Real estate agents are expensive, which makes many people ask if me if selling your house yourself a good idea. When you sell without an agent, it is commonly called FSBO or for sale by owner. On the surface, selling your house as a FSBO may save thousands of dollars. However, there is a lot … Read more
The Utah real estate market trends continue to see highs and lows. Hereâs your monthly update on whatâs happening. Data from Utah MLS from February […] Read More
The post Homieâs Utah Housing Market Update February 2021 appeared first on Homie Blog.
I typically refer to the 30-year fixed mortgage as a set-it-and-forget-it type of mortgage because itâs fixed for the entire duration of the loan. The mortgage rate in month one is the same as the rate in month 360. The mortgage payment never changes, though the total housing payment could vary thanks to things like… Read More »Is the 30-Year Fixed Mortgage Actually a Lot of Work?
The post Is the 30-Year Fixed Mortgage Actually a Lot of Work? appeared first on The Truth About Mortgage.
Well, itâs a new year, and with that comes new and exciting home loan programs to help borrowers purchase homes or refinance existing mortgages. The newest one comes courtesy of Guaranteed Rate, which launched its âGR Flex Powerâ mortgage that requires as little as 10% down on loan amounts as high as $3 million. Additionally,… Read More »Guaranteed Rate Launches New Jumbo Loan with Interest-Only Option
The post Guaranteed Rate Launches New Jumbo Loan with Interest-Only Option appeared first on The Truth About Mortgage.
When youâre talking about moneyness in options, certain phrases capture where the strike price is in relation to the current price of the underlying asset. Options are either in-the-money (ITM), out-of-the-money (OTM), at-the-money (ATM), or near-the-money. You can also have options that are deep-in-the-money or far-out-of-the-money. Generally, a call option is in-the-money when the strike […]
The post Guide to Moneyness in Options appeared first on SoFi.
Having a budget doesnât mean you canât have fun. Check out our article for inspiring ways to live in luxury while keeping your money safe.Having a budget doesnât mean you canât have fun. Check out our article for inspiring ways to live in luxury while keeping your money safe.
The post 8 ways to live on a budget and still feel rich appeared first on Money Under 30.
Costco’s CFO hints that a price hike could be on the way.
Hold onto your hats, folks. It’s rant time!
Based on what I’m hearing on Facebook, Twitter, and in real life, it’s time for a refresher course on the difference between investing and speculation. Although these two concepts share some commonalities, they’re very different things.
Let me start by telling a story, one I’ve told many times before. It’s the story of the worst “investor” I’ve ever known: me.
Before my financial turnaround, I didn’t really understand what the stock market was for. I viewed it as a sort of casino, I guess. I believed investors gambled on individual stocks and hoped that they’d outperform the rest of the market.
So, that’s what I did. I treated the stock market as if it were a casino. I’d pick a stock, put all my money into it, and cross my fingers. I took risky gambles hoping to strike it rich.
Unsurprisingly, I lost a ton of money.
I wasn’t investing; I was speculating. I was gambling. I was trying to pick winning cards at the casino. But that’s how I thought the stock market worked.
After writing at Get Rich Slowly for a while, my viewpoint changed. As I became better educated, I realized that the stock market is not a casino. It’s a marketplace. It’s a tool that allows people to buy shares of businesses. (This is obvious, but trust me: Most people don’t understand this.)
When I buy a piece of one business, I’m taking on the risk associated with that business. We hear all the time that most small businesses don’t survive seven years, right? Well, even big businesses go under. Even big businesses lose money. There’s always risk associated with owning a business.
In the world of investing, “risk” is the probability that you’ll lose money. (There are many types of investment risks, by the way.) The notion of “return” is fundamentally tied to the concept of “risk”. The greater the risk — the greater the chance you’ll lose money — the higher your potential returns (gains) are.
One difference between investment and speculation is the amount of risk involved. When you put your money into something with minimal risk, you’re investing. When you put your money into something with high risk, you’re speculating. Like I said at the start, there are plenty of commonalities in the two actions — but the element of risk is a huge differentiating factor.
One way to mitigate risk is to own pieces of several businesses. Owning many businesses is even better. This practice is known as diversification. Diversification reduces risk. It allows you to enjoy the profits and benefits without getting screwed when one business goes under. This is investing. Putting all of your money into one stock and hoping that it increases in value is speculation.
The Fed generally wants annual inflation to be around 2% at the core level. “Core” is fancy market jargon for an economic metric that excludes some of its more volatile components. In the case of inflation data, “core” excludes food and energy prices. Today’s Consumer Price Index (CPI) came in a monthly core level of 0.4%. Granted, neither the Fed nor the financial market expects 0.4% to persist month in and month out, but some basic math tells us that a year’s worth of such inflation would result in a core reading of 4.8%. The Fed expects inflation to fall more in line with 3.5% by the end of this year before getting back into the 2% range next year. That’s the point at which they see themselves going easier on rates. But until that victory is much more clearly in sight, they will continue to raise overnight lending rates periodically and those rate hikes will continue exerting some upward pressure on longer-term rates like mortgages. If there’s a silver lining to Fed’s game plan it’s that financial markets can adjust mortgage rates immediately based on future expectations. In other words, all of the future rate hikes foreseen by traders were already priced in to yesterday’s mortgage rates. The problem is that markets now see more rate hikes after today’s CPI data. Or more specifically, they see the Fed holding on to the ceiling rate for longer than they did yesterday. All told, between the jobs report 2 weeks ago and today’s CPI, the market now sees the Fed keeping the Fed Funds Rate slightly over 5% through December 2023. Before these two pieces of data, December’s Fed meeting was expected to result in a rate closer to 4.5%.
Homebuyers facing affordability challenges are turning to ARMs to reduce their monthly payments as mortgage rates have more than doubled.