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Are Trusts the Best Way to Leave Money to Your Heirs?

First, this is a general comment. Every person’s situation is different. I could say “95% of people don’t need this,” and you could be in the 5% who do. So, don’t ever make personal investment or estate planning decisions based on an online post, contact an actual investment advisor or attorney - most will have initial conversations for free (I do).

Fear of Options Assignment

One of the most common fears in option trading is one of early assignment.  The fear of having a large number of shares (or a large short position) coupled with a potential margin call (or Reg-T call) causing a sudden shortage of cash in their accounts worries investors.  Investors commonly view assignment as a huge potential risk.

The Value of Equity Asset Class Diversification

This investing lesson is a tale of two time periods that highlight the important role of equity asset class diversification and systematic rebalancing in an equity fund portfolio.  Human nature is a failed investor, when our natural instinct is often to do the exact opposite of what we should do in practice.

Lessons from Bill Ackman's comeback

Bill Ackman is an American investor, hedge fund manager and philanthropist. He is the founder and CEO of Pershing Square Capital Management, a hedge fund management company. Ackman is considered by some to be a contrarian investor but considers himself an activist investor.

Exercise Risk of Uncovered Calls

Exactly how risky are uncovered calls? That depends … Some traders avoid uncovered calls altogether because the risk can be significant, even unlimited (in theory). Others can rationalize this strategy as only moderately risky based on how you pick expiration and strike.

Cash is (no longer) Trash

According to www.bankrate.com, the current national average interest rate on bank savings accounts is only 0.10%. Many banks have barely budgeted on increasing interest rates even as the risk-free rate of return on a US Treasury Bill is currently in excess of 2%. This spread is a substantial profit margin for banks.

The Danger of False Signals

Everyone has heard about the troubling “false signals,” a price-based reversal indicator that shows up but does not lead to reversal. This is frustrating and expensive, but the problems in how traders react to false signals can be managed effectively with a few techniques.

How Earnings Impact Options Prices

Yesterday I closed our SE May 22.5 buy-write for a couple of reasons. First off, I knew that the position only had ~$0.20 more to gain over the next three weeks. I also knew those gains would take some time to capture as out-of-the-money puts (which is essentially what the May 22.5 buy-write is) hold their value until right before expiration.

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