What’s the real return on your investments?

What's the real return on your investments?As an investor, you probably pay attention to nominal return, which is the percentage increase or decrease in the value of an investment over a given period of time, usually expressed as an annual return. However, to estimate actual income or growth potential in order to target financial goals — for example, a certain level of retirement income — it’s important to consider the effects of taxes and inflation. The remaining increase or decrease is your real return.

Let’s say you want to purchase a bank-issued certificate of deposit (CD) because you like the lower risk and fixed interest rate that a CD can offer. Rates on CDs have risen, and you might find a two- or three-year CD that offers as much as 3% interest. That could be appealing, but if you’re taxed at the 22% federal income tax rate, roughly 0.66% will be gobbled up by federal income tax on the interest. Continue reading

Time for a Mid-Year Investment Check

Time for a Mid-Year Investment CheckMany investors may be inclined to review their portfolios only when markets hit a rough patch, but careful planning is essential in all economic climates. So whether the markets are up or down, periodically reviewing your portfolio with your financial professional can be an excellent way to keep your investments on track, and midway through the year is a good time for a checkup. Here are three questions to consider.

1. How have my investments performed so far this year?

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Mergers & Acquisitions: What’s in the Deal for Investors?

Mergers & Acquisitions: What's in the Deal for Investors? Merger and acquisition (M&A) activity in North America and Europe reached its second highest level on record in 2018. There were 19,501 deals worth $3.6 trillion — a 6.3% increase in deal volume over 2017. There was also a rise in mega deals exceeding $10 billion.1
Collectively, U.S. corporations had plenty of cash to spend after a long string of solid profits and a significant tax cut.2 High stock prices also provided plenty of equity for deals involving the exchange of stock, while relatively-low borrowing costs made it possible to finance acquisitions. Continue reading

Test Your Investing IQ

Test Your Investing IQ

How much do you know about market basics? Put your investing IQ to the test with this quiz on stocks, bonds, and mutual funds.




1. What does it mean to buy stock in a company?

   a. The investor loans money to the company

   b. The investor becomes a part owner of the company

   c. The investor is liable for the company’s debts


2. Which of the following statements about stock indexes is correct?

   a. A stock index is an indicator of stock price movements

   b. There are many different types of stock indexes

   c. They can be used as benchmarks to compare the performance of an individual investment to a group of its peers

   d. All of the above


3. What is a bond?

   a. An equity security

   b. A nonnegotiable note

   c. A debt investment in which an investor loans money to an entity


4. What kind of bond pays no periodic interest?

   a. Zero-coupon

   b. Floating-rate

   c. Tax-exempt


5. What is a mutual fund?

   a. A portfolio of securities assembled by an investment company

   b. An investment technique of buying a fixed dollar amount of a particular investment regularly

   c. A legal document that provides details about an investment


6. What is the difference between mutual fund share classes?

   a. The investment advisers responsible for managing each class

   b. The investments each class makes

   c. The fees and expenses charged by each fund class


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