Wednesday, September 7, 2011

Importance of Bond Duration

One of the regular risks, interest bearing instruments like bonds are prone to is the interest rate risk, which is the variation in the price of the instrument in relation to the changes in the general interest rates. The concept of 'duration' is the effective way of determining and mitigating the effects of interest rate alternations. It measures the sensitivity of the bond's price to movements in interest rates and determines in how many years a bond shall repay its true cost.

Duration of a bond is usually calculated as a percentage reduction in the price of the instrument to the percentage increase in the redemption yield of the instrument. The unit of duration is generally measured in 'years' and ranges between 0 years and the maximum maturity of the bond.


Steps to Calculate Duration:

Coupon rate determination.

• Determining PV (Present Value) factor using the yield per period.

• Then PV factor is to be multiplied with coupon amount to arrive at the PV value of the coupon payment.

• The aggregate of the present value of cash flows is arrived to determine the market value of the bond.

• For each year, the percentage of present value in total market is arrived. (step 3 / step 4).

• The resultant figure is multiplied with the year and the aggregate amount is the duration.

Factors influencing duration are usually the bond's maturity time and the coupon rate. A bond maturing in 2 years recovers its cost in quicker time as compared to a bond maturing in 10 years. Hence, duration varies as per the maturity, shorter maturity has lower duration and similarly longer maturity has higher duration. Coupon rate also is a key factor in determining the cost recovering period of the bond. A higher coupon bond return the cost in quick time compared to a lower coupon bond. Hence, higher coupon bonds have lower duration and lower coupon bonds have higher duration.

Duration guides investors in choosing the bond as per their risk appetite. Investors seeking quick cost recovery and minimal sensitivity to interest changes can use the concept of duration and also speculators anticipating changes in interest rates can adjust their portfolios.

Importance of Bond Duration


Tuesday, September 6, 2011

10 Smart & Easy Tips to Sell Online - Get Real Value Turning Unwanted Items Into Cash

We all have boxes in our attics, closets or basements with items we once loved but have been sitting untouched for years. If you want to sell any of these items online here are 10 tips on how to sell them the smartest way for the highest price in your pocket.

Using on-line services like eBay and Craigslist you can quickly convert unwanted items into cash in your pocket. And you might even find those long lost items while creating more room for living.


Real Value Tip 1. Make Sure You Know Exactly What You Are Selling.

When selling something it is very important that you know as much about it as possible. If you don't know what it is say so in the description and ask the viewers to tell you more about it. The more you know the easier it is for you to describe it and to maximize the final sales price. Be honest and thorough.

Real Value Tip 2. Know What The Item Is Worth & Decide What Is The Lowest Price You Will Accept.

There are a number of free resources to determine the value of your items. There are forums, blogs and on-line authorities. You can also check what similar items have sold for recently on sites like eBay. You also have to decide what the lowest price you are willing to accept for the item. If a tea set similar to the one you inherited from your grandmother sells for 0 on eBay but you won't sell yours for less than 0 don't bother listing it for sale and keep it safe to hand down to your children or grandchildren.

Real Value Tip 3. Check The Current Listings & Recent Sales History.

Before listing an item for sale on Craigslist or eBay it's a good idea to check out the current competition. If you are selling an old Pentax film camera and there are already a dozen similar ones for sale at prices below what you want, you might consider holding off or selling it on another site with less competition. You can also check out how many similar items sold on that site in the last 30 days and what the sales price range was. The more you know the better you are prepared.

Real Value Tip 4. Decide On The Best Sales Site For Your Item.

I find some items make more sense to sell on eBay and others on the local Craigslist or other local on-line sites. In general terms if it is difficult, large and heavy or very expensive to ship, like large furniture, I prefer the local ads. If it is small enough to easily ship and has a higher value, like a camera, book or collectible trading cards, I prefer the national and international services like eBay.

Real Value Tip 5.Take Good, Sharp & Informative Photos.

The better your photos of the item(s) for sale the higher the bidders are comfortable bidding. A picture is worth a thousand words. And, since the potential buyers usually can't hold and study the item in their hands, they want lots of sharp, well lit photos of as many sides of the item as possible.

Real Value Tip 6. Write Up An Accurate, Complete & Interesting Description.

The better you describe the item the more people you are likely to attract and interest. What would you find more interesting: "For Sale: used 35mm camera with lens. Have not used in years." or "For Sale: Mint condition 35mm Canon EOS Rebel camera with 50mm f1.8 lens, UV filter, lens cap, strap and Canon automatic flash." Be thorough, accurate and informative. It's better to write too much than not enough and use lots of description words in the title and the description.

Real Value Tip 7. Decide When To List & For How Long.

Craigslist and some of the local sites determine how long your ad runs, but you decide when to list it. Several of us at Real Value have found the best results listing the items on weekends as more people have time to scan the on-line ads, and we prefer to list them in the afternoon or early evening when the traffic is highest. When it comes to eBay listings, the same afternoon and early evening weekends seem to work best. And we usually go with the automatic 7 day period on eBay as we have not found the extra cost of longer listing time to be worth it.

Real Value Tip 8. Answer All Questions Promptly & Politely.

It should go without saying, but we will remind you that most people prefer to deal with others who are polite and honest. Answer promptly, which means check your listing and emails several times a day. And use terms like "Thank you" and "I appreciate your asking that" often.

Real Value Tip 9. Beware Of Scams & Worse.

Most people are honest and ethical, but not all. As my grandmother used to say "If it looks to good to be true....." for a reason. Keep your wits about you. Do not release anything until you are paid in full with cash or cleared funds. Also be careful when meeting a stranger and make sure to do the transaction in a public place and don't go alone...just in case. Remember something else our grandparents used to say "It's better to be safe than sorry."

Real Value Tip 10. Arrange Shipping Or Pick Up Properly.

Once you have been paid you need to hold up your end of the bargain too. Arrange for shipping or a safe pick up at the earliest possible time. Good luck with your on-line sales and just remember to do your homework first, and to be smart and safe always.

10 Smart & Easy Tips to Sell Online - Get Real Value Turning Unwanted Items Into Cash


Stocks VS Bonds - Differences and Risks

In the world of investments, you'll often hear about stocks and bonds. They are both feasible forms of investment. They allow you the opportunity to invest your money with a specific company or corporation with the possibility of future profits. But how exactly do they work? And what are the differences between the two?



Let's start with bonds. The easiest way to define a bond is through the concept of a loan. When you invest in bonds, you are essentially loaning your money to a company, corporation, or government of your choosing. That institution, in turn, will give you a receipt for your loan, along with a promise of interest, in the form of a bond.

Bonds are bought and sold in the open market. Fluctuation in their values occurs depending on the interest rate of the general economy. Basically, the interest rate directly affects the worth of your investment. For instance, if you have a thousand dollar bond which pays the interest of 5% yearly, you can sell it at a higher face value provided the general interest rate is below 5%. And if the rate of interest rises above 5%, the bond, though it can still be sold, is usually sold at less than its face value.

The logic behind this system is that the investors deal with a higher rate of interest then the actual bond pays. Thus, the bond is sold at lower value in order to offset the gap. The OTC market, which is comprised of banks and security firms, is the favourite trading place for bonds, because corporate bonds can be listed on the stock exchange, and can be purchased through stock brokers.

With bonds, unlike stocks, you, as the investor, will not directly benefit from the success of the company or the amount of its profits. Instead, you will receive a fixed rate of return on your bond. Basically, this means that whether the company is wildly successful OR has an abysmal year of business, it will not affect your investment. Your bond return rate will be the same. Your return rate is the percentage of the original offer of the bond. This percentage is called the coupon rate.

It is also important to remember that bonds have maturity dates. Once a bond hits its maturity date, the principal amount paid for that bond is returned to the investor. Different bonds are issued different maturity dates. Some bonds can have up to 30 years of maturity period.

When dealing in bonds, the greatest investment risk that you face is the possibility of the principal investment amount NOT being paid back to you. Obviously, this risk can be somewhat controlled through the careful assessment of the companies or institutions that you choose to invest in.

Those companies that possess more credit worthiness are generally safer investments when it comes to bonds. The best example of a "safe" bond is the government bond. Another is the blue chip company bond. Blue chip companies are well-established companies that have proven and successful track records over a long span of time. Of course, such companies will have lower coupon rates.

If you're willing to take a greater risk for better coupon rates, then you would probably end up choosing the companies with low credit ratings, companies that are unproven or unstable. Keep in mind, there is a great risk of default on the bonds from smaller corporations; however, the other side of the coin is that bond holders of such companies are preferential creditors. They get compensated before the stock holders in the event of a business going bankrupt.

So, for less risk, choose to invest in bonds from established companies. You will be likely to cash in on your returns, but they will probably not be very large. Or, you can choose to invest in smaller, unproven companies. The risk is greater, but if it pays off, your bank account will be greater, too. As in any investment venture, there is a trade-off between the risks and the possible rewards of bonds.


Stocks represent shares of a company. These shares give part of the ownership of the company to you, the share-holder. Your stake in that company is defined by the amount of shares that you, the investor, own. Stock comes in mid-caps, small caps, and large caps.

As with bonds, you can decrease the risk of stock trading by choosing your stocks carefully, assessing your investments and weighing the risk of different companies. Obviously, an entrenched and well-known corporation is much more likely to be stable then a new and unproven one. And the stock will reflect the stability of the companies.

Stocks, unlike bonds, fluctuate in value and are traded in the stock market. Their worth is based directly on the performance of the company. If the company is doing well, growing, and attaining profits, then so does the value of the stock. If the company is weakening or failing, the stock of that company decreases in value.

There are various ways in which stocks are traded. In addition to being traded as shares of a company, stock can also be traded in the form of options, which is a type of Futures trading. Stock can also be sold and brought in the stock market on a daily basis. The value of a certain stock can increase and decrease according to the rise and fall in the stock market. Because of this, investing in stocks is much riskier than investing in bonds.

The Wrap-Up

Both stocks and bonds can become profitable investments. But it is important to remember that both options also carry a certain amount of risk. Being aware of that risk and taking steps to minimize it and control it, not the other way around, will help you to make the right choices when it comes to your financial decisions. The key to wise investing is always good research, a solid strategy, and guidance you can trust.

Stocks VS Bonds - Differences and Risks


Perforated Rack Card Marketing Ideas - Inviting More Restaurant Diners

People can hold onto restaurant rack cards with many uses. Moreover, the printed materials can offer special promotions to dining consumers. Your restaurant can increase its client base with the use of perforated cards. The prints are an effective marketing tool that can have many benefits to restaurant diners. Here are some of rack card marketing ideas that will help you promote your business.

o Calendar: You can print a calendar on the perforated portion of your rack cards. The calendar can be in a size of 2" 3.5", depending on the dimension of your printed materials. The other side of the mini rack card calendar can contain the special menu items that you offer for a day. This will help dining consumers to have smart decisions on what to purchase on a particular day.


o Location Map: The tear-off portion of your rack cards can contain a sketch or map to point out the location of your restaurant. You can also include landmarks and other points of interest in your locale on the other side of the tear-off portion. Customers will have an idea where to go after eating at your restaurant.

o Meal Coupon: Discounts and special offers can be offered through the perforated cards. The tear-off portion can serve as a coupon which can be used to upsize drinks, get a free dessert, and have 5 to 20 percent discount on your special menu items.

o Raffle Entry: Your card's tear-off part can be a raffle entry. You can print your printed materials using 13 pt. Cardstock, Uncoated so that people can write on your prints. Customers can indicate their names, addresses and contact numbers on the space provided on the tear-off portion of your rack cards.

You can print perforated rack cards with the help of a reputable printing company. Search for online printing reviews to help you seek for a reliable print shop in your locale. Online printing reviews are consumer feedback and comments about printing services. Type in printing in Austin, TX, for example, and you will know the local printing shops that offer rack card printing. Create high-quality rack cards to effectively market your restaurant.

Perforated Rack Card Marketing Ideas - Inviting More Restaurant Diners


Monday, September 5, 2011

MacBook Warranty - Are You at a "Pro" Status With Your Insurance?

Are you a MacBook or MacBook Pro owner? If so, are you protected with a MacBook warranty? If your answer is yes, does your warranty cover everything from malfunctions to accidental damages? I think not because most warranties do not cover accidental damage such as the Apple warranty. For your MacBook, which is a not-so-affordable brand of laptop, do not buy just any warranty plan you discover. Instead, make certain that the warranty you buy for your MacBook is the one that has a professional status - the one that is the leader in almost everything when it comes to laptop warranties

Let us first consider the price. In general, the price of the warranties offered at SquareTrade is forty percent less than the price of the warranties offered at the other stores. For the Apple laptop, it is forty-eight percent or almost fifty-percent less than the MacBook warranty offered by Apple. This is because SquareTrade does not include the retailer, thereby, saving more and giving them the capacity to cut back more on their prices. SquareTrade also offers a low price guarantee saying that if in case you discover a warranty provider that offers the same services with cheaper prices than SquareTrade, then they are ready and more than willing to give you a refund - one hundred and ten percent of the difference in the prices of the two.


Other than the low prices, SquareTrade offers an extensive coverage. For all electronic gadgets, all mechanical or electrical problems or issues that happen with normal usage are addressed. In addition, if you avail of the ADH protection or Accidental Damage from Handling insurance, problems or issues related to these will also be addressed or fixed. This is one of the main dissimilarities with other warranty providers such as the MacBook warranty from Apple.

Another amazing feature and advantage of buying your MacBook warranty from SquareTrade is online management. On their site, using your own login, you will find all your warranty plans - that is, if you have more than one. You can also submit a claim online and even transfer or stop your warranty plan. Moreover, SquareTrade does not pressure you to immediately purchase their warranties. Instead, you are given three months from the time you bought your item to think about buying their warranties. Within these three months, you can take all your time to read everything you need and want to know about SquareTrade.

Another great future of SquareTrade is its five-day service guarantee. If you love your MacBook so much that you cannot bear to be away from it for more than a week, then SquareTrade's MacBook warranty is the right one for you. At SquareTrade, your item will be repaired within five days or else they will give you a refund. In addition to this, while your item is undergoing repair, you are updated every step of the way through electronic mail. Or, you can simply login to the site and see the status for yourself. With these features, truly, no warranty provider is as "pro" as SquareTrade.

MacBook Warranty - Are You at a "Pro" Status With Your Insurance?


Discount Vouchers - Benefits Of Printable Vouchers

There are two categories of online discount vouchers. In some cases, you have to save the code and enter it online on the company website. However, printable vouchers are a bit different. You can get a printout and save them like any other document as a hard copy. How do you use these printable discount vouchers? Instead of punching an online code, you have to present them at the required outlet. Thus, this seems a more convenient option for people who go shopping regularly.

The benefits of printable vouchers


Some people do not like to view the product on their computer screen. Instead, they like to see the product physically before paying for it. For such customers, printable vouchers are quite suitable. If you lose the voucher, you cannot get any kind of discount. Hence, keep your printable voucher in a safe place.

Sometimes the discount given is for some restaurant which offers a discount. In this case taking along your printed voucher gets you the discount.

Online discount vouchers do not work in some cases

When you are shopping online, you are using the web services of the required company. It may happen that one of the servers may not be working. You can face technical errors when you are entering the codes of your discount voucher. Printable vouchers are used for buying even furniture and antiques. This is because you need to feel the product and check the quality before buying it. However, if you are buying an annual subscription of your favorite magazine; you don't need to do the same thing.

Buying products at their original prices is very different from buying them at discounted ones. Some people purchase everything from sales and discounted stores to save money. This in my opinion is the most sensible thing to do. Why should anyone pay more when you can get it for less!

How can you find printable vouchers?

Every company does not offer the option for printable discount vouchers to its customers. In some cases, you can only copy the required code. You have to search online for the companies which offer this facility. The process of printing these vouchers is very simple. You just need to paste the coupon in the form of an image and get a printout. In some cases the option for printable version makes it easier to print.

No one wants to buy a product for hundred dollars when a store is offering it for half the price. Thus, most people spend all their money when forty or fifty percent of the actual prices are eliminated. You can even use the search engines for this purpose and get online reduction coupons. Some companies offer reductions at specific times of the year. For instance, you can term Halloween and Christmas as related examples. On the other hand, big organizations put up sales more regularly to benefit their customers.

Discount Vouchers - Benefits Of Printable Vouchers


Concept of Yield to Maturity (Bonds)

Case: A coworker of yours was discussing her investments with a broker. Your coworker was confused because she had purchased a 10% bond but the broker kept repeating that it had a 9% yield to maturity. What is Yield to Maturity?

Yield to maturity (YTM) is the yield promised by the bondholder on the assumption that the bond will be held to maturity.


YTM also assumes that all coupon and principal payments will be made and coupon payments are reinvested at the bond's promised yield at the same rate as invested.

YTM is a measurement of the return of the bond and its calculation is identical to the calculation of internal rate of return (IRR).

Applying to the situation mentioned, the coworker purchased a bond with a coupon rate of 10 percent.

The 9 percent YTM applies if she holds on to that bond until it matures while reinvesting all interest payments she received from the instrument.

The significance of YTM is that it allows comparison of bonds with different coupon rates and prices.

1) Calculator: enter n, M, PMT, PV and VL and request k

2) Trial and Error: find k such that VL = INT({PVIFAM n) + M(PVIF M n)

3) Yield approximation formula:

YTM = INT + (M- VL)/ n


(M + VL)/2


VL = the value of the bond

kc = the fixed coupon interest

n= the number of periods until maturity

M = the dollar principal payment at maturity

INT = periodic dollar coupon payment = kc x M

kd = discount rate on the bond

If a bond's current yield is less than its YTM, then the bond is selling at a discount.
If a bond's current yield is more than its YTM, then the bond is selling at a premium.
If a bond's current yield is equal to its YTM, then the bond is selling at par.

Concept of Yield to Maturity (Bonds)