633. Is trading stocks easier than trading commodities?
One reason why you may have gotten this advice is that stocks have an expected real return over time, while commodities do not. Therefore, when gambling on individual stocks, odds are in your favor that they will ultimately go up over time. You may do better or worse than the market as a whole, but they will likely go up as the whole market, on average, rises over time. Commodities, on the other hand, have no expected real return. It is more zero-sum. In fact, after costs, a real loss should be expected on average, making gambling in here more risky.

634. Why do gas stations charge different amounts in the same local area?
Some of this is demand management.  The local BJ's wholesale club sells gas $0.10-0.15/gallon less than the prevailing rate. Typically there are lines of 3-5 cars waiting for a pump during busy periods. People are price-conscious when buying gas, which draws crowds and the retailer actually wants a line -- the whole point of the gas station is to draw traffic to the warehouse club. Other gas stations have the opposite problem -- big crowds lead to fewer people buying food and drinks in the convenience store, which is where the business actually makes its money. They want a steady stream of people. In my area, there is a gas station that is on a busy intersection right off the highway ramp going to the airport. Their problem is that people returning rental cars used to swarm the gas station and cause traffic tie-ups on the road -- a problem averted by marking up the gas $0.30.

635. How do I deal with a mistaken attempt to collect a debt from me that is owed by someone else?
It may be a scam. But it also may be a company trying to find a person with the same or similar name. They may have followed a trail to her old address, and still not have the correct person. They bought number of old debts at a large discount, and are trying to track down any money they can find. It is best to ignore it, especially if they know it isn't their debt. If they start providing more proof then get interested. If they keep contacting them tell them there is no business relationship and they should stop.

636. What one bit of financial advice do you wish you could've given yourself five years ago?
I wish I would have known macro-economics taught by the Austrian School types at The Mises Institute.  Their teachings would have compelled me to do the following:

637. If accepting more than $10K in cash for a used boat, should I worry about counterfeiting?
I'd be a bit concerned about someone who wanted to transact that large of a transaction in cash.  Also consider what you are going to do with the funds, if you deposit it, you will need to tell the bank where it comes from. Why does the bank want to know, because most legal businesses don't transact business with large sums of currency.. What does that tell you about the likelihood the person you are about to do business with is a criminal or involved in criminal affairs?  The lower bill of sale price might be more than just to dodge taxes, it could be part of money laundering..  If they can turn right around and 'sell' the boat for $10K, or trade it in on a bigger boat for the same amount, and have a bill than says $4K, then they have just come up with a legal explanation for how they made 6 grand.  and you could potentially be considered an accomplice if someone is checking up on their finances. Really, is it worth the risk.

638. Where should I invest my savings?
Basically the first thing you should do before you invest your money is to learn about investing and learn about what you want to invest in. Another thing to think about is that usually low risk can also mean low returns. As you are quite young and have some savings put aside you should generally aim for higher risk higher return investments and then when you start to reach retirement age aim for less risky lower return investments. In saying that, just because an investment is considered high risk does not mean you have to be exposed to the full risk of that investment. You do this by managing your risk to an acceptable level which will allow you to sleep at night. To do this you need to learn about what you are investing in. As an example about managing your risk in an investment, say you want to invest $50,000 in shares. If you put the full $50,000 into one share and that share price drops dramatically you will lose a large portion of your money straight away. If instead you spent a maximum of $10,000 on 5 different shares, even if one of them falls dramatically, you still have another 4 which may be doing a lot better thus minimising your losses. To take it one step further you might say if anyone of the shares you bought falls by 20% then you will sell those shares and limit your losses to $2000 per share. If the worst case scenario occurred and all 5 of your shares fell during a stock market crash you would limit your total losses to $10,000 instead of $50,000. Most successful investors put just as much if not more emphasis on managing the risk on their investments and limiting their losses as they do in selecting the investments. As I am not in the US, I cannot really comment whether it is the right time to buy property over there, especially as the market conditions would be different in different states and in different areas of each state. However, a good indication of when to buy properties is when prices have dropped and are starting to stabilise. As you are renting at the moment one option you might want to look at is buying a place to live in so you don't need to rent any more. You can compare your current rent payment with the mortgage payment if you were to buy a house to live in. If your mortgage payments are lower than your rent payments then this could be a good option. But whatever you do make sure you learn about it first. Make sure you spend the time looking at for sale properties for a few months in the area you want to buy before you do buy. This will give you an indication of how much properties in that area are really worth and if prices are stable, still falling or starting to go up. Good luck, and remember, research, research and more research. Even if you are to take someone elses advice and recommendations, you should learn enough yourself to be able to tell if their advice and recommendations make sense and are right for your current situation.

639. Is my mortgage more likely to be sold if I pre-pay principal?
There are two ways that mortgages are sold: The loan is collateralized and sold to investors. This allows the bank to free up money for more loans. Of course sometime the loan may be treated like in the game of hot potato nobody want s to be holding a shaky loan when it goes into default. The second way that a loan is sold is through the servicing of the loan. This is the company or bank that collects your monthly payments, and handles the disbursement of escrow funds. Some banks lenders never sell servicing, others never do the servicing themselves. Once the servicing is sold the first time there is no telling how many times it will be sold.  The servicing of the loan is separate from the collateralization of the loan. When you applied for the loan you should have been given a Servicing Disclosure Statement Servicing Disclosure Statement. RESPA requires the lender or mortgage   broker to tell you in writing, when you apply for a loan or within the   next three business days, whether it expects that someone else will be   servicing your loan (collecting your payments). The language is set by the US government: [We may assign, sell, or transfer the servicing of your loan while the   loan is outstanding.] [or] [We do not service mortgage loans of the   type for which you applied. We intend to assign, sell, or transfer the   servicing of your mortgage loan before the first payment is due.] [or]   [The loan for which you have applied will be serviced at this   financial institution and we do not intend to sell, transfer, or   assign the servicing of the loan.] [INSTRUCTIONS TO PREPARER: Insert   the date and select the appropriate language under "Servicing Transfer   Information." The model format may be annotated with further   information that clarifies or enhances the model language.]

640. Purchasing options between the bid and ask prices, or even at the bid price or below?
This sometimes happens to me. It depends on how liquid the option is. Normally what I see happening is that the order book mutates itself around my order. I interpret this to mean that the order book is primarily market makers. They see a retail investor (me) come in and, since they don't have any interest in this illiquid option, they back off. Some other retail investor (or whatever) steps in with a market order, and we get matched up. I get a fill because I become the market maker for a brief while. On highly liquid options, buy limits at the bid tend to get swallowed because the market makers are working the spread. With very small orders (a contract or two) on very liquid options, I've had luck getting quick fills in the middle of the spread, which I attribute to MM's rebalancing their holdings on the cheap, although sometimes I like to think there's some other anal-retentive like me out there that hates to see such a lopsided book. :) I haven't noticed any particular tendency for this to happen more with puts or calls, or with buy vs sell transactions. For a while I had a suspicion that this was happening with strikes where IV didn't match IV of other strikes, but I never cared enough to chase it down as it was a minor part of my overall P/L.

641. How to evaluate stocks? e.g. Whether some stock is cheap or expensive?
If you are looking for numerical metrics I think the following are popular: Price/Earnings (P/E) - You mentioned this very popular one in your question.  There are different P/E ratios - forward (essentially an estimate of future earnings by management), trailing, etc..  I think of the P/E as a quick way to grade a company's income statement (i.e: How much does the stock cost verusus the amount of earnings being generated on a per share basis?). Some caution must be taken when looking at the P/E ratio.  Earnings can be "massaged" by the company.  Revenue can be moved between quarters, assets can be depreciated at different rates, residual value of assets can be adjusted, etc..  Knowing this, the P/E ratio alone doesn't help me determine whether or not a stock is cheap. In general, I think an affordable stock is one whose P/E is under 15. Price/Book - I look at the Price/Book as a quick way to grade a company's balance sheet.  The book value of a company is the amount of cash that would be left if everything the company owned was sold and all debts paid (i.e. the company's net worth).  The cash is then divided amoung the outstanding shares and the Price/Book can be computed.  If a company had a price/book under 1.0 then theoretically you could purchase the stock, the company could be liquidated, and you would end up with more money then what you paid for the stock. This ratio attempts to answer: "How much does the stock cost based on the net worth of the company?" Again, this ratio can be "massaged" by the company.  Asset values have to be estimated based on current market values (think about trying to determine how much a company's building is worth) unless, of course, mark-to-market is suspended.  This involves some estimating.  Again, I don't use this value alone in determing whether or not a stock is cheap. I consider a price/book value under 10 a good number.   Cash - I look at growth in the cash balance of a company as a way to grade a company's cash flow statement.  Is the cash account growing or not? As they say, "Cash is King".  This is one measurement that can not be "massaged" which is why I like it.  The P/E and Price/Book can be "tuned" but in the end the company cannot hide a shrinking cash balance. Return Ratios - Return on Equity is a measure of the amount of earnings being generated for a given amount of equity (ROE = earnings/(assets - liabilities)).  This attempts to measure how effective the company is at generating earnings with a given amount of equity.  There is also Return on Assets which measures earnings returns based on the company's assets. I tend to think an ROE over 15% is a good number. These measurements rely on a company accurately reporting its financial condition.  Remember, in the US companies are allowed to falsify accounting reports if approved by the government so be careful.  There are others who simply don't follow the rules and report whatever numbers they like without penalty. There are many others.  These are just a few of the more popular ones.  There are many other considerations to take into account as other posters have pointed out.

642. Why does the share price tend to fall if a company's profits decrease, yet remain positive?
Let's use an example: You buy 10 machines for 100k, and those machines produce products sold for a total of 10k/year in profit (ignoring labor/electricity/sales costs etc). If the typical investor requires a rate of return of 10% on this business, your company would be worth 100k.  In investing terms, you would have a PE ratio of 10.  The immediately-required return will be lower if substantially greater returns are expected in the future (expected growth), and the immediately required return will be higher if your business is expected to shrink. If at the end of the year you take your 10k and purchase another machine, your valuation will rise to 110k, because you can now produce 11k in earnings per year.  If your business has issued 10,000 shares, your share price will rise from $10 to $11.  Note that you did not just put cash in the bank, and that you now have a higher share price. At the end of year 2, with 11 machines, lets imagine that customer demand has fallen and you are forced to cut prices.  You somehow produce only 10k in profit, instead of the anticipated 11k.  Investors believe this 10k in annual profit will continue into the forseable future.  The investor who requires 10% return would then only value your company at 100k, and your share price would fall back from $11 to $10.  If your earnings had fallen even further to 9k, they might value you at 90k (9k/0.1=$90k).  You still have the same machines, but the market has changed in a way that make those machines less valuable. If you've gone from earning 10k in year one with 10 machines to 9k in year two with 11 machines, an investor might assume you'll make even less in year three, potentially only 8k, so the value of your company might even fall to 80k or lower.  Once it is assumed that your earnings will continue to shrink, an investor might value your business based on a higher required rate of return (e.g. maybe 20% instead of 10%), which would cause your share price to fall even further.

643. Value of credit score if you never plan to borrow again?
There's many concrete answers, but there's something circular about your question. The only thing I can think of is that phone service providers ask for credit report when you want to start a new account but I am sure that could be worked around if you just put down a cash deposit in some cases. So now the situation is flipped - you are relying on your phone company's credit!  Who is to say they don't just walk away from their end of the deal now that you have paid in full?   The amount of credit in this situation is conserved. You just have to eat the risk and rely on their credit, because you have no credit. It doesn't matter how much money you have - $10 or $10000 can be extorted out of you equally well if you must always pay for future goods up front. You also can't use that money month-by-month now, even in low-risk investments. Although, they will do exactly that and keep the interest. And I challenge your assumption that you will never default. You are not a seraphic being. You live on planet earth. Ever had to pay $125,000 for a chemo treatment because you got a rare form of cancer? Well, you won't be able to default on your phone plan and pay for your drug (or food, if you bankrupt yourself on the drug) because your money is already gone. I know you asked a simpler question but I can't write a good answer without pointing out that "no default" is a bad model, it's like doing math without a zero element. By the way, this is realistic. It applies to renting in, say, New York City. It's better to be a tenant with credit who can withhold rent in issue of neglected maintenance or gross unfair treatment, than a tenant who has already paid full rent and has left the landlord with little market incentive to do their part.

644. how do I calculate rate of return on call options that are spread
Outside of software that can calculate the returns:  You could calculate your possible returns on that leap spread as you ordinarily would, then place the return results of that and the return results for the covered call position side by side for any given price level of the stock you calculate, and net them out. (Netting out the dollar amounts, not percentage returns.)  Not a great answer, but there ya go. Software like OptionVue is expensive

645. Net money invested in Stock indexes ended up in red
Not sure where you got the 296 crores figure. The data on the sheet shows activity by category of investors. In the end NET of all BUY and SELL across all categories will always be Zero. It has no bearing on whether the stock market goes up or goes down. If you compare only activity by certain category, say FII then there could be more SELL compared to BUY or vice-versa.

646. Should I buy a home or rent in my situation?
MY recommendation is simple.  RENT The fact that you have to ask the question is a clear sign that you have no business buying a home. That's not to say that it's a bad question to ask though. Far more important then rather it's finically wise for you to buy a home, is the more important question of "are you emotionally ready for the responsibility and permanence" of a home.  At best, you are tying your self to the same number of rooms, same location, and same set of circumstances for the next 5-7 years. In that time it will be very unlikely that you will be able to sell the house for a profit, get your minor equity back, or even get a second loan for any reason.  You mentioned getting married soon, that means the possibility of more children, divorce, and who knows what else.  You are in an emotionally and financially turblunt time in your life. Now is not the right time to buy anything large. Instead rent, and focus on improving your credit rating. In 5 years time you will have a much better credit rating, get much better rates and fees, and have a much better handle on where you want to be with your home/family situation.  Buying a house is not something you do on a weekend. For most people it's the culmination of years of work, searching, researching, and preparation.  Often times people that buy before they are ready, will end up in foreclosure, and generally have a crappy next 15 years, as they try to work themselves out of the issue.

647. Why might a robo-advisor service like Betterment be preferable to just buying a single well-performing index fund like SPY?
The reason diversification in general is a benefit is easily seen in your first graph.  While the purple line (Betterment 100% Stock) is always below the blue line (S&P), and the blue line is the superior return over the entire period, it's a bit different if you retired in 2009, isn't it?  In that case the orange line is superior: because its risk is much lower, so it didn't drop much during the major crash.  Lowering risk (and lowering return) is a benefit the closer you get to retirement as you won't see as big a cumulative return from the large percentage, but you could see a big temporary drop, and need your income to be relatively stable (if you're living off it or soon going to).   Now, you can certainly invest on your own in a diverse way, and if you're reasonably smart about it and have enough funds to avoid any fees, you can almost certainly do better than a managed solution - even a relatively lightly managed solution like Betterment.  They take .15% off the top, so if you just did exactly the same as them, you would end up .15% (per year) better off. However, not everyone is reasonably smart, and not everyone has much in the way of funds. Betterment's target audience are people who aren't terribly smart about investing and/or have very small amounts of funds to invest.  Plenty of people aren't able to work out how to do diversification on their own; while they probably mostly aren't asking questions on this site, they're a large percentage of the population.  It's also work to diversify your portfolio: you have to make minor changes every year at a minimum to ensure you have a nicely balanced portfolio.  This is why target retirement date portfolios are very popular; a bit higher cost (similar to Betterment, roughly) but no work required to diversify correctly and maintain that diversification.

648. Does high frequency trading provide economic value?
This is a very important question and you will find arguments from both sides, in part because it is still understudied. Ben Golub, Economics Ph.D., from Stanford answers "Is high-frequency trading good for the economy?" on Quoram quite well.  This is an important but understudied question. There are few   published academic studies on it, though several groups are working on   the subject. You may be interested in the following papers: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1569067 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1361184 These document some of the phenomena that arise in high frequency   trading, from a theoretical and an empirical perspective. However, a   full equilibrium analysis of the unique features of high frequency   trading is still missing, and until it is done, all our answers will   be kind of  tentative. Nevertheless, there are some obvious things one can say. Currently,   high frequency traders are competing to locate physically closer and   closer to exchanges, because milliseconds matter. Thus, large amounts   of money are being spent to beat other market makers by tiny fractions   of a second. Once many firms make these investments, the market looks   like it did before in terms of competition and prices, but is a tiny   bit faster. This investment is unlikely to be socially efficient: that   is, the users of  the market don't actually benefit from the fact that   their trades are executed half a millisecond faster -- certainly not   enough to cover all the investment that went into making that happen. Some people who study the issue believe that high frequency trading   (HFT) actually exacerbates market volatility; some plots to this   effect are found in the second paper linked above. There is certainly   no widely accepted theory that says faster trading technology   necessarily increases efficiency, and it is easy to think of   algorithms that can make money (at least in the short run) but hurt   most other investors, as well as the informational value of the   market. One caution is that some of the complaining about HFT comes from those   who lose when HFT gets better -- old-style market makers. They   certainly have an incentive to make HFT out to be very bad. So some   complaints about the predatory nature of HFT should be taken with a   grain of salt. There is no strong economic consensus about the value   of this activity. For what it's worth, my personal impression is that   this is more bad than good. I'll post an update here as more   definitive research comes out. You can also find a debate on High-frequency trading from the Economist which gives both sides of the argument. In conclusion: Regardless of how you feel about HFT it seems like it's here to stay and won't be leaving in the foreseeable future. So the debate will rage on... Additional resource you may finding interesting: Europe Begins Push To Ban HFT High Frequency Trading Discussion On CNBC Should High Frequency Trading (HFT) be banned ?

649. Interest payments for leveraged positions
I think to some extent you may be confusing the terms margin and leverage. From Investopedia Two concepts that are important to traders are margin and leverage. Margin is a loan extended by your broker that allows you to leverage the funds and securities in your account to enter larger trades. In order to use margin, you must open and be approved for a margin account. The loan is collateralized by the securities and cash in your margin account. The borrowed money doesn't come free, however; it has to be paid back with interest. If you are a day trader or scalper this may not be a concern; but if you are a swing trader, you can expect to pay between 5 and 10% interest on the borrowed money, or margin. Going hand-in-hand with margin is leverage; you use margin to create leverage. Leverage is the increased buying power that is available to margin account holders.  Essentially, leverage allows you to pay less than full price for a trade, giving you the ability to enter larger positions than would be possible with your account funds alone. Leverage is expressed as a ratio. A 2:1 leverage, for example, means that you would be able to hold a position that is twice the value of your trading account. If you had $25,000 in your trading account with 2:1 leverage, you would be able to purchase $50,000 worth of stock. Margin refers to essentially buying with borrowed money.  This must be paid back, with interest.  You also may have a "margin call" forcing you to liquidate assets if you go beyond your margin limits. Leverage can be achieved in a number of ways when investing, one of which is investing with a margin account.
