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Posts published in “Finance”

McDonald’s May be Your Best Investment

We’ve all been to McDonald’s (some of us more than others). There’s something nostalgic about taking a bite of a Big Mac or a chicken nugget or the French fries. We all love it and some of us regret eating it the next morning (again, some of us more than others). But have you ever thought about what a great investment McDonald’s might be?

And I’m not talking about the stock. While yes, McDonald’s stock has been slightly up during the past half year in a down market, it is not the only thing that is proving to be a valuable asset to someone’s portfolio. In…

Tips to Prepare for Tax Season 2022

Believe it or not, tax season is officially here. While it is completely understandable to avoid thinking about taxes until you absolutely have to, taking a few preemptive steps can keep you organized and help reduce stress. Whether you file your taxes using tax software yourself or work with a tax professional, check out the tips below to confidently tackle your taxes this year. 

Step #1: Gather all of your forms & documents 

Prevent last-minute scrambling by organizing all your tax documents. Here’s a summary of the tax documents and the information you’ll need:

  • W-2s (from your workplace)
  • SSA-1099 (summary of Social Security benefits)
  • 1099s  (if you have additional income, interest, gains/ losses) 
  • 1099-Rs (if you receive income from pensions, annuities, and retirement accounts) 
  • 1095-A (if you have government marketplace health coverage) 
  • 1098s (students receive a summary that reports interest and tuition payments) 
  • W-2Gs ( if you have gambling winnings, yes, you also need to report this) 
  • Schedule K-1s ( used for partnership income, trust income, and company ownership) 
  • Letter 6419 – ( if you have children, this reports Advance Child Tax Credit Payments) 
  • Letter 6475 – (if you received any federal stimulus payments, this reports the Economic Impact (stimulus) Payment) 

Step #2:  Schedule out a date to file 

Remember the deadline to submit your taxes is April 18, 2022.

The Federal Reserve’s Role in Controlling Costs

Inflation in the U.S. is at a 30 year high, and many Americans have noticed a cost increase in the items that they purchase every day. Last month, President Biden renominated Jerome Powell to a second term as Federal Reserve chair and combating inflation will be Powell’s top priority entering this term, or at least the priority that people care about the most. There are several levers that the Fed can pull to attempt to combat this inflation. As Powell announced last month, quantitative easing is the lever that they plan to pull right now. Quantitative easing, or QE, is a Fed program that purchases financial assets from the market in order to get more cash into the American economic system.…

The Rise of Business Development Companies

Lately, there has been a lot of buzz surrounding business development companies and people’s preference toward them as opposed to investment banks. Business development companies are essentially publicly traded closed-end funds that provide capital appreciation and income. BDCs give smaller companies the capital they need for growth. They are independent and answer to their own board of directors. BDCs are a combination of an investment company and an operating company that provide financing to small- and mid-sized businesses.

Small to mid-sized businesses prefer BDCs to investment banks because investment banks are highly regulated by the Federal Reserve. BDCs represent a transparent portfolio of loans that can be traded publicly with little to no regulation.…

The High Cost of the Holidays during Covid

This year, it looks like there’ll be one uninvited guest at your house for the holidays: inflation. The coming holiday season will be one of the most expensive on record given the rising costs of food (a 5.3% gain since last year) and a higher Consumer Price Index (a 6.2% rise since last year). The CPI reached a 30-year high in October, according to the U.S. Bureau of Labor Statistics. Rising inflation might cause the Federal Reserve to continue its policy course. However, according to experts, these bumps are all very normal as the economy gets back up and running. 

Supply chain issues continue to be a problem as well.…

Coronavirus and the Market Part IV: Jerome Powell -The Hero We Needed

In the last article from this series in June 2020, I spoke about the impending doom of rising interest rates. I mentioned how this would be precipitated by additional federal government stimulus legislation and the need for the U.S. Treasury to issue more debt to fund so much new federal spending. For once I was right. The yield curve did steepen back in June. Specifically, most of the steepening occurred primarily on the 20-year point due to the new treasury issuance with that same maturity, the rest of the curve was relatively unchanged from the 0-10-year points. As a quick refresher, since the yield curve represents expected future interest rates, it also indicates growth expectations for the general economy. …

The NYU Stern Fintech Conference Goes Virtual in 2021

On Friday March 5, NYU Stern’s Fubon Center for Technology, Business, and Innovation hosted Stern’s fourth annual Fintech Conference via a Virtual Zoom Webinar. The conference theme was “No Borders, No Barriers,” highlighting that technology has no passport. In line with that theme, the event featured an international slate of speakers from several countries, including the United States, Israel, India, Argentina, United Kingdom, California, and the Netherlands.

The conference was once again a smashing success with 1,200 registrants signing up for the virtual format, bringing together “top fintech scholars, forward-looking financial institutions, innovative fintech startups, and leading fintech investors” in the words of Kathleen DeRose, Director of the Fubon Fintech Initiative and Clinical Associate Professor of Finance at Stern. …

Short Squeezes – A Discussion with Professor Ian D’Souza

What is a short squeeze and is this a common phenomenon?

Before we can get to answering what a short squeeze is, we need to answer some preliminary questions.

Let’s start with what is short?

A short is a position taken by an investor or trader making a bet that an asset’s price will go down, not up.  On average, under 5% of the S&P market capitalization is shorted. Most participants in the stock market invest because they believe US stocks will go up over time. Shorts are a very small group of investors betting against most other investors’ view of the direction in the market and as such, are viewed with disdain.…

I Disagree Professor, Amazon Is NOT Antitrust

Amazon has found its way to market headlines yet again in 2021. This time it’s a relatively small surprise, Jeff Bezos is stepping down as CEO, effective later this year. I trust you did not believe that any human, even Jeff Bezos, could run a space exploration organization, build the world’s most profitable company from scratch, and own the Washington Post all at the same time indefinitely. After his resignation, Bezos will stay with the firm as executive chairman of the board. Andy Jassy, who was formerly head of Amazon Web Services (AWS), the massively successful cloud services platform offered by Amazon, will take over as CEO of the company. …

This time, it’s different

By Nicolaus Schmandt

The image for this article shows the cycle of human emotions as the stock market goes through booms and busts. Investors should never forget it, especially as we are moving towards the “euphoria” peak, with speculative bubbles growing in tandem. Each time this happens, the bubble comes with a narrative as to why stocks should be so much above normal valuations, or why the rules don’t matter anymore. In the years leading to 2008, everyone was moving to the sunbelt and their properties and mortgages would never go down in value. In 1999, the internet was going to fundamentally change the world in such a way that normal valuations simply wouldn’t apply.…

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