October 28, 2016
negative interest rates stock crashes

A Guide to Negative Interest Rates

Over the years, we’ve seen low-interest rates and we’ve even seen ‘ultra-low’ interest rates. However, now we see negative interest rates but what does that mean? And how does it affect the economy? Is it a good thing or a bad thing? Real v Nominal Interest Rate Before we head any further, we should point out that real interest rates are adjusted for inflation whereas nominal rates are not. Is the Real Rate Important? As the real rate adjusts for inflation, this can turn a nominal yield from positive to negative. Let’s say that the bank sets a 1% nominal rate with inflation at 2%; the real rate would be -1%. When you put $1,000 into a bank, it will grow by $10 after one year, but it would be worth less than $1,000 when it comes to buying power. Therefore, purchasing power is lost when a negative rate is seen. Rates and Bond Yields When we assess the cost of borrowing over a period of one day to 30 years, we find the yield curve. Because of the yield curve, nearly every other borrowing rate in the economy is affected by short-term rates. Negative Sovereign Bond Yields Overall, it is […]
October 25, 2016

Five Pitfalls to Avoid When Exploring How to Sell Your Business

With the volatility in today’s small-business marketplace, many оwnеrѕ may look at how to sell your business. Business owners hope the transition is a smooth and profitable process. Under an ideal circumstance, selling a business is not an easy task. Lack of sale preparation,  deficient or misaligned expectations can and often do conflict with market realities. No matter the industry and sector, the key to achieving your desired outcome is an efficient pre-sale planning. The most successful sellers are extremely careful. They ensure they get the pre-sale preparation right. Here are the common mistakes and how you can avoid them. Starting the Business Sale Process With Misguided Expectations One of the biggest mistakes business sellers make most, especially first-timers, is unrealistic expectations. Many owners tend to overvalue their companies, trying to sell them for more than асtuаl mаrkеt vаluе. Which then leads to disappointment when someone underprices their business. Tempering your expectations is important. You can do that by carrying out a thorough evaluation of recent sales for similar companies in your area.  If you do this technique during the preparation, you’ll gain a more practical insight when it comes to the average sale price for your business. It will also give you a good […]
October 25, 2016

A Quiet Week Ends With Indexes Up

A quiet week ends with indexes up, but right now, the general market sentiment seems unsure about where it stands and where to go from here. Why did the markets have a sluggish week? Experts last week described the markets as lazy and docile, and we have to agree. If these five days of trading are a movie, it would probably put a lot of people to sleep. On paper, last week seemed to provide plenty of opportunities for market excitement – from major companies’ earnings releases to the European Central Bank’s latest policy announcement. In reality, however, much of what we saw and heard led to little change and few strong reactions. But why? We’d point to a few key occurrences: Earnings reports were mostly good, but few were outstanding. The European Central Bank held interest rates where they are. The presidential election continues to hold the markets in limbo. While last week’s markets seemed more sluggish than normal, a little break from the excitement can be nice sometimes, especially when coupled with increases in all major U.S. indexes. Looking Ahead This week not only moves us ever closer to Election Day, but it also brings more earnings reports and ends […]
October 25, 2016
Early Withdrawal from a retirement account

Are You Subject to the Alternative Minimum Tax?

If you’re unfamiliar with the Alternative Minimum Tax, or the AMT, it may not affect you. The AMT forces many wealthy taxpayers who qualify for certain exemptions to pay a greater share of taxes. Though the AMT permanently indexed to inflation in 2013, many Americans are still subject to the tax. Here are a few things that may need to know. AMT Rules You may be subject to the AMT if your modified adjusted gross income (MAGI) is above the AMT exemption amount for your filing status. The 2016 AMT exemption amounts for each filing status are: Single and Head of Household = $53,900 Married Filing Joint = $83,800 Married Filing Separate = $41,900 Head of Household = $53,900 The rules for calculating the AMT are more complex than those for regular income tax, so it’s a good idea to work with a qualified tax professional or uses the IRS e-file software. If you want to file a paper tax return, the AMT Assistant tool on IRS.gov can also help. If you find that you owe AMT, you usually must file Form 6251. For more information about the AMT, see Form 6251 instructions on IRS.gov or speak with a tax specialist […]