how each individual day data for the week becomes summarized into a single candle the weekly candle at the end doesn t look like any of the individual daily candles and it merely nets out the trading action into a single small body with a large trading range but for the purposes of those who review a weekly chart that is all the information they need advantages of weekly chartsweekly charts can help traders to view security price trends from a broader perspective than the day to day or hour by hour price action seen in daily or intraday charts since a weekly chart can show a year s worth of trading in only 52 candles or bars the trends or patterns they form imply that any forecast that comes from them will likely last a month or several months institutional analysts are looking for longer term opportunities than short term traders are and weekly charts are more likely to be relevant to what they want to know weekly charts can be used in conjunction with daily charts to confirm price trends and buy sell signals similar to daily charts weekly charts can be used to identify price channels with bullish and bearish trends since they provide a visual display of prices over a longer time some indicators may be different than daily price charts or may help to confirm daily price chart pattern inferences weekly charts may also be used by less active investors to follow and identify long term price trends in the securities they follow many investors will view weekly charts on the securities they are invested in to watch for changes in long term trends or signals that the investment may be potentially beginning a downtrend special considerationsall types of investors may also choose to follow monthly charts monthly charts will show an even broader view of a security because prices are charted monthly in all instances it can also be helpful to overlay a price chart with a moving average of the prices moving average studies are followed closely by technical traders regardless of the time frame they trade the moving average and moving average envelope channels can also be useful for longer term investors who wish to follow their investment s price in a weekly or monthly chart | |
what is a weekly chart | a weekly chart is the data series of price actions for a traded security on a weekly chart each candle bar or point on a line represents the price summary for a single week of trading candlestick charts and bar charts are the most common types of charts used by traders and investors a weekly chart set to display in a weekly time frame will show high low open and close for the entire week but will not show the day by day trading movements within that week weekly charts can be compared with daily charts understanding weekly chartsweekly charts are used by technical analysts to gauge the long term trend of a given asset a weekly chart can vary in appearance depending on what form of chart the analyst chooses to use for example a weekly line chart may only include the weekly closing price while a weekly candlestick chart will display the open high low and close for the week this chart construction is used to give a long term view of the security because it includes much more historical price movement than an equivalent period day chart oftentimes weekly charts can be added to a trader s display and used in comparison to daily charts and volume charts weekly charts comprise a summary of data from all days of the week the highest and lowest prices in those five trading sessions regardless of the day they traded that week become the high and low for the weekly marker the figure above shows how each individual day data for the week becomes summarized into a single candle the weekly candle at the end doesn t look like any of the individual daily candles and it merely nets out the trading action into a single small body with a large trading range but for the purposes of those who review a weekly chart that is all the information they need advantages of weekly chartsweekly charts can help traders to view security price trends from a broader perspective than the day to day or hour by hour price action seen in daily or intraday charts since a weekly chart can show a year s worth of trading in only 52 candles or bars the trends or patterns they form imply that any forecast that comes from them will likely last a month or several months institutional analysts are looking for longer term opportunities than short term traders are and weekly charts are more likely to be relevant to what they want to know weekly charts can be used in conjunction with daily charts to confirm price trends and buy sell signals similar to daily charts weekly charts can be used to identify price channels with bullish and bearish trends since they provide a visual display of prices over a longer time some indicators may be different than daily price charts or may help to confirm daily price chart pattern inferences weekly charts may also be used by less active investors to follow and identify long term price trends in the securities they follow many investors will view weekly charts on the securities they are invested in to watch for changes in long term trends or signals that the investment may be potentially beginning a downtrend special considerationsall types of investors may also choose to follow monthly charts monthly charts will show an even broader view of a security because prices are charted monthly in all instances it can also be helpful to overlay a price chart with a moving average of the prices moving average studies are followed closely by technical traders regardless of the time frame they trade the moving average and moving average envelope channels can also be useful for longer term investors who wish to follow their investment s price in a weekly or monthly chart | |
what is weekly premium insurance | weekly premium insurance is a type of financial protection where the payments that the insured makes in return for coverage are paid weekly this type of insurance was introduced by prudential in 1875 and was common in the late 1800s and early 1900s 1 at that time insurers were unable to get insurance with monthly premium payments to catch on with consumers the small weekly premium payments were designed to match up with workers pay schedules and modest incomes weekly premium insurance is also known as industrial life insurance | |
how weekly premium insurance works | weekly premiums were a feature of industrial insurance a type of life insurance product offered to workers employed in industrial jobs such as manufacturing insurance companies collected the premium payments by sending agents to people s homes in the mid 1900s the number of weekly premium insurance policies began to decline because rising incomes made larger and less frequent premium payments more affordable for many families insuring americain the early days insurance was often sold not bought and that suited insurance companies fine behind this thinking is the notion of adverse selection it s the idea that people who seek out insurance are more likely to need or use it and therefore are prone to higher risks so that s one reason why insurers sent out armies of salesmen to convince people that insurance was a good idea the weekly policies of yesteryear were mainly whole life insurance weekly premiums meant the insurers collected money faster thus lowering the cost of the policies workers were sold on the idea of paying a few dollars a week for say 2 000 worth of coverage if they died or double that if they died in an accident known as double indemnity the insurance man would show up on payday of course either at the policy holder s home or business to collect the premium building cash value was a top selling point of these policies and still is today at the end of 20 or 30 years worth of payments the policy had built a cash value often equal to the premiums paid in or the policy s face value people could borrow money against the policies as well disability policies were also sold this way long before social security provided disability coverage starting in 1956 2 before then there was little for the average worker to fall back on after an injury on the job made it impossible to continue working for people today it s hard to imagine a society where workers received nothing from their employer beyond a paycheck and no government safety nets or retirement benefits | |
what is a wei | wei is the smallest unit of ether the cryptocurrency coin used on the ethereum network one ether 1 000 000 000 000 000 000 wei 1018 the other way to look at it is one wei is one quintillionth of an ether | |
how a wei works | a u s dollar is only divisible into 100 parts and a penny is the atomic unit of u s currency digital currencies can also be divided but they generally use much much smaller units than fiat currencies the smallest unit of the native token for the ethereum blockchain ether is called the wei after wei dai dai is a computer engineer and cryptography enthusiast who is known for supporting the widespread use of strong cryptography and privacy oriented technologies ether has many names for different units of wei the names of these sub units indicate the quantity of the units for example a kwei is a kilo meaning a thousand wei but they have informal names as well for example the kwei is also known as a babbage and a gwei is commonly referred to as a shannon the wei s exemplarwei dai has been called an intensely private person and with his skills in cryptography he s able to make sure the public record of him is very small the accepted story in the cryptocurrency community is that he graduated from the university of washington with a degree in computer science and that he worked at microsoft in its cryptography research group mr dai worked in the cryptography research group at microsoft corporation in redmond washington while at microsoft he was involved in the study design and implementation of cryptosystems for specialized applications prior to joining microsoft mr dai was a programmer with terrasciences of acton massachusetts 1wei is an original member of the cypherpunk movement in the 1990s whose members eventually developed the theoretical basis for cryptocurrency in the 2010s in his proto crypto manifesto for a cryptocurrency called b money wei laid the foundation for smart contracts that would self execute and not need intervention by a human third party for enforcement for this innovation he is honored by having the name of the atomic unit of ether named after him | |
how much is 1 wei of ether | one wei is 10 18 ether and 1 eth had a market value of 3 456 14 on june 27 24 one wei would have equaled 0 000000000000003456 |
Subsets and Splits