The process of realigning the weightings of one's portfolio of assets. Rebalancing involves periodically buying or selling assets in your portfolio to maintain your original desired level of asset allocation. For example, say your original target asset allocation was 50% stocks and 50% bonds. If your stocks performed well during the period, it could have increased the stock weighting of your portfolio to 70%. You may then decide to sell some of your stocks and buy bonds to get it back to your original target allocation of 50/50.
The economic impact felt by local businesses when a large firm such as Wal-Mart opens a location in the area. The Wal-Mart effect usually manifests itself by forcing smaller retail firms out of business and reducing wages for competitors' employees. Many local businesses oppose the introduction of Wal-Marts into their territories for this reason. The Wal-Mart effect is not all bad; it can also curb inflation and help to keep employee productivity at an optimum level. The chain of stores can save consumers billions of dollars, but may also reduce wages and competition in an area.
When a property is owned by two or more tenants. If one owner dies, the other does not automatically take the entire estate. |||When the person dies, the property portion is transferred to the descendant's beneficiary.
A trust created for the purpose of supporting the non-qualified benefit obligations of employers to their employees. These trusts are sometimes referred to as "grantor trusts". Called a Rabbi trust due to the first initial ruling made by the IRS on behalf of a synagogue, these forms of trusts create security for employees because the assets within the trust are typically outside the control of the employers and are irrevocable.
An economic term for the division of a tax burden between buyers and sellers. Tax incidence is related to the price elasticity of supply and demand. When supply is more elastic than demand, the tax burden falls on the buyers. If demand is more elastic than supply, producers will bear the cost of the tax. Tax incidence reveals which group, the consumers or producers, will pay the price of a new tax. For example, the demand for cigarettes is fairly inelastic, which means that despite changes in price, the demand for cigarettes will remain relatively constant. Let's imagine the government decided to impose an increased tax on cigarettes. In this case, the producers may increase the sale price by the full amount of the tax. If consumers still purchased cigarettes in the same amount after the increase in price, it would be said that the tax incidence fell entirely on the buyers.
A fund that buys securities in distressed investments, such as high-yield bonds in or near default, or equities that are in or near bankruptcy. Even highly leveraged firms may be targeted if there is a chance that the owners will not be able to make all required debt payments. As the name implies, these funds are like circling vultures patiently waiting to pick over the remains of a rapidly weakening company. The goal is high returns at bargain prices. Some people have looked down upon hedge funds that operate like vulture funds, which have preyed on the cheap debt of struggling companies and forced these companies to pay it back, plus interest.
A highly subjective measure of happiness that is an important component of many financial decisions. Factors that play a role in quality of life vary according to personal preferences, but they often include financial security, job satisfaction, family life, health and safety. Financial decisions usually involve a tradeoff where quality of life is decreased in order to save money or, conversely, quality of life is increased by spending more money. Commuting to work provides a good example. It is possible to save money on housing by living further away from popular job centers and commuting to work. However, commuters don’t have as much time to spend with family or on hobbies because of the extra time spent sitting in traffic. Some people consider this tradeoff worthwhile, while others choose to maximize their quality of life by spending more money to live closer to work. Quality of life is also an issue when developing a personal savings plan. In this case, the tradeoff involves a sacrifice of current quality of life in order to improve future quality of life.
1. The rate at which a business or person is taxed on income. 2. The rate of tax on good and services. 1. For example, consider an individual with an income tax rate of 30%. For every $100,000 that individual makes, $30,000 ($100,000 x 0.30) must be paid as tax. There are three main types of tax rates: progressive, proportional and regressive. 2. For example, (as of 2005) in New York State the state tax rate is 4.25%. If you buy a $1,000 television from a store, the total purchase price will be $1,042.50, with $42.50 in tax paid to the state of New York.
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