Depreciation Recapture

Term of the Day


The gain received from the sale of depreciable capital property that must be reported as income. Depreciation recapture is assessed when the tax basis of an asset exceeds the sale price. The difference between these figures is thus "recaptured" by being reported as income.

Depreciation recapture is reported on Form 47

Bear Market

What Does it Mean?
A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market, selling continues, which then creates further pessimism. Although figures can vary, for many a downturn of 20% or more in multiple broad market indexes, such as the Dow Jones Industrial Average (DJIA) or Standard & Poor's 500 Index (S&P 500), over at least a two-month period, is considered an entry into a bear market.
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Investopedia Says...
Not to be confused with a correction, which is a short-term trend that has a duration shorter than two months. While corrections are often a great place for a value investor to find an entry point, bear markets rarely provide great entry points as timing the bottom is very difficult to do.

Weighted Average Loan Age - WALA

What Does it Mean?
A dollar-weighted average measuring the age of the individual loans in a mortgage pass-through or pooled security, such as Ginnie Mae or a Freddie Mac security. The WALA is measured as the time in months since the origination of the loans, with the weighting based on each loan's size in proportion to the aggregate total of the pool.
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Investopedia Says...
The weighted average age will change over time as some mortgages get paid off faster than others. Based on the issuer of the mortgage-backed securities (MBS), the WALA may be weighted on the remaining principal balance dollar figure.

7 Hedge Fund Manager Startup Tips

7 Hedge Fund Manager Startup Tips
Hedge funds can be mentioned over 1,000 times a day in blogs, newspapers, magazines and on radio stations. As of September 2008, there were over 15,000 hedge funds in existence, with even more people interested in starting a hedge fund of their own. In this article, we'll explore the reasons why these funds are so popular and what you should take into consideration before starting up your own hedge fund.

Financial Education
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Keeping Up With Your Continuing Education
As the day drew to a close, Bob stared at the mound of paperwork on his desk and sighed. He had several client transactions to complete, and he still had a portfolio to design. Then, a memo appeared in his company email reminding him that the deadline for completing his continuing education requirements was pending in 30 days.

Insurance

What Does it Mean?
A contract (policy) in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured.
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Investopedia Says...
When shopping around for an insurance policy, look for the best priced package that is right for you - prices can vary from one

Consumables

Consumables
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Goods used by individuals and businesses that must be replaced
regularly because they wear out or are used up. Consumables
can also be defined as the components of an end product that
are used up or permanently altered in the process of
manufacturing, such as semiconductor wafers and basic chemicals.


Investopedia Says:
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Stocks of companies that make consumables are considered to
be relative safe harbors for equity investors when the economy
shows signs of weakness. The reasoning is simple: people will
always need to purchase groceries, clothes and gas no matter
what is going on in the broad economy.

Many of the items measured in the basket of goods used to
calculate the Consumer Price Index (CPI) are consumables;
inflation in these items is closely watched because it can
lower the discretionary income people have to spend on items
such as cars, vacations and entertainment.

Baby Boomer

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A person who was born between 1946 and 1964. The baby boomer
generation makes up a substantial portion of the North American
population. Representing nearly 20% of the American public,
baby boomers have a significant impact on the economy. As a
result, baby boomers are often the focus of marketing campaigns
and business plans.


Investopedia Says:
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After the end of World War II, birth rates across the world
spiked. The explosion of new infants became known as the baby
boom. During the boom, an estimated 77 million babies were born
in the United States alone! The large increase in population
produced a substantial rise in demand for consumer goods,
stimulating the post-war economy.

Peak Oil

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A hypothetical date referring to the world's peak crude oil
production, whereby following this day, production rates will
begin to diminish. This concept is derived from geophysicist
Marion King Hubbert's "peak theory", which proclaims that oil
production follows a bell-shaped curve.


Investopedia Says:
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Because oil is a non-replenishing resource, there is a
limit to how much the world can extract and refine. Peak
oil is the day that oil production reaches a maximum and
will subsequently begin to decline until full depletion is
ultimately reached.

Staycation

What Does it Mean?

A vacation spent at or near your own home, rather than traveling to another location. People take staycations for many reasons, including but not limited to, saving money, avoiding travel, and taking advantage of and enjoying what is available in their own city.

Patronage Dividend

A dividend or distribution that a co-operative pays to its members or investors. Patronage dividends are given based on a proportion of profit made by the business. Once this amount is figured out the dividend is calculated according to how much each member has used the co-op's services. Tax rules view these profits essentially as an overcharge, which can be returned to patrons and deducted from the co-op's taxable income.