What Legal Requirements Exist When Selling a Structured Settlement?

Structured settlements are designed to help offset the financial cost of injuries you may have sustained through an accident, as well as in other situations. The settlement amount is held for you, and you receive monthly payments from it for a specified amount of time. However, while all of that money is technically yours, there are some legal requirements that have to be satisfied if you decide selling your structured settlement is in your best interest. You’re not free to do with it as you wish. Here’s what you should know.

Disclosure

When you decide to sell your structured settlement to a buyer, the law requires that buyer to provide you with “full disclosure” regarding the particulars of the sale. The buyer should clearly explain all the financial terms of the sale so that you understand them. This is vital for making a wise decision regarding your financial future.

Cool Down

You might think that once you sign the documents authorizing the sale of your structured settlement, things would progress quickly. That’s not necessarily the case. The law requires a cool down period during which you have the opportunity to reassess your situation and change your mind. If you change your mind during this period, you can cancel the sale with no financial obligations to the buyer. This is important protection, and is designed to ensure that you’re actually making the best decision for your needs, rather than a hurried one. 

Legal Advice

State law requires the buyer to advise you that you should seek out professional legal advice about selling your structured settlement. While it’s not mandatory to get legal advice in all states, it is highly recommended, as it can help you make a better decision regarding your financial future. An experienced lawyer can point out things that you might not notice with the deal, ensuring that you’re well-armed if you decide to pursue the sale with this particular buyer.

The Legal Process

In addition to the legal requirements above, you will have to go back to court. The sale of your structured settlement must be approved by a judge. There are several factors that will weigh on the judge’s decision, including the reason you want the money, your current financial situation, and whether the judge thinks that the sale is truly in your best interest or not. The sale cannot move forward until the judge issues a court order approving it. After that point, you’ll be able to receive the lump sum payment for your structured settlement.

A considerable amount of stress and hassle in the requirements above can be eliminated by working with a structured settlement company. These firms offer more than just a helping hand. They provide you with the means to get your sale in front of many different qualified buyers and then accept bids on the sale, ensuring that you’re able to get top dollar for your structured settlement. It’s simpler and easier, and those are definitely things that benefit you.

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What is Market Efficiency Theory?

The concept of market efficiency was proposed by Eugene Fama in 1965, when his article “Random Walks in Stock Prices” was published in Financial Analyst Journal.

Market efficiency means that the price which investor is paying for financial asset (stock, bond, other security) fully reflects fair or true information about the intrinsic value of this specific asset or fairly describes the value of the company – the issuer of this security. The key term in the concept of the market efficiency is the information available for investors trading in the market. It is stated that the market price of stock reflects:

 1. All known information, including:

Ø   Past information, e.g., last year’s or last quarter’s, month’s earnings;

Ø   Current information as well as events, that have been announced but are still forthcoming, e.g. shareholders’ meeting.

 2. Information that can reasonably be inferred, for example, if many investors believe that ECB will increase interest rate in the nearest future or the government deficit increases, prices will reflect this belief before the actual event occurs.

Capital market is efficient, if the prices of securities which are traded in the market, react to the changes of situation immediately, fully and credibly reflect all the important information about the security’s future income and risk related with generating this income.

What is the important information for the investor? From economic point of view the important information is defined as such information which has direct influence to the investor’s decisions seeking for his defined financial goals. Example, the essential events in the joint stock company, published in the newspaper, etc.

Market efficiency requires that the adjustment to new information occurs very quickly as the information becomes known. Obvious, that Internet has made the markets more efficient in the sense of how widely and quickly information is disseminated.

There are 3 forms of market efficiency under efficient market hypothesis:

• Weak form of efficiency;

• Semi- strong form of efficiency;

• Strong form of the efficiency. 

Under the weak form of efficiency stock prices are assumed to reflect any information that may be contained in the past history of the stock prices. So, if the market is characterized by weak form of efficiency, no one investor or any group of investors should be able to earn over the defined period of time abnormal rates of return by using information about historical prices available for them and by using technical analysis. Prices will respond to news, but if this news is random then price changes will also be random.

Under the semi-strong form of efficiency all publicly available information is presumed to be reflected in stocks’ prices. This information includes information in the stock price series as well as information in the firm’s financial reports, the reports of competing firms, announced information relating to the state of the economy and any other publicly available information, relevant to the valuation of the firm. Note that the market with a semi strong form of efficiency encompasses the weak form of the hypothesis because the historical market data are part of the larger set of all publicly available information. If the market is characterized by semi-strong form of efficiency, no one investor or any group of investors should be able to earn over the defined period of time abnormal rates of return by using information about historical prices and publicly available fundamental information(such as financial statements) and fundamental analysis.

The strong form of efficiency which asserts that stock prices fully reflect all information, including private or inside information, as well as that which is publicly available. This form takes the notion of market efficiency to the ultimate extreme. Under this form of market efficiency securities’ prices quickly adjust to reflect both the inside and public information. If the market is characterized by strong form of efficiency, no one investor or any group of investors should be able to earn over the defined period of time abnormal rates of return by using all information available for them.

The validity of the market efficiency hypothesis whichever form is of great importance to the investors because it determines whether anyone can outperform the market, or whether the successful investing is all about luck. Efficient market hypothesis does not require to behave rationally, only that in response to information there will be a sufficiently large random reaction that an excess profit cannot be made. 

The concept of the market efficiency now is criticized by some market analysts and participants by stating that no one market can be fully efficient as some irrational behavior of investors in the market occurs which is more based on their emotions and other psychological factors than on the information available But, at the same time, it can be shown that the efficient market can exist, if in the real markets following events occur:

Ø   A large number of rational, profit maximizing investors exist who are actively and continuously analyzing valuing and trading securities;

Ø   Information is widely available to market participants at the same time and without or very small cost;

Ø   Information is generated in a random walk manner and can be treated as independent;

Ø   Investors react to the new information quickly and fully, though causing market prices to adjust accordingly.

By Kristina Levišauskait

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US Federal Reserve System

The Federal Reserve System is simply the central bank of the United States of America, which has the special purpose of administering and formulating monetary and credit policies respectively. However, this institution was established by the congress thus making it an independent body. This was because of various reasons among them, for instance in 1913,the general economy of US had grown successfully at home, as well as abroad. Because of this, it unconditionally required an effective, well-managed and flexible system of banking. In this manner, it led to an establishment of the Federal Reserve act of 1913, which conceptualize the institution as the central banking authority of United States of America.

Nevertheless, this institution is playing a vital role in the economy, and it performs a number of functions such as; it has the maiden mandate to control, and conduct the monetary policy of the country, it works all round the clock to ensure that the financial system of America is stable. Nonetheless, it plays the role of checks and balances in the overall financial system. This normally happens when the central bank regulates the lending of cash by other banks across the country. Additionally, Federal Reserve System literally supervises as well as regulates the banks and ensures the credit rights are well protected. Particularly, it regulates and determines the interest rates; as such, it makes sure that the citizens are not exploited, more so this happens because the banking industry is not a monopoly version of business.

Furthermore, the US Federal Reserve offers financial services to the general public, financial institutions such as the banks, micro finance institutions, foreign financial institutions, and lastly the US government enjoys financial services from the Federal Reserve. The government can borrow loans from the Federal Reserve whenever they have projects that require a lot of money. In addition, this institution has the mandate to issue federal bank notes; as such, it also supplies the American citizens with the paper money.

Nevertheless, the system has a special way to deal with the monetary policy as such, they have a certain committee, which seeks to reduce the deviations of inflation in the economy. Moreover, the reserve system plays a greater role in determining the employment levels in the country. In conclusion, it is important to acknowledge that the Federal Reserve is a vital entity in the US economy and needs a proper management in order to have an effective economy.

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Advice for Stock Market Trading

Advice or Tips for Trading Stocks in Stock Market-- If you are brand new to trading shares, you likely want to learn a bit about how it all works before you begin. The stock market can be somewhat confusing at times, but it is not that difficult to figure out once you learn the ropes. The following advice will help you get started on the right foot so that you can begin making those trades as soon as possible. 

Find a Broker that You Can Trust
The first step is to find a good broker that you know you can trust. You want to be confident that he will do everything in his power to help you succeed. This means being available any time that you need him, as long as the market is open. There is nothing worse than wanting to make a trade, not being able to get in touch with your broker, and watching your opportunity slip away. He or she needs to be very trustworthy and dependable. 

Limit Your Risks
Anyone with a time machine would love to go back and put all of their money into the stock of a company that has now exploded in popularity, but that is unrealistic. In the real world, traders make money by limiting their risks, not by taking a chance on a company and hoping to get rich. You need to diversify your stocks and work hard to always make sure that you are earning a little, rather than trying to earn it all at one time. 

Know Your Limits
When you see a stock price falling, you might be tempted to buy more of that stock, hoping it will go back up so that you can make even more. This is sort of like hedging your bets. The risk, though, is that you could be wrong. The more money you sink into a failing stock, the more you stand to lose. You need to know your limits so that you can know when to cut your losses and move on. 

Remember that Trading Takes Work
Some people think of the stock market as an easy way to get rich while not really doing anything at all, but this is far from true. It takes dedication and work to trade for a living. Always remember that you have to be willing to put in the work if you want to make this into your new career.

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The Housing Market Rebounds in Arizona

 Back in the dark and dismal days of the financial crisis, Arizona was one of the first and hardest-hit housing markets. House prices declined over 30% in one year, wiping billions of dollars off of the residential property market. There were massive layoffs in the construction industry, contributing to the further slowdown of the state economy and leading to a downward spiral.

However it appears that the doom and gloom may finally be over, providing significant new opportunities for investors – as well as those who are looking to move into a new family home. For instance, the price of housing in Phoenix has risen slightly over 30% since Q1 2012, far outstripping the national average rise of 11.3%. That sort of growth is worth a second look for anyone who is serious about increasing the returns on their investment portfolio.

Based on data fromMichael Orr, the director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business at Arizona State University, it appears that the fundamentals of the Arizona housing market are becoming strong, indicating that the recent dramatic rise in prices is not just a repeat of the previous bubble in 2007. For example, sales of single-family homes have been on the rise, and more of them are being purchased by homeowners rather than investors – which indicates that end-user demand is strong and prices are not being artificially inflated by speculation. Furthermore, while the housing inventory (the number of houses for sale) has been rising, it is still at historic lows, which supports continued price increases.

One of the barriers to further expansion of the housing supply in Arizona is a lack of skilled construction workers. Many of these workers retrained for other industries or moved out of state when the financial crisis struck, so that employment in the sector remains at levels not previously seen since the mid-1990s. While this does limit investment opportunities, it also means that supply is unlikely to outstrip demand in the short term – boding well for continued price growth. It also means that real-estate projects that already have new homes built, such as Eagles Nest Living near Scottsdale, are particularly interesting investments.

Another encouraging sign is that, despite the recent rises, property prices remain below the long-term trend. Looking over the 10 year period from 1989 to 1999, prior to the housing bubble, the annual growth rate was 3.1%. If you project that through to the current day, it suggests that the market is undervalued still by 15% to 20%. That is plenty of headroom for a canny investor, especially when you consider that financing remains extraordinarily cheap – vastly increasing the investment leverage.

There are a number of other factors that suggest the Arizona housing market is on its way to recovery. Foreclosures are down 60% in the last year, and bank sales of distressed properties are down by 53%. House purchases by rental firms are also low, indicating that the demand is real and not another bubble. All of this is encouraging for anyone who is considering investing in the Arizona real estate market.

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Why We Pay Taxes

Why Are Taxes Necessary?
Taxes steal a big chunk of our annual income, but there’s a good reason why we need to pay them.

The only sure thing in life is death and taxes – at least that’s what they say. And that age old maxim wouldn’t be too off the mark if taxpayers have anything to say about it.  

In fact, most people feel like dying come tax season, so it wouldn’t be surprising if you (like billions of citizens around the world) feel like the two were interchangeable.

It’s hard to imagine what isn’t taxed these days. From income to land, to even your miraculous lottery winnings; each possible source of revenue gets a cut that goes to the government.
But as surprising as it may sound, there’s actually a good reason why we need to pay taxes. And while it may sound like a great benefit for the government, it’s actually designed to be a benefit for taxpayers as well.
Here are just a handful of reasons why taxes are necessary:

• Paying your taxes means more improvements to the country or your city – Taxes are categorized in different ways depending on the kind of tax and the country you’re from. But all in all, taxes are designed to be able to fund the different improvements in either your country or your city. These improvements can come in the form of roads, public parks, national infrastructure, garbage disposal, public transit and even low cost housing.
• Your taxes come back to you eventually. – Taxes can be viewed somewhat like an insurance policy. You pay your government taxes to fund different services afforded by the government. Some of these services can cover everything from health care to financial or food aid. And while these may not be relevant to you right now, as a taxpayer you can benefit from them in the future should anything happen to you.
• Taxes prove you are citizen worthy of certain benefits. – While all citizens are created equal, some citizens are granted a bit more leverage just by being taxpayers. Income tax returns are used to prove that you’re a citizen that not only pays taxes but also receives a certain monthly/quarterly/annual income. These documents are important when applying for a loan, or when paying for a something sizable on installment.
• You work and earn a salary, and your government should too. – Practically speaking, taxes are a way of paying the government for doing its job. But unlike a real salary, the government tells its citizens what it should earn. If you think this is simply incentive to tax its citizens to high heaven, you have to understand that different amounts of taxation have various effects on a country. Too high and your citizens won’t have any money left to spend. Too low and your government won’t have any money to spend. It’s the government’s job to find the right balance between the two.

In a way, taxation is like the price of citizenship. That hardly sounds like a compelling reason to cough up more cash to the government, but there’s a truth in that statement. As citizens, we should be able to enjoy the various benefits and services provided by our government, but these services can only be rendered if there are funds to render them with.

Author:
Casio Wiser manages a tax forum for the website Federal Tax

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