Credit Card Debt Reduction

When you hear a credit card balance reduction ad, two facts will probably never be mentioned, and will mislead you about that credit reduction purpose.

One; you pay income tax on any amount of debt you reduce. Therefore, cutting that balance is not as simple as it may appear. Reduce your balance by $4,000 and it’s as if you had a taxable gain.

Two; you hurt your credit standing by resorting to credit reduction. This may eventually cost you.

And, how many who have so much credit card debt, they have to resort to drastic measures, are actually permanently getting out of debt? You can be sure their spending habits will be getting them into the same situation again in a few years.

12b-1 Mutual Fund Marketing Fees

The 12b-1 mutual fund fees are sill around. These were originally permitted by the SEC to allow mutual funds to market their product to new investors, so are actually a sales load that adds up over the years. Fortunately, most funds no longer use them.

The 12b-1 charges originally were used to pay fees for the distribution of funds by brokers. But they still persist, even when brokers are not involved.

My suggestion: Avoid any mutual funds that charge them. Those fees become significant deductions from your accumulated holding values over the years.

High Frequency Trading

Among costs, added to the "expense ratios" of mutual fund investors, is the bid-ask spread. A wide spread means the fund must pay significantly more to acquire a stock than it could sell it for.

High- frequency trading has reduced this cost by narrowing the spread. Generally, wide spreads are seen as inefficiency, with buyers and sellers having difficulty agreeing on a price that accurately reflects what is known about a stock. Narrow spreads mean the market is working better.

Another transaction cost arises from the fact that a fund's huge trades can drive prices up or down by tipping the balance of supply and demand. High-frequency trading has helped reduce this "market-impact" cost by making it easier to break big trades into many little ones while still conducting them very quickly,

Trading costs from spreads and market impact have been cut in half over the past decade, From 0.5% of the trade amount for big company stocks to 0.25%. For small stocks, trading costs have dropped from 1% to 0.5%.

Therefore, high-frequency trading isn’t always the villain the financial media purports it to be.

Credit Card Balance Transfers

When you make too many credit card transfers it appears you may be applying for fresh credit each time. That hurts your credit card score.

Therefore, when you get offers from credit card companies to transfer your current outstanding balance to another card account because of lower charges, think it over carefully.

You may be hurting your credit score, should you take the bait.

Overseas Investing as Currency Transaction

Investing overseas is not only for investment diversification; the benefits of growth opportunities are to be gained globally.

Currency moves are always involved. Will the dollar be getting stronger or weaker? If the dollar gets weaker, such investments become more valuable as translated currency will then work in favor of the U.S. investor.

However, should the dollar get stronger, the reverse will become true. The investments become less valuable, when translated into dollars.

Maxing Out a Credit Card

It may sometimes be necessary to take down the maximum amount of credit your card permits, but it does not help your credit score.

Do so only in an emergency. It’s nice to know that your credit permits you spending liberties, but don’t let that take you to extreme spending binges.

Of course, if you don’t use your card at all, or only occasionally, you may be dropped or the maximum available credit line may be reduced. Credit card companies are getting more sensitive these days about account activity. So, use credit cards intelligently.

More Securities and Exchange Commission Futility

Securities and Exchange Commission has now ruled, if your company’s common stock is worth more than $75 million dollars, shareholders are allowed to vote once every three years on whether they like or dislike top management pay scales. But the company does not have to act on the voting results.

With all the problems the SEC has to face today, this has to be what they deem a big, worthwhile endeavor, worth their regulatory efforts.

Question: how many stockholders care? Few.

And is this a valid buy and sell strategy for investors to follow? No.