Archive forCash

5 Reasons Why You Should Always Carry Cash on You

As CapitalOne likes to ask, what's in your wallet? If you're like many Americans, it might be pretty light on cash.

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Mike Epps Someone Jacked My Cash Stash at LAX

Mike Epps believed for a minute someone from LAX jacked thousands of dollars from him, and it got heated between the actor and the cops.

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Who Holds Cash?

Everyone has a different relationship with cash. Some carry and use it regularly while others never carry cash. Still others keep it on hand for emergencies but prefer a debit or credit card for everyday purchases. Can these behaviors provide insight into the future of cash holding for consumers? Thats the question explored in a new FedNotes paper, Who Holds Cash?

Using data from the 2012 Diary of Consumer Payment Choice (DCPC), the Federal Reserve’s Cash Product Office (CPO) analyzed survey responses from nearly 2,500 study participants. Findings from the DCPC show that 89 percent of the population holds cash to some extent (either sometimes or always). Additionally, the number of notes held by the public continues to grow with nearly $1.4 trillion in circulation worldwide.

In the new paper, researchers found that people who hold cash tend to have a larger preference for credit cards, and tend to be older and more affluent. Beyond this, different subgroups of people who hold cash exist, with some using cash exclusively as a payment instrument and others holding onto cash solely for emergency uses.

By looking at how often participants from the DCPC study held cash and how often they made cash transactions, four subgroups emerged:

  • Cash Lovers: Always hold and always spend cash.
  • Just-in-Case Holders: Always hold cash but never use it. They view cash as a contingency fund.
  • Cash-Averse: Neither holds nor uses cash as a payment instrument.
  • Limited Choice Spenders: Do not hold cash but consistently use it to make purchases.

How do your cash holding patterns match up to these profiles? Read the paper to find out.

You may also want to read:

  • What Does Your Payment Diary Reveal?
  • How the Fed Disposes of Old Cash
  • Inside the $5 Savings Plan
  • Cash Remains a Leading Payment Form

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How to Make Extra Cash on Land Holdings

Congress has slammed a door on companies trying to spin off their property holdings into real-estate investment trusts. But there is more than one way to make extra money from land holdings.

Late last year, lawmakers tucked a rule into a tax-extenders bill that essentially eliminates the tax advantages of REIT spinoffs for the parent company.

The maneuvers had become popular with activist investors, who favored separating…

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My No. 1 Tip for Today’s Market: Hold Cash

Whenever I hear definitive pronouncements in investing — guaranteed returns, forecasters who are 100% accurate or hedging strategies that promise to be market neutral — I immediately shut them off. Still, Im comfortable definitively recommending what I see as the single best investment right now: Cash.

Without a doubt, having cash in todays market is going to give you an incredible edge. After all, the global environment is a near-perfect recipe for volatility — which in my view is merely a function of uncertainty.

We have uncertainty about oil prices, uncertainty about terrorism, uncertainty about China and other emerging markets and the uncertainty about what central banks will do. Oh yeah — theres also uncertainty about who the next president will be in the worlds largest economy.

Volatility might be nonexistent if any of the above were occurring in isolation. But when multiple risk elements come together, they create a sort of negative-feedback loop, with each added piece of uncertaintyexacerbating the others.

So, uncertainty creates volatility — but volatility creates opportunity. In 2008, volatility created an opportunity to own Starbucks (SBUX) for under $9 a share instead of the roughly $58 that the stock trades for today. Or you could have bought Amazon (AMZN) for under $50 rather than todays roughly $592, or Wells Fargo (WFC) for $9 instead of about $48 a share.

However, you couldnt have seized on any of those opportunities in 2008 without cash. Theres an old saying on Wall Street that money is made when an asset is bought, not sold — and the person with cash is truly king in times like these.

Buyers who provides liquidity in an illiquid environment will make a killing if they possess a fundamental understanding of business and markets.That was true in 2008 — and it wont be any different this time around.

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Cramer on Apple’s massive cash hoard: Expect this

Jim Cramer finally saw the market separate itself from the crazy connection to oil, and individual companies once again started to matter on Tuesday.

The one thing we really wanted to hear, though, is actual quality earnings from big international companies that arent turnaround plays, just plain-old great companies with good management. And suddenly we got them, the Mad Money host said.

The two big surprises for Cramer were when 3M and Johnson amp; Johnson reported. The last quarter brought out the sellers in both stocks, but Cramer was impressed with how much better these two companies are doing than what he thought.

Given how beat down both stocks were going into the quarter, it didnt surprise him when the stocks roared higher.

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Cash Is King as Europe Adapts to Negative Interest Rates: Chart

Europe’s ATMs worked overtime in 2015. A record 1.08 trillion euros ($1.17 trillion) of banknotes were in circulation, almost double the value 10 years ago, according to data compiled by the European Central Bank. That’s a counterargument to some bankers who say that electronic forms of cash will replace paper money sooner rather than later.

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Police: Man pressured female drivers into giving him cash after staged car crashes

(KUTV) A Salt Lake man is facing more than 20 charges associated with insurance fraud and reckless endangerment after a state investigation revealed he supposedly staged car crashed to collect cash payments from victims and insurance companies.

Navid Monjazeb was booked into the Salt Lake County Jail Wednesday, accused of staging at least 23 car crashes since from 2010-2015.

This came to us from insurance companies that noticed a pattern of similar accidents where the same vehicles were used with the same damage, Utah Insurance Fraud Division director Armand Glick said.

Glicks agency began their investigation five months ago and say they found dozens of possible victims.

This is a huge impact on victims, they were found at fault in these accidents. In many cases, if they had liability only, they were stuck paying for their own damages, out of their own pocket, Glick said.

Investigators say Monjazeb would intentionally drive in other cars blind spots and anticipate them changing lanes to bait them into crashes.

Police say they may just be scratching the surface with possible victims because Mojazeb aggressively tried to solicit cash settlements from victims.

Much of the evidence the investigators have come from pictures that victims took of the crashes.

Officials say documenting a crash scene is the best way to avoid falling victim to a scam like this.

Take a picture of the accident scene, take pictures with your cell phone of your vehicle, of the other persons vehicle. In this case, the pictures that were taken on scene differ from the ones that were taken by the time his vehicle was presented to insurance appraiser, Glick said.

Follow Jeremy Harris on Twitter @jeremykharris for breaking news, updates and more.

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Deutsche Bank: Cash will be Eliminated in 10 Years

John Cryan, CEO of Deutsche Bank AG, a German global banking and financial services company, predicted that cash will not exist in the next ten years. Digital currencies and electronic cash systems will inevitably replace physical forms of wealth, such as cash, in the near future.

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Invest in These ETFs to Capitalize on Cash Strength

With the broader market going off the deep end and the Samp;P 500 plunging to 2014 levels last week, the hunt for value is widespread right now.

Market watchers and participants are trying out different valuation indicators and running screeners to land up on trustworthy stocks. Many are also taking the ETF route to minimize stock-specific risks. After all, playing down risks is probably the sole motto of investors right now, in whatever way possible.

Usually most investors focus on fundamental indicators such as the price-to-earnings ratio (P/E), price-to-book (P/B) and the PEG ratio to select companies with strong fundamentals. But they often ignore cash flow measures. As we know that cash cushion is always needed in a rough market, one can easily take a look at the indicators related to cash flows to measure the performance of a company.

While this tool can be greatly exercised in case of stocks, investors can apply this for the basket approach too. This can be done by investing in ETFs rich with companies having low price-to-cash flow (P/CF) ratios.

Below we highlight a few ETFs with such cash characteristics so that investors can find some safe shelters in this turbulent market.

iShares US Financial Services ETF (IYG)

The financial sector is presently in a good shape thanks to loan growth amid low interest rates, stepped-up investment banking activities to reflect the increased corporate actions and cost containment. Plus, if the Fed enacts further rate hikes this year, the sector would get some of the much-needed additional support and shore up its net interest margin too.

Apart from these positives, IYG boasts a few banking stalwarts like Citigroup Inc. (C – Analyst Report), Bank of America Corporations (BAC) and Goldman (GS – Analyst Report). Each of these banks boasts price-to-cash flow of under one. As a result, the fund can be considered as a safe destination in this down time. However, this Zacks Rank #3 (Hold) ETF lost about 1% in the in the last five trading sessions (as of January 22, 2016) (read: Should You Buy Financial ETFs Following Decent Earnings?).

US Global Jets ETF (JETS)

The airline industry is a huge beneficiary of cheap oil. Fuel accounts for a large portion of airlines operating expenses and thus a drastic decline in fuel prices is a blessing for this airline ETF. Otherwise, development in the airline industry is rampant these days. Busy traffic on improving travel and business demand, restructuring indicatives and limited capacity growth are some of the important tailwinds (read: 16 ETFs You Cant Go Wrong With in 2016).

The first and fourth holdings of the fund, American Airlines Group Inc. (AAL – Analyst Report) and United Continental Holdings Inc. (UAL), form about one-fourth of the basket and also carry low P/CF ratios of 2.77 and 3 times, respectively. The fund was up 4.3% in the last five trading sessions (as of January 22, 2016).

iShares PHLX Semiconductor ETF (SOXX)

Since the second half of 2015 marked the rebound of tech stocks, semiconductors also hold promise. The semiconductor market will be propelled by smartphones and automotive in the coming days. Moreover, some analysts believe that the PC market is set for a rebound.

Semiconductor companies like Qualcomm (QCOM – Analyst Report), NVIDIA (NVDA – Analyst Report) and Applied Materials (AMAT) have considerable exposure in SOXX. These stocks also have P/CF ratios in the range 3minus;4 times. SOXX has a Zacks ETF Rank #1 (Strong Buy) and added 2.9% in the last five trading sessions (read: Time for Semiconductor ETFs?).

TrimTabs International Free-Cash-Flow ETF (FCFI)

While this fund does not directly deal with stocks with low P/CF ratios, it has an indirect approach to the same objective.

The fund looks to track 163 international companies with the highest free cash flow yields in 10 international markets, namely Canada, Germany, United Kingdom, Hong Kong, Japan, France, Switzerland, Netherlands, South Korea, and Australia.

Launched in June, 2015, the fund has amassed about $12.7 million so far. ADECCO SA, RELX NV and ABB LTD are the top three companies of the basket. The 30-day SEC yield of the fund (as of December 31, 2015) is 2.13% annually. However, the fund gained 2.1% in the last five trading days (as of January 22, 2016).

Cambria Shareholder Yield ETF (SYLD)

With an asset base of $138.1 million, the fund is based on the research that free cash flow is a key predictor of a companys strength. This product invests in companies that show strong characteristics in returning free cash flow to their shareholders by way of cash dividends, share repurchases, or by reducing their leverage. The fund advanced about 1% in the last five trading sessions (as of January 22, 2016).

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