If you’re new to the stock market, then you have probably set your sights on low-priced stocks.

But the question is: are they worth it?

Will buying cheap stocks based on absolute price help your portfolio? Or will they destroy your otherwise fantastic investment strategy?

Before you go ahead and buy one, make sure to read the pointers below.

What is a Cheap Stock, Anyway?

When it comes to cheap stocks, ‘penny stocks’ immediately come to mind.

The name easily describes itself—they’re stocks you can buy for under a penny. Just think of Elite Pharmaceutical, which you can buy for 37 cents a share.

Apart from the popular penny stock, there are some that trade at a low absolute dollar figure. A good example is Hudson City Bancorp, which you can buy for $9.

That said, price isn’t the only thing that makes cheap stocks, well, low-priced.

The stock is considered cheap if it trades below 50% of its pegged amount. In essence, not all stocks that are cheap are inexpensive.

Case in point: buying Berkshire Hathaway stock, specifically the class A ones. This will set you back $200,000 a share—cheap compared to its value of $400,000+ each!

Why Buy Penny Stocks? The Psychology Behind this Unique Investing Strategy

Investors often ask this question to so many money managers: why would you sell a valuable stock at a meager price?

According to experts, it all boils down to these four things:

• Greed

No one can predict the future. However, some try to predict earnings, stocks, and other variables according to the current market climate.

While some come true, most of the time, they don’t. They end up becoming worthless stock, which is why owners will do anything to get rid of them.

• Fear

Once the stock quotes begin to take a slow, steady slide, the fear envelopes investors. Some are worried that the tumbling prices will take their entire life savings along with them.

So while there’s still some net current asset value, many will sell them while they can.

• Pain

This specific investment strategy brings more than just fear—it leads to pain as well.

Each stock represents the pain of losing everything. So instead of dealing with them, investors will sell them for cheap.

• Pessimism

Even if you have high-dividend yielding stocks at hand, investors get to be pessimistic about it. Because of the lack of buyers and sellers, they will try to eliminate all of them.

Should You Buy Cheap Stocks?

Yes, because they yield spectacular returns.

Below, you’ll see the value of buying cheap stocks relative to the following:

Dividend Yield

For best results, you should buy cheap stocks relative to the share price. They should be higher-dividend yielding stocks, otherwise known as large dividend yield stocks.

According to a study by the Tweedy Browne Company, these stocks bring better yields in due time. That’s because they get to beat the market by significant amounts.

Earnings

Another way that cheap stocks dominate the market is through earnings.

Make sure to buy low price relative to earning stocks, otherwise known as low PE stocks. According to another Tweedy Browne study, they can give you high returns in the years to come.

In fact, these stocks dominated from 1957 to 1971, even with the rapidly-sinking stock market.

Cash Flows

Another strategy is to look at the stock price relative to the money that the company has brought.

For top money management firms, cash flow is the best way to measure profit. That’s because it represents the money and not just the accounted profit.

Tweedy Browne’s above-cited study also proves this to be true. Results showed that such stocks outperformed their peers over time.

Net Assets

This method is all about buying stocks that come with a low price-to-equity value.

It’s good to do stock trading when the company’s share price is below the share equity.

Another advantage of this cheap stocks sub-strategy is that assets prove to be more stable than the company’s net earnings. The latter can be inflated but not assets.

Cheap Stocks Win a Lot, But be Careful

Some money managers fail with penny stocks because of the risks inherent to them. So before you make a trade, you should be on the lookout for the pump and dump scam.

This occurs when people purchase penny stocks at meager prices. They hype the company to help increase the share value.

Because of this, buyers rush in to buy the stocks, most of which are sold at high prices. The result: tremendous losses on the part of the buyer.

That said, make sure to assess the intrinsic value before taking a dive. When it comes to this fantastic value investing strategy, knowledge is power.

Final Thoughts

As you’ll see, buying a low absolute dollar amount stock offers high dividend yields. They have a proven high-performance record, as the Tweedy Browne studies above show.

Buying cheap stocks is the best investment strategy right now, so make sure to try it!

Investing in gold, regardless of the form, remains among the top choices of investment among people for decades. But what we consider as an ever-green investment option has witnessed some dramatic changes over the years that have certainly affected its value in the market and the way it is getting perceived by the investors. Those who are interested in gold, invest in it via ETFs, or exchange-traded funds, investing in gold miners’ stocks or physically buy gold in Canada. Each of these options is equally popular among investors that have helped them create an impressive investment portfolio.

However, like any other investment option,  gold also has its fair share of critics who advise against it. There is certainly a debate over whether it still pays to invest in gold or not. On one hand, where some argue that it is a material to be used in jewelry and not a lucrative investment option, others believe that gold is an asset that proves to be financially helpful for people in different ways due to its intrinsic qualities.

A Brief History of Gold

To gain a better understanding of gold and its investment options. It is important to look at its origins and history. As we are all aware that in ancient times in 2000 B.C, gold was first used as a material for jewelry and it continues to date but soon people realized its monetary value and started using it as a currency in 560 B.C. Gradually, gold was accepted and recognized as a highly lucrative investment option in the different corners of the world.

Gold in the Modern Economy

Fast forward to today, gold is still a sign of the wealth of people everywhere and carries unparalleled importance in society. It is certainly an important part of the world economy and it can easily be validated by examining the balance sheets of financial organizations or central banks. In today’s time, these organizations carried almost one-fifth of the gold and they are constantly making efforts to collect more.

Gold Preserve Wealth

One of the main reasons why gold is preferred by the top financial organizations in the world is because for generations it has successfully preserved and stored wealth. It may not have provided investors with much liquidity with its previous investment options but the same has been successfully solved with the current different forms of gold investments.

Apart from preserving wealth, it significantly multiplies in its monetary value over the years. If you invested $100, 10 or 20 years ago in gold, your amount would have multiplied significantly in 2021, but if you kept away $100 as savings, it would still be the same.

Gold as a Safe Haven

Every other investment option is easily affected by even the smallest highs and lows in the market but the gold value is not that easily collapsed. The current economy of the world may not be at its best considering the recent pandemic, but when you look at the prices of gold, you will find that investors who were smart enough to put their money in gold are benefitting even in today’s scenario.

Gold as a Diversifying Investment

There is no surprise that gold is considered a diversifying investment in today’s time. It has historically served as an investment option for people and even today, it is helping investors diversify their portfolios. With this diversification, people who are worried about the declining US dollar, inflation, and protecting their wealth can put a  stop to their worries.

Various Forms of Gold Investment Options

In today’s time, investors are presented with various forms of gold investment options that they can use to enrich their portfolios. Depending in  their needs and flexibility, they can choose any option from below-mentioned ones:

• Gold Mutual Funds
• Gold Bullion
• Gold Jewelry
• Gold Futures
• Gold Coins
• Gold Companies
• Gold ETFs

The Benefits of Investing in Gold

Investing in gold can be beneficial to both long term and short term goals. For those looking for investment yield, investing in gold can be a good way to increase wealth over time. The benefit of investing in gold is that prices do not fluctuate as much as other investments, and this allows investors to profit when the market fluctuates and prices are unpredictable. This is unlike other investments, such as stocks, bonds, or mutual funds, where losses and gains can vary depending on the government policies and economic conditions of the country. The benefit of investing in gold is also that gold itself does not lose value, so holding onto gold is a good investment regardless of the economy.

Investing in gold can also provide tax advantages as well. One of the benefits of investing in gold investments is that there are no annual tax fees associated with them. The best benefit of investing in gold is that there is very little risk associated with them, as even if the market takes a dip, gold investments will generally hold their value. Additionally, gold investments are not subject to inflation and are not affected by governmental policies around the world.

Investing in gold is a sound choice for anyone who wishes to diversify their financial assets. Gold is one of the safest and most secure investment options available and also offers the potential for large profits. The benefit of investing in gold investments can give you a valuable return on your investment, while also minimizing the potential for financial loss.

One thing that’s on everybody’s mind these days is money. Well, it’s not healthy to always think about money, but it’s something you cannot ignore either. 

If you wish to make something out of your personal finances or in case you believe your personal finances are all jumbled up, you’ve come to the right place. My article is going to help you get where you want to be. 

Although the topic of personal finance can get somewhat overwhelming, I’ll try to make it a little simpler. Now let’s break down the personal finance management ways, have a look: 

Set Your Goals 

First and foremost, you need to start with digging deep into your needs as well as wants. Once you have the list, slowly commit to working towards them and don’t forget to prepare a budget when doing it. 

But before you do, you need to ask yourself a few questions: 

• What to do to make my life better? 
• What do I want for my personal, family, and work life? 
• What kind of experiences do I need to have in life? 
• What things do I need to purchase? 
• And lastly, how much money do I need to have for a decent living? 

Once you have the answers to all these questions, it will become easier for you to prepare your budget and set goals for your future. Be sure to keep it flexible though so that you can make changes to it whenever required.

Debt Management 

Yes, it’s true that preparing a budget and setting financial goals can help you manage your money. However, you also need to manage your debt in order to master your personal finances. 

Hence, you need to get an excellent debt management plan to get all your previous debts under control. A debt management plan includes various effective strategies to lower your current debt and gradually move towards entirely alleviating it. 

The best part being, you can also make your own customized debt management plan. Once you’re done making it, make sure to consult a credit counselor for it. A credit counselor will help you implement your debt plan correctly.

Access Your Situation Afterward 

Now that you’re done paying your debt back, it’s time for a little evaluation. Before moving ahead, you need to know your situation, where you stand. It simply starts with analyzing what you have along with your needs and wants. 

First, look at the cash flow along with the money that’s coming in and going out. You must know how much you exactly earn and your monthly spendings. 

After you’re done with all these calculations, the money you’ll be left with will be your asset. Since you’ll be done with paying your debts, all that’s left will be yours.

Cut Your Monthly Expenses 

You can ask any financial advisor and he’ll tell you to cut down on your expenses and save some money for the rainy days. Ideally, you should have a backup for at least 3-6 months. 

What will happen if you lose a job? What if there’s a natural calamity? Having a financial backup is critical, so you must start adding a little to your savings account on a weekly basis. 

You can do that by cutting your expenses and saving those extra bucks. It’s pretty simple. Skip those evening lattes and save $5 daily. $300 a month is a big amount, guys.

It’s simple. Isn’t it? With a little planning and a few smart strategies, you can securely move towards achieving your financial goals and pipe dreams. I wish you good luck, my pals! 

When you’re an expat, there are some new tax considerations that come into play. For example, the IRS gives those who live abroad some special considerations when it comes to their taxes. It is important, however, to keep in mind that the IRS has made changes and there are now two different brackets for US expats: one for single and one for married people filing jointly with a spouse who lives abroad. Here, we will explore six vital things you should know about US expats taxes before you file next year! 

1. You can still receive many of the same tax benefits as citizens back home

The most obvious benefit is being able to have your worldwide income taxed by just one country, instead of having to pay both countries’ taxes on the same income. If you want additional and more detailed information about this, a simple google search with the phrase “US citizens living abroad taxes” will provide you with everything you need! There are huge benefits that you do not want to miss out on! The IRS gives those who live abroad some special considerations when it comes to their taxes.

2. You still have to file expat taxes or face stiff penalties

It’s common for new US expats, especially those working overseas, to think they don’t have to file their US taxes. However, if you meet the minimum filing requirements for your expat tax status, then just like every other American citizen, you are obligated to file a federal tax return each year through the IRS in order to avoid stiff penalties. No matter where in the world you live and work, as an American citizen it is your responsibility to file your taxes each year.

3. The filing deadline may be earlier

When you’re an expat, there are some new tax considerations that come into play, and one of the biggest is that the filing deadline may be earlier than you think. If you live abroad for at least 330 days out of 365 within a twelve-month period, or you are married filing jointly with a spouse who lives abroad, then your expat taxes are filed according to the same deadline as US citizens back home. This means that if you file an extension for your taxes in the US, then there is no need to do so for taxes filed from outside of the country unless you are leaving them for your tax preparer to complete.

4. You may be able to deduct certain moving expenses

When you’re an expat, there are some new tax considerations that come into play, and one of the biggest is that your moving expenses may now be deductible on your US expat taxes! The main conditions are that the move must be job-related, that your new home must be in a foreign country, and the new job must pay you at least $72,000 annually.

5. You can exclude up to $100,000 of gains on your home sale

When you’re an expat, there are some new tax considerations that come into play, including special rules for selling your primary home. In most cases, as a US citizen living abroad, you can exclude up to $250,000 from your income for selling your primary residence if it has been lived in for at least two of the past five years. If married filing jointly with a spouse who lives abroad, that amount increases to $500,000.

6. You can exclude up to $250,000 of income from a foreign pension with US tax withholding

Withholding taxes for pensions is not mandatory in most cases. However, a few exceptions include if you reside outside of the country where your retirement funds were earned, and you claim benefits from a US-based company or government agency. In these cases, it’s possible to receive credit for the US taxes that were withheld on your retirement fund by completing form 8891.

Now you know six vital things about US expat’s taxes! Keep these tips in mind to help navigate this year’s tax season efficiently and accurately. And remember, even though filing an expat tax return is complicated, it’s always better to make sure you don’t pay more than what you owe, rather than risk owing additional taxes due to poor planning!

Having your car suddenly break down can be an incredibly tough and stressful experience. Many of us rely on our vehicles every day, so repairing your car can often be an urgent need. More than anything, though, the costs attached to fixing broken down vehicles can be prohibitively expensive, and buying a new one is even more so. It’s therefore important that you are prepared for this possible event, so you’re not blindsided by the repair costs. Here are a few tips to help you with this.

Invest in Breakdown Cover

Since you never know if or when your car will break down, insurance to cover this possibility is a valuable way to prepare for it. Breakdown cover is widely available, and costs a fraction of paying up-front to recover or repair your car. As such, while additional monthly costs can be hard to stomach, breakdown cover can prevent a sudden breakdown from seriously damaging your finances. At the very least, paying for insurance to guarantee pick up and recovery of your vehicle will ensure you are not stranded when it happens.

Factor Repairs into Your Budget

Buying a car is a sizeable one-time purchase for most of us, but this is far from the only cost associated with running one. Between automotive insurance, road tax, and petrol, any car owner can tell you that they come with a hefty monthly bill attached. It’s consequently good common sense to spend some time drawing up a budget for your vehicle expenses, and to include an additional allowance for any potential one-time repair costs. This will help you avoid being put in a precarious position financially by any sudden issues with your car. This is even good practice with breakdown cover, since insurance providers can never be guaranteed to pay out in all instances.

Purchase an Extended Warranty

New cars, as well as most used cars from accredited dealers, come with a warranty attached, in case of breakdowns. This is normally either 6 or 12 months. However, dealer warranties don’t necessarily cover all issues, and used cars may be renovated to just work for the warranty period, and not much longer. Purchasing a third-party warranty with longer and more comprehensive coverage can thus be a great way to achieve some peace of mind in this respect. This is especially true when your car’s issues are beyond repair, as a comprehensive warranty can ensure you a working replacement, potentially at no additional cost. Warranties can vary widely in the extent, cost, and length of their coverage, so you can purchase the best car warranty for you, whatever your needs and budget.

Contact Your Manufacturer

Finally, if you do find yourself on the hook for a substantial repair bill, a call to the manufacturer of your vehicle could save you a lot of money. Wide-scale issues with specific car makes can force manufacturers to offer complementary repairs, or even total refunds, in some cases. It’s therefore worthwhile to do a little research if this occurs, to see if you can take advantage of this. For smaller repairs, manufacturers sometimes also offer “goodwill” warranties, if you contact them directly.